How to use this to calculate the cost of raising a child
Estimating the cost of raising a child can vary widely depending on where you live, your
income
level, your lifestyle, and your child's needs. However, this calculator can help you
break down
the expenses and more accurately estimate the total cost for your preparation for the
future
budget on child costs. Here's a step-by-step guide:
-
Customize the Age Range Incurred in Each Category:
The calculator allows you to input your child's age range for each expense
category. You
will determine the age range (from their current age to age 22) you will spend
in this
category to raise or support this child.
-
Input Monthly Expense in Each Category:
For each expense category, input the monthly expense you expect to spend on your
child
based on the cost when that expense starts to incur.
-
Adjust for Inflation:
If you want a more accurate future estimate, you can adjust for inflation. The
calculator provides a % growth input to factor in expected inflation rates,
making the
cost projection more realistic as prices increase over time. 3% is usually a
reasonable
estimate for US long-term inflation. However, some expenses, such as college
tuition,
may grow faster.
-
Set Personalized Growth Rate:
The calculator lets you further adjust the growth rate assumption for costs
based on
personal needs. This is useful if you believe certain categories of expenses
(such as
healthcare, education, or childcare) will rise at a different rate in your child
than
average inflation.
-
Review the Calculated Estimate:
After entering the relevant details, you can check the total expense and
educational
expense trend by year in the chart. In the summary table, you can estimate the
total
cost of raising your child at each age or all ages, with a breakdown by
category. The
total expense is calculated at the bottom of the table.
-
Compared with the national average:
According to USDA
estimate, parents of a child born in 2015
may expect to spend $284,570 on average to raise a child through age 17,
excluding the
cost of a college education. From 2015 to 2025, that cost may further rise 34%,
to
$381,400, due to the high inflations up to date.
This estimate can help you plan financially for the future, especially in terms of
budgeting for
raising children. Use this to understand where you may need to allocate resources or
adjust your
financial planning.