We know the answer: Yes, it’s getting more expensive to raise your family. There are a few factors contributing to the cost increase. The most talked about is, of course, inflation. But inflation is just one part of the equation.
It’s impossible to quantify all the expenses that are driving increased costs. However, it’s important to note that basic needs have become increasingly expensive. And that is causing stress among families. When your physiological needs are difficult to meet, those needs become your sole focus. So in addition to struggling financially, you’re also struggling to enjoy life.
Physiological needs that are costing your family more
- Food – It’s become more expensive than ever to feed your family.
- Shelter – Rising home, mortgage rates, and rent prices are pinching budgets
- Clothing – Finding affordable basics has become nearly out of reach
And for families, there are requirements beyond basic needs
You can’t just feed, house and clothe your children. Those basics are important, yes, but they represent the absolute bare minimum for survival. If you want to participate in society and support your child(ren)’s interests, you’re going to need to spend more. This leads us to several other factors that contribute to the high cost of raising children in the US in 2023.
One of the biggest expenses for parents is the cost of childcare. In the US, the average cost of full-time childcare can range from $10,000 to $20,000 per year, depending on the location and quality of care. Living in the city or a major metro suburb? Expect that number to be higher. This can be a significant financial burden for families, particularly those with multiple children or those with low or moderate incomes. While some parents think opting out of the workforce to stay home instead of incurring these costs, that’s not always the best plan as leaving the workforce can have lifelong impacts to your earning power and retirement income.
Healthcare costs in the US are among the highest in the world, and families with children often face significant medical expenses. This can include the cost of routine check-ups, vaccinations, and other medical treatments, as well as unexpected expenses such as emergency room visits. Sure, having health insurance can help. But the premiums you’ll pay will but a significant dent in your take home pay—and that’s a cost you’ll incur before you even get any type of health care.
Education is another significant expense for families with children in the US. The cost of private school tuition or college education can be very high, and even public schools may require parents to pay for textbooks, supplies, and extracurricular activities. According to publicschoolreview.com, “Families will pay an average of $577 on supplies for elementary students this year, which marks a 5.3% increase over last year. Those with middle school students can plan on paying an average of $763 and high school students can expect to spend around $1,223 on supplies. Those figures mark 5.3% and 9.5% increases, respectively.”
In addition to these major expenses, there are many other costs associated with raising children in the US. These can include the cost of transportation and entertainment. Or, dare we mention youth sports? MassMutual shares that “the typical parent spends $693 per year, per child on youth sports, but those with children who participate in elite programs (particularly in lacrosse, gymnastics, ice hockey, gymnastics, tennis, and skiing/snowboarding) frequently spend $12,000 per year or more with the bulk of the money going toward travel and team fees, according to a 2019 survey by Project Play.”
Did you know? “The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $65,000 in 2021, according to the U.S. Census Bureau. 21 Using Pew’s yardstick, middle income is made up of people who make between $43,350 and $130,000.“What Is Middle Class Income? The Latest Numbers Available | Investopedia
And inflation compounds the cost of everything
Inflation affects the cost of raising children in several ways. For example:
Cost of goods and services
As the general price level of goods and services increases due to inflation, the cost of goods and services that families need to raise children, such as food, clothing, healthcare, and education, also increases. This can make it more expensive for families to meet their basic needs and provide for their children.
Cost of borrowing
Inflation can also affect the cost of borrowing money, such as taking out a loan to pay for a child’s education. When inflation is high, interest rates may also be high, which means that families will have to pay more in interest on their loans. Note: This includes an increase in the cost of any credit card debt you might be carrying.
Cost of savings
Inflation can also reduce the value of savings over time. If a family saves money for their child’s future expenses, such as college tuition, and inflation occurs, the value of those savings may not be enough to cover the actual cost of those expenses.
Overall, inflation can make it more expensive for families to raise children by increasing the cost of goods and services, the cost of borrowing, and by reducing the value of savings. It’s important for families to consider the impact of inflation when budgeting and planning for their children’s future expenses.
Inflation can have a significant impact on the cost of raising children. Inflation is the rate at which the general price level of goods and services in an economy increases over time. When inflation occurs, the purchasing power of a dollar decreases, which means that the same amount of money can buy fewer goods and services than it could in the past.
The increased psychological costs of raising kids
Parents in the US face a variety of intense challenges that create additional stress.
Here are some of the most significant ones:
- High cost of living: As I mentioned earlier, the cost of living in the US is relatively high compared to many other countries. This includes the cost of housing, healthcare, education, and childcare. This can make it difficult for families, especially those with lower incomes, to provide for their children’s basic needs. And struggling with providing for basic needs takes a toll on your mind and body.
- Work-life balance: Many parents in the US struggle to balance the demands of work and family life. The US does not have a federal paid parental leave policy, which means that many parents have to return to work soon after their child is born. Additionally, long work hours and limited flexibility can make it challenging for parents to attend to their children’s needs while also meeting their work responsibilities.
- Mental health: Parenting can be stressful, and many parents in the US struggle with mental health issues such as anxiety and depression. These challenges can be exacerbated by social isolation, lack of support systems, and stigma around mental health. Parents who don’t have health insurance—or health insurance that covers mental health care—are especially disadvantaged.
- Educational disparities: The US education system is not always equitable, and children from lower-income families and minority groups often face significant educational disparities. This can limit their opportunities and make it more difficult for them to succeed.
- Safety concerns: Safety concerns such as gun violence, bullying, and drug use can be a source of anxiety for many parents in the US. Many of us struggle with dropping our kids off at school each morning as we fear for their safety.
Is there hope for the future?
Yes. While these financial stressors are significant, your child(ren) will eventually age out of these costs. While these challenges are not unique to the US, but they are certainly significant ones that parents in the US face. Overall, the high cost of raising children in the US in 2023 is a complex issue that is influenced by many different factors. While some of these expenses may be unavoidable, there are also steps that families can take to manage their costs, such as budgeting, saving money, and seeking out affordable resources and services.
What’s the biggest cost increase you’ve seen related to raising your children? Let us know in the comments or drop us a line.
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