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Nothing can be more beautiful than the thought of settling down with your loved one and starting a family. I believe one takes this decision only when he/she thinks that they are well loaded to start a family. Family means children, because they are the greatest blessing in anyone's life and without their presence a family cannot be a family in real sense. Raising a kid will give you memories which will be cherished forever. Indeed, it is a blissful feeling.

Determining Child Care Costs

Parenting is not an easy task. While starting a family and planning to have a kid, first and foremost the parents should be prepared for it, both mentally and financially. A considerable amount of money goes into raising a child, hence children can be called a household's single greatest expense. The expenditure goes into clothing, food, education and other necessary areas. One must be wise at managing funds successfully for your child's development, this will ensure that your family stays happy and healthy.

The Department of Agriculture, of the United States, determines the average cost of raising a child in America. And the cost is determined from the birth of the child till the age of 17. Every year the department estimates the cost and it is based on common trends throughout the country, the averages, infiltration rates et al. They bring up the average estimate depending upon the key areas which determine a major cash flow for the families on their kids. They are,
  • food
  • healthcare
  • education
  • housing
  • transportation
  • childcare
Average Cost of Raising a Child

As per the current inflation pattern, the average cost of raising a child per year can be estimated around $222,000, to raise up to maturity, i.e. up to 17 years of age. For an average middle income family, the annual cost of raising a child can range from $11,500 to $13,500 per year, and this depends upon the age of the child and there is a possibility that it may increase as the age increases. Section wise, childcare takes almost 17% of the total spending, and education takes 16%.

It would be interesting to know that families with more kids spend less than families with a single kid. It is inversely proportional, it means that the more kids you have, the less it costs to raise them. The reason is obvious, kids can share a bedroom, clothes and toys with each other, one can save on food purchased in bulk. Also few educational institutions may offer sibling discounts. This translates into a saving of 22% per child for families with three or more children.

On an average, families whose annual income is $70,000 (yearly) can spend $260,000 (composite average) to raise a single child up to the age of 17. The wealthiest of families in the country are estimated to spend about $290,000 or more. If we were to analyze it on a regional scale, then families in the Northeast have the biggest spending costs followed by cities in the West, and then Midwest. Child-rearing cost is lowest amongst families in rural areas and Southern cities.

Please bear in mind that the figures given here are approximate figures and are composite averages. It may be a possibility that your spending may not be anywhere near the average cost. Another point to be noted is that, these averages are the estimates only until your child is 17 (or 18 depends upon when will your child go to college), and hence does not include college expenses, which can sky-rocket depending on various factors. Lastly, since the cost of living is different from family to family, the cost of raising a child will also vary.