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How Much It Costs to Raise a Small Child in Each State
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It’s no secret that raising a child can be costly. Expectant parents may soon realize the costs to furnish a home for a newborn can add up quickly and exorbitantly, but that’s only the beginning. LendingTree researchers estimate that basic costs for raising a child in the U.S. equal $20,152 annually, and they’re trending upward. And that’s not counting the expenses for sports teams, summer camps, birthday parties and more.
Those essential costs can vary by state, running as high as $28,785 annually in the District of Columbia or as low as $13,596 in Mississippi. Parents or future parents may find it easier to support their children in states with higher incomes and/or lower local prices.
LendingTree researchers analyzed data from several sources to estimate and rank the costs to raise a child in each state and the District of Columbia.
- Basic annual expenses to raise a child (including day care) equal $28,785 in the District of Columbia, more than any other state. Hawaii and Maryland follow at $25,828 and $25,156, respectively, while costs are lowest in Mississippi at $13,596.
- The average essential costs to raise a child jumped 25.6% nationally between 2014 and 2019. Expenses totaled $16,040 in 2014, versus $20,152 in 2019.
- Over 18 years, raising just one child in Hawaii may cost $281,597 in total — the most expensive by LendingTree’s projections. Michigan parents may spend the least on raising a child, with essentials totaling $157,919 over 18 years.
- High incomes help parents in New Jersey spend the smallest portion of their incomes — 15.4% — on children’s basic needs. Maine families may be stretching their budgets the most, spending 24.1% of their income on children’s basics.
Raising kids in the capital? Better raise a lot of capital
While the District of Columbia’s museums and monuments might make the district a great vacation spot for families with kids, raising a child in the nation’s capital won’t be cheap.
For this study, researchers compiled data to account for expenses — housing, food, day care, apparel, transportation and health insurance — that families might incur while bringing up a child. Costs, detailed below, are based on a two-earner household with a girl younger than 5:
- Rent: The average difference in rent paid between households without children and households with their own child (younger than 18) present.
- Food: The difference (regionally) in typical spending between a two-person adult household and a two-person household with one child.
- Infant day care: The state average of center-based care.
- Girls apparel: The average amount spent each year (regionally) on apparel for girls between 2 and 16. Researchers used girls’ clothing for analysis due to typically higher spending compared to boys’ clothes.
- Transportation: The difference in transportation spending (regionally) for a two-person household compared to a two-adult household with a child.
- Insurance premiums: The difference in average cost of premiums for a single person on workplace insurance (times two for two adults) compared to a single workplace-based family plan.
- State’s tax credit or exemption for one child: This was subtracted from the overall expenses.
The $28,785 in annual expenses that it takes to raise a child attending day care in D.C. makes it the most expensive among the states.
The annual cost of day care in D.C. for an infant — $24,081 — more than doubles the national average, contributing to D.C.’s ranking as the most expensive place to raise a child. Though high average family incomes help make these costs relatively more affordable, those earning smaller salaries may find it difficult to manage their budgets.
Hawaii follows D.C. as the second most expensive state to raise children, costing an estimated $25,828 annually. Parents in the Aloha State may find themselves paying $4,428 more, on average, in rent than those without children. Maryland comes in third, where parents can expect to spend $25,156 annually to support their young children.
Of the 10 states with the lowest annual costs to raise a child, seven are in the South, including the three least expensive states — Mississippi, Alabama and Kentucky. Low day care costs help make raising children more affordable in these states.
Each of the 10 least expensive states has an average annual infant day care cost lower than the national average of $11,180. Mississippi has the country’s lowest average annual day care cost at $5,760.
In troubling news for parents across the country, it’s getting increasingly expensive to provide for young children. The national average cost to supply basics for a child jumped by more than 25% from 2014 to 2019. Costs increasing at such a rate means families should pay a little extra attention to saving and budgeting to avoid debt as they grow. While expenses won’t necessarily double with each additional child, parents might find day care costs have grown between their first and second child.
|Bare-bones cost of raising a child in the U.S.|
|2014||2019||Difference ($)||Difference (%)|
|Value of federal tax credit||-$1,000||-$2,000||-$1,000||100.0%|
|Total annual cost||$16,040||$20,152||$4,112||25.6%|
Note: Nominal dollars. Based on a married, two-earner couple (with one child) that earns the U.S. median of $77,263 and switches from two individual workplace insurance plans to one workplace family plan.
Sources: LendingTree analysis of data from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, Care.com, Kaiser Family Foundation and IRS.
“The average American’s financial margin for error is so tiny that even the smallest increases can cause headaches,” LendingTree chief credit analyst Matt Schulz says. “Factor in a nearly 26% growth in costs over just six years and that’s a difficult situation for many, many parents.”
Costs keep adding up as children grow older
Of course, the costs of raising just one child will change and add up over the years. LendingTree researchers projected expenses for 18 years of support, assuming five years of day care and that incomes and tax benefits will rise along with the standard cost of living.
While several states with the highest average annual expenses appear near the top of rankings, other states may inch ahead with the highest estimated costs for 18 years of supporting children. Parents in Hawaii may spend the most on bringing up their children with an estimated total cost of $281,597 to support a kid’s basic needs for 18 years.
Maryland and Alaska follow closely with costs estimated to total $252,569 and $236,370, respectively. On the other end of the spectrum, Michigan may outshine Southern states for child affordability as costs may total $157,919 over 18 years here, less than Alabama and Mississippi.
|States with the highest 18-year costs of the basics to raise a child||States with the lowest 18-year costs of the basics to raise a child|
|Rank||State||Estimated cost||Rank||State||Estimated cost|
|8||South Carolina||$215,488||8||West Virginia||$179,285|
Note: 2021 nominal dollars. Based on a married, two-earner couple (with one child) that earns the U.S. median of $77,263 and switches from two individual workplace insurance plans to one workplace family plan.
Sources: LendingTree analysis of data from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis, Child Care Aware of America, Massachusetts Institute of Technology (MIT) Living Wage Calculator, Kaiser Family Foundation and Tax Foundation.
Of course, anything can happen in any given state in the future that could make raising a family more or less affordable, but current trends highlight the importance for families to plan for both emergencies and fun or leisurely expenses for their children.
“Parents absolutely need to budget for fun stuff just as much as they need to budget for the essentials,” Schulz says. “The more complete your budget, the easier it is to adjust it when you need to.”
High incomes may help Garden State families flourish
Naturally, higher incomes can make raising children more affordable in states where costs run high. The average family income in New Jersey would allow parents to spend just 15.4% of their income on children’s expenses, the smallest allocation of any state.
Though the $20,785 it may cost to cover the basics in the Garden State falls in the top 20 most expensive in the country, the average family income of $134,704 means families only spend 15.4% of income on children’s necessities — the lowest percentage among the states.
|States where families spend the smallest portion of incomes on raising children|
|Rank||State||Average family Income||Average annual expenses for preschool-aged child||Percentage of income to child-related costs|
|4 (tie)||North Dakota||$105,819||$18,192||17.2%|
|6 (tie)||Rhode Island||$108,155||$18,804||17.4%|
|6 (tie)||District of Columbia||$165,620||$28,785||17.4%|
|10 (tie)||New York||$119,540||$21,353||17.9%|
|Sources: LendingTree analysis of data from the U.S. Census Bureau, U.S. Bureau of Labor Statistics, Child Care Aware of America, Massachusetts Institute of Technology (MIT) Living Wage Calculator, Kaiser Family Foundation and Tax Foundation.|
On the contrary, parents in Maine end up dedicating 24.1% of their income to raise a young child, making it the least affordable state to do so. Maine’s average family income of $91,617 falls more than $25,000 below the national average. Annual expenses for a preschool-aged child in Maine average $22,091, exceeding the national average.
Children are priceless, but they’re not cheap
For most families, the value of bringing a child into the world will forever outlive the costs to give them everything they need, but that doesn’t mean parents should spiral into debt to raise their children.
Use these tips to maintain healthy finances while caring for your kids.
- Plan, plan, plan. To the best of your ability, try to create and stick to a budget before and while bringing up your children. That may mean adjusting living expenses, cutting unnecessary personal spending and stashing more savings than non-parents. While saving for emergencies is important, it’s also prudent to contribute to fun savings goals like family vacations or sports leagues. “These things can help create family memories that will last for years, so don’t let them be ruined by debt,” Schulz says. “With a little planning and forethought, it can work.”
- Use credit and loans to your advantage. Activities like summer camp or other major purchases for your children can come with a hefty price tag. Parents who can’t front the cash may consider 0% interest deals on credit cards or low-interest personal loans to help cover the costs. As long as you have a plan for paying back what you borrow, Schulz says that extra payoff time can make that camp or that new violin fit into a budget.
- Don’t forget hand-me-downs. From clothes to athletic equipment to musical instruments, you might be surprised at what other families are willing to give away for free when their kids have grown. Check out social media listings or second-hand stores to find opportunities to save. Remember your kids will grow up, too, so it’s not always necessary to shell out for new items, especially if it means blowing your budget.
Analysts compiled data to determine the average annual family expense for a girl younger than 5 for a two-earner household in each state and the District of Columbia. One of LendingTree researchers’ sources — the Consumer Expenditure Survey — differentiates apparel spending by gender; families spend slightly less on apparel for boys than girls, on average.
Components included increased family expenses for housing, food, child care, apparel, transportation and health insurance. State tax benefits (credit or exemption) were subtracted from the budget to create a total annual cost. To determine the value of a tax exemption, analysts assumed the parents’ tax return was filed jointly and had a combined income of $77,263 (the national median income for families in 2019 — the latest available).
Health insurance premiums were calculated as the difference between one workplace family plan and two individual workplace plans. To calculate the 18-year cost of raising a daughter, analysts included five years of in-center child care.
Sources were latest available and included:
- U.S. Census Bureau American Community Survey, five-year estimate (tabulated and microdata)
- U.S. Bureau of Labor Statistics 2019 Consumer Expenditure Survey
- “The US and the High Price of Child Care: 2019” from Child Care Aware of America
- Massachusetts Institute of Technology (MIT) Living Wage Calculator
- Kaiser Family Foundation
- Tax Foundation
Food, transportation and apparel costs are regionally based, while the others are state based.