For many Americans, the joy of raising a child has become a financial headache and a constant source of worry as they struggle to keep up with the rising cost of housing and child care. Some parents are even sacrificing meals to help them pay their bills.
According to an overwhelming majority (68.5 percent) of 1,289 U.S. parents who took part in a new survey by CouponBirds conducted between January 4 and March 4, the country is currently living through a cost of parenting crisis.
More than a quarter (28.9 percent) said they rely on their parents for five or more hours a week to look after their kids, so as to save on expensive child care. Eight out of 10 (81.2 percent) said they are working more hours and taking extra jobs, while almost two-thirds (64 percent) are skipping meals so they can save money to pay for their children.
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That's because, in today's economy, raising a child isn't cheap. According to a 2023 study by LendingTree, the nationwide average for the cost of raising a child is $21,681 per year, considering rent, food, child care, transport, clothing, and health insurance (without adding in the cost of college education). Bringing up a child to the age of 18 would cost a parent $237,482, the company calculated.
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It's much higher than it used to be: Between 2016 and 2023, the cost of raising a child had increased by 19 percent, LendingTree found. Alarmingly, it still seems to be growing.
How Did Raising a Child Become So Expensive?
"It has been a steady, steep climb," Ted Rossman, senior industry analyst at Bankrate, told Newsweek about the rise of the cost of parenting in recent years.
Housing, food, child care—"all of these costs have been rising sharply in recent years," Rossman said. "And it's not just the past couple of years when inflation has affected just about everything. Things like child care and education have been far outpacing overall inflation for many years now."
While inflation has slowed down significantly since peaking at 9.1 percent in June 2022, with the Consumer Price Index rising 3 percent in June on an annual basis, American families, especially those with young kids, haven't yet been able to catch their breath.
According to a recent report from nonprofit Child Care Aware of America, child care costs have been rising steeply in the past few years, with the average price for one child in care being $11,582 in 2023, up 3.7 percent from a year earlier. This sum exceeds the typical rent by at least 25 percent in every state.
The nonprofit calculated that it would take 10 percent of a married couple's median income to afford this national average price, while a single parent would need to allocate 32 percent of their median income to cover the same cost.
The CouponBirds survey paints an even darker picture of the burden parents are bearing so that they can take care of and raise their children. More than half of respondents (57 percent) told the website that they spend at least a quarter of their monthly income on child care, while 24.5 percent spend more than 50 percent of their salary on it.
According to the U.S. government's recommendations, child care shouldn't take more than 7 percent of a family's income.
"To be honest, it is all expensive," Matt Schulz, LendingTree chief credit analyst, told Newsweek. "Even before your little one arrives, the costs start to pile up in ways that can be really daunting and even scary," he added.
"One of the costliest parts of raising a child is child care. It has long been incredibly expensive and seems only to be getting more so. Child care is so expensive that many parents find themselves forced to wrestle with whether it makes sense to go back to work outside the home after their child is born," Schulz said.
"So many parents find that their work salary only covers the cost of child care, leaving them questioning why they'd bother finding a job. That's a really difficult spot to be in, but it is far from uncommon."
A LendingTree study published earlier this year found that 75 percent of parents find raising children far more expensive than expected; food was the biggest financial burden, followed by child care. Clothing, school-related costs, extracurricular activities and health care also ranked high.
According to the latest estimates by the USDA, from 2015, middle-income, married-couple parents who had a child in 2015 could expect to spend a total of $233,610 to raise that child through the age of 17—and that's also without factoring in the cost of college education.
The biggest expense (29 percent) was housing, followed by food (18 percent), and child care/education (16 percent).
In June, overall housing costs rose 0.2 percent from May, and 5.2 percent from a year earlier—the slowest pace of year-over-year growth since 2022, according to data released on Thursday. Rents were up 5.1 percent from June 2023.
But rents, mortgage rates and home prices remain close to their pandemic peaks, and unaffordable for many.
In May, the latest data available on Redfin, the median sale price of a home was $438,441, up 4.8 percent from a year earlier. The median asking rent price in June was $1,654, up 0.7 percent year-over-year, according to Redfin. Mortgage rates are still hovering around the 7 percent mark.
Sacrifices for the Children, or Sacrificing Parenting
"Millions of Americans struggle with the cost of parenting," said Schulz. "A LendingTree survey found that 77 percent of parents say they've had to make financial sacrifices for their children. That's a really big number, but honestly, I would have thought it might have been even higher," he added.
"As the parent of a teenager, I can't imagine not having to make financial sacrifices for my kid, at least to some degree. That strikes me as something that only the richest of the rich in this country would be able to avoid."
The last time Bankrate asked parents how they were handling the cost of parenting, in 2022, 7 percent of U.S. adults surveyed said they were delaying having children because of the state of the economy.
"I'm sure that countless more are dealing with financial strains, including credit card debt. Credit card balances and interest rates are near record highs," Rossman said. "There's a spillover effect because when everything costs more, something has to give. The personal savings rate is quite low and more people are turning to credit cards and Buy-Now-Pay-Later (BNPL) plans in order to make ends meet," he continued.
"Raising kids is important and enriching, but it's very expensive," he added.
What Can Struggling Parents Do?
"Two of the biggest things parents can do are putting money away in an emergency fund and enlisting whatever help they can find to support them in the job of parenting," Schulz told Newsweek.
"It sounds cliché but it really does take a village to raise a child. That's true when it comes to the financial side of it as well," he continued. "Whether it comes in the form of enlisting family or trusted friends to help with child care, accepting other parents' hand-me-downs or taking advantage of services offered by the countless organizations that seek to make life easier for struggling parents, that help can be an absolute game-changer," he added.
Rossman recommends that struggling parents take advantage of tax breaks, "everything from the child tax credit to the child and dependent care credit, the earned income tax credit and more," he said. "Be creative, too," he added. "Maybe you and some friends or neighbors could pool child care resources, either by rotating a playgroup at each others' houses or hiring a shared nanny."
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