How Much Does Being a Parent Cost in 2021?

Parent and Daughter at Computer

If you're wondering how much does it cost to have a child? Here's your answer:

  • Lower-class income - up to $59,200
  • Middle-class income - above $59,200 and up to $107,400
  • Upper-class income - over $107,400

Okay, let's give a little more clarity to those numbers. They're based on incomes for married couples before tax and look at the overall costs of raising a child until they're 17. The increase of income correlates to an increase in the cost of having a child, as those earning more are able to spend more on education and non-essentials.

Annually, a middle-income can expect to pay around $12,980 per child up to the age of 17. But, these figures are from 2015, so with inflation and increased costs of living, you can expect all of these figures to have jumped up by now!

You might be thinking that an average of over $12,000 a year in parental costs sounds like a lot, and you'd be right. So, let's take a look at a breakdown of costs to see where you're spending your money. 

Housing Expenses

When raising a child, your housing expenses are likely to be the biggest cost you incur. If you're not moving into a new house when you have your child, you can cut this extra cost down by quite a lot. In fact, housing expenses represent 29% of costs for middle-income families (26% for high-income, 33% for low-income). 

The expenses included in the housing category are:

  • Mortgage or rent payment
  • Property tax
  • Utilities
  • Home repairs and refurbishments
  • Furnishings
  • Equipment (household appliances, like a fridge and a hoover)

So, even if you have a house already and don't need to buy something bigger, you will still see some extra expenses. You can expect your utilities to increase as your child grows, and you'll likely need new furniture with a new person in your home. It’s also not uncommon for home repairs to become more frequent with a little one running around!

Food Expenses

One of the major costs of being a parent that there's no escaping from is food. While this isn't going to be expensive in the first year of your child's life, it will increase as they grow. On average, food is the second biggest expense for low and middle-income families. Expect food to account for 18% of your total costs. If you're on a budget, opt for cheaper but healthy foods, like oatmeal for breakfast instead of branded cereal, and less meat with your meals. Take a look at these top 5 food apps and blogs for more ways to make cooking on a budget easier.

Child Care and Education Expenses

We just mentioned that food isn't the second biggest expense for high-income families. Instead, if you have a high salary you can expect to put more on child care and education. This includes tuition fees, babysitting costs, books, supplies, and school trips.

The reason that this is such a big expense for higher-income families is because they can pay higher tuition fees. Meanwhile, only 26% of lower-income families even report childcare and education as an expense at all!

Transportation Expenses

Transportation costs are most prevalent when your little one grows into a teenager, so you won't have to worry about this one for some time. This is the time when teenagers get their driver’s license and a lot of parents will help them to buy a car, which is a big expense. Even if they don't get a car, there are still bus and taxi fares to think of, which add up over time.

You can expect transportation to make up 15% of the cost of having a child. 

Healthcare Expenses

Healthcare includes every expense that you pay for, so it doesn't include anything paid for by your employer. If you pay for insurance, this is going to add up over time (but it's essential, of course!) and your costs will vary depending on the health of your child. On average, healthcare will amount to 9% of your total expenses.

Financial Planning for Parents

The cost of raising a child is expensive, but it's well worth it. There are some ways you can help to financially plan and prepare for your little one's arrival, and the sooner you start, the better.

The first is to set up a separate savings account for your child. Add a small amount of money in here every month - or whenever you can - and watch it grow. When your child needs something you haven't planned for, this is the account you'll use. 

It's also good to start making monthly budgets. These will ensure you have enough to cover all of your costs and it'll help you to keep better watch over your savings. If there are areas where you've noticed you're spending a lot of unnecessary money, like on take-out food, you can cut back and put the money into that savings account.

Cover Your Partner and Child

Now we've explored how much it costs to be a parent, you can probably understand the importance of being financially stable when raising a child. This means being prepared for every situation, including tragic ones. Taking out a life insurance policy can help your partner and child live comfortably even if you're not around, giving you all peace of mind. 

Take a look at our policies to find out more and set your family up for life. 


Our content is created for educational purposes only. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Vantis Life encourages individuals to seek advice from their own investment or tax advisor or legal counsel.