Age-based Investing

Quarter-million-dollar baby: Cost of raising kids

Kids cost HOW much?

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Let's face it: Kids don't come cheap. But ask any parent and they'll more than likely say their children were well worth the cost in not only time and treasure but blood, sweat and tears, as well. But have they—or you—actually thought about just how much, in dollars and cents, it actually costs to raise a kid to age 18? Well, the federal government has done the math for you. According to the U.S. Department of Agriculture, middle-income American parents can expect to spend a total of $245,340 to raise a child who was born in 2013 (the latest year for which figures are available).

Here, we break down this number into seven major expense categories—including food, clothing, child care and education (not including college), transportation, housing and health care—and then look at some of the expenses not included in this figure, such as regional and higher-education costs.

Source: U.S. Department of Agriculture

By CNBC's Kenneth Kiesnoski
Posted 14 July 2015

No. 7: Clothing (6%)

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Money doesn't grow on trees, and neither do all those skinny jeans and designer sneakers. Parents can expect to fork over an average of $14,720, or 6 percent of the total "child budget," to clothe their kid until he or she starts fending for themselves.

Source: U.S. Department of Agriculture

No. 6: Health care (8%)

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Given the endless brouhaha over Obamacare and rising health-care costs, you'd think medical expenses would account for more than 8 percent of your child-raising budget, as the USDA claims. That figure works out to about $19,627 in doctor visits, spoonfuls of medicine and other assorted health-care expenditures.

Source: U.S. Department of Agriculture

No. 5: Miscellaneous (e.g., toys) (8%)

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They'll more than likely end up abandoned in a forgotten corner of the attic or cellar quicker than it took to unwrap them on birthdays or holidays, but toys (and other miscellaneous expenses, such as entertainment) will cost parents just as much as health care—$19,627, or another 8 percent of a child-rearing budget—by the time children lose interest in plastic playthings.

Source: U.S. Department of Agriculture

No. 4: Transportation (14%)

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Shuffling your progeny between soccer matches and recitals, and flying them away for that annual family vacation, will account for 14 percent of your kid budget. That amounts to about $34,347 in childhood transportation costs.

Source: U.S. Department of Agriculture

No. 3: Food (16%)

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All those Big Macs, Wheaties and movie popcorns—not to mention the occasional home-cooked meal—will set parents back some $39,254 at supermarkets, restaurants and farm stands over the childhood years of their kids. That accounts for 16 percent of overall expenses, making food the third-costliest expense category, according to the USDA.

Source: U.S. Department of Agriculture

No. 2: Education/child care (18%)

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We're not talking college tuition here—just primary and secondary education costs, plus any child-care expenses. This expense category will take the second-biggest bite out of your kid-raising budget, adding up to $44,161, or 18 percent, of the total. (We're not sure if apples for teachers fall under this category or "food.") More on college costs in a bit. ...

Source: U.S. Department of Agriculture

No. 1: Housing (30%)

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Drumroll, please. Yes, it's home, sweet home that eats up most of your parenting budget. But let's face it: You'd be paying for a living space—albeit perhaps a smaller one—even if you didn't have children. Your kid's share of your housing costs will add up to some $73,602 over the course of their childhood, or nearly a third (30 percent) of the total budget.

Source: U.S. Department of Agriculture

Annual cost of college | Digital Vision | Getty Images

Now, about those higher-education costs: The USDA estimates that just over a decade and a half from now, annual college tuition will run you $18,390 at a public institution and $40,920 at a private one. That means that if your kid goes the Ivy League route, expect to add at least another $163,680 or so to that original $245,340 budget, for a total of $409,020.

Source: U.S. Department of Agriculture

Housing costs: Rural vs. overall

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Are you a city mouse or a country mouse? If you're raising your kids down on the farm, you're saving a lot on housing them. Americans living in rural areas will spend just $45,180 in total on keeping a roof over their kid's head versus the $73,000-plus everyone else will have to shell out.

Source: U.S. Department of Agriculture

Final tally: Region by region

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That $245,340 in total child-rearing costs is just a national average. Depending on where you live, you'll spend more or less. The highest prices are paid in the Northeast and West. Urban parents in those regions have to pony up $282,480 and $261,330, respectively, to raise kids. City dwellers in the Midwest, however, shell out a less-than-average $240,570. Southerners pay the least, at $230,610, for urban residents.

The takeaway? When it come to raising kids for less, a farm in, say, Alabama is your best bet.

Source: U.S. Department of Agriculture