It can cost up to $35,000 annually to raise a single child in the most expensive places. Even on average, the first child costs parents more than $20,000 annually during their early years. These costs can get substantially higher for parents who want to have a second or third child.
To measure the baseline costs of expanding a family across the United States, SmartAsset examined the costs for housing, food, childcare, healthcare and other necessities across 381 metro areas when a family with two working adults adds one, two or three children into their budget.
- The cost of raising three children averages more than $50k per year during the early years. Roughly 50% of that goes to childcare, 14% to additional housing costs and 14% to food. Medical costs, transportation and other necessities make up the rest. It can cost upwards of $90,000 annually to raise three children in the most expensive places like Ann Arbor, MI and San Francisco.
- The third child costs parents about 20% less than the first. On average, the first child costs most, with an annual average of $20,814 nationwide. That number drops down to $17,413 annually for the second child, and the average cost decreases even further for the third child to $16,513.
- Michigan and Massachusetts areas have some of the highest childcare costs. Childcare in Ann Arbor, MI costs most at over $22,000 annually per child. The Kalamazoo-Portage metro follows closely behind at nearly $20,000 per year per child. Barnstable Town and Boston, MA, and the Detroit metros also make the top five most expensive places for childcare.
- It’s cheapest to raise a family in the South. When it comes to the most affordable places to add children to the family, metropolitan areas in South Carolina (Sumter, Florence), Alabama (Gadsden, Dothan, Anniston-Oxford), Tennessee (Morristown, Jackson) and Mississippi (Jackson) and more dominate.
- North Carolina has the highest healthcare costs for children. Whether parents have one, two or three children, it’ll cost them over $10,500 per year in health insurance and other medical costs in Fayetteville, Rocky Mount, Goldsboro, Greeneville, Winston-Salem, Charlotte, Wilmington, Raleigh and other North Carolina metro areas.
1. Ann Arbor, MI
Ann Arbor is particularly expensive to raise children due to the exceptionally high childcare costs. It has the largest annual cost per child at $22,154. Food for three children is $14,374, and $9,159 for one child.
- Cost of first child: $31,670
- Cost of second child: $30,469
- Cost of third child: $28,924
2. San Francisco-Oakland-Berkeley, CA
The San Francisco area has a reputation for being expensive. And this is the single most expensive metro area to raise a single child. But, if a family doesn’t need to upgrade their housing between the first and second child, they’ll get significant reprieve with the second.
- Cost of first child: $35,647
- Cost of second child: $24,988
- Cost of third child: $29,552
3. San Jose-Sunnyvale-Santa Clara, CA
While many costs are directly in line with San Francisco’s due to their proximity, the San Jose area has a slight edge when it comes to childcare costs. Annually, childcare costs about roughly $1,000 less per child in San Jose, which adds up roughly to $15,785.
- Cost of first child: $33,228
- Cost of second child: $24,455
- Cost of third child: $29,147
4. Kalamazoo-Portage, MI
The childcare prices in the Kalamazoo area far outpace the costs of other necessities. Childcare costs $19,853 annually here, second only to Ann Arbor. This is enough for Kalamazoo to rank highly in overall costs, despite a general cost of living 83% below average.
- Cost of first child: $30,786
- Cost of second child: $28,167
- Cost of third child: $27,321
5. Barnstable Town, MA
At almost a two-hour drive from Boston, Barnstable Town is the fourth-most expensive place to raise a single child. The second child is significantly cheaper, but the third costs less than $500 more annually than the second.
- Cost of first child: $33,184
- Cost of second child: $26,233
- Cost of third child: $26,717
6. Boston-Cambridge-Newton, MA-NH
The Boston area is expensive in general – about 48% more expensive than the U.S. average. And the cost of raising children in the area is consistent with that scale, families pay roughly $18,000 annually in childcare for each child.
- Cost of first child: $32,307
- Cost of second child: $26,020
- Cost of third child: $27,589
7. Trenton-Princeton, NJ
Childcare for a family here costs $10,413 per child. And while the Trenton-Princeton metro generally has high prices for housing, food and childcare, healthcare costs are below average.
- Cost of first child: $31,314
- Cost of second child: $25,566
- Cost of third child: $25,305
8. Santa Cruz-Watsonville, CA
The Santa Cruz metro is particularly expensive for housing. A family with three children should expect to pay at least $48,000 annually on a small rental. However, childcare is closer to average, at $12,410 annually per child.
- Cost of first child: $33,877
- Cost of second child: $21,080
- Cost of third child: $26,337
9. Detroit-Warren-Dearborn, MI
This is the first metro area in the top 10 where it costs less than $30,000 annually to raise a first child. Detroit makes the top 10 thanks to exceptionally high childcare costs – just like the other Michigan contenders. Despite Detroit being only 2% more expensive than the U.S. average, childcare costs fifth-most studywide at $17,754.
- Cost of first child: $28,917
- Cost of second child: $26,067
- Cost of third child: $24,440
10. Boulder, CO
In the Boulder metro, the cost of childcare is $14,914 annually for every child. Meanwhile, a home for two adults and three children will likely cost at least $28,224 per year.
- Cost of first child: $29,486
- Cost of second child: $23,584
- Cost of third child: $25,743
Data and Methodology
SmartAsset used MIT Living Wage Calculator data to compare the most recent living costs of households with two working adults and one child, two children, and three children to that of a childless household with two adults. The costs included in our analysis are food, housing, childcare, healthcare, transportation and other necessities within each metro area.
Cost of living data comes from C2ER’s Cost of Living Index for Q1 2023.
- Data is a mix of the most recently available subdata, spanning 2021 and 2022
- Methodology assume housing needs do not change between one child and two children
Financial Tips for New Parents
Start saving for your child’s education. It’s never too early to start putting money away for your child’s future education. 529 savings plans are tax-advantaged accounts that help investors put money away for future education costs. Money that’s saved in a 529 plan grows tax free and can also be withdrawn tax free as long as you use the funds to pay for qualified higher education expenses like tuition, mandatory fees and books required for enrollment.
Don’t forget about retirement. You’ll have added financial responsibilities as a new parent, but try your best to continue to save for retirement. SmartAsset’s retirement calculator can help you track your progress and estimate how much money you’ll have at retirement age.
Work with a financial professional. Whether you want to buy a home, invest in the stock market or purchase life insurance to protect your family, a financial advisor can help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area.
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