It’s been estimated that raising a child from birth through age 18 costs just under $227,000, or slightly more than the current median price of a home in the U.S. That figure doesn’t include college. Once a four-year degree is factored in, along with “opportunity costs” related to a parent’s slower career path related to child-rearing, it’s not uncommon to cost over $1 million to raise a child from birth to college age. The numbers are enough to scare off potential parents from having one child, let alone more—but there’s an argument to be made that kids are, in fact, cheaper in multiples.
Children aren’t exactly the equivalent of a “buy one, get one free” deal. But, thanks to hand-me-down clothing, cribs, and other kid detritus, the amount needed to raise a second child is much less than the first. And a third kid? That baby’s quite an amazing bargain, by comparison.
The USDA is the agency that comes up with the cost estimates for parents: A baby born in 2010 will cost $226,920, on average, or $286,860 with inflation, to raise until age 18.
There are plenty of variables, though. Most obviously, household income has a lot to do with how much money is spent on child-rearing, and the costs to parents increase hand in hand with household income. While a low-income family (under $57,600 per year in household income) can expect to drop $163,440 in the course of raising a child, wealthier households (those earning $99,730 and up), will spend significantly more: $377,040.
What’s more, as a recent USA Today column discusses, the per-child costs decrease substantially when parents have a second and third child. The column is written by Laura Vanderkam, who is the author of the forthcoming book All the Money in the World: What the Happiest People Know About Getting and Spending and the mother of (you guessed it) three kids.
Vanderkam writes that while an 11-year-old only child might cost a middle-income family $15,830 annually, a family in that same income bracket would spend $26,490 per year on their kids. In other words:
Having a second child added only $10,660 to the tab. After that it gets better. A middle-income family with kids ages 11, 13 and 16 spends $31,070. The third kid costs just $4,580.
What a deal! At some point, you must start making money by having more kids, right? I have three kids myself, so I’m allowed to, well, kid.
What happens, according to researchers, is that that families with two children spend 25% less per child than those with one kid. Families with three kids, in turn, spend 22% less per child than two-child households.
Figuring out how much raising kids costs, then, isn’t as simple as multiplying the number of children in the family by the USDA’s estimate.