The Cost of Raising a Child, State by State

If you have been thinking of starting a family but, as most of us do, want to be financially ready for the costs, a recent survey has revealed the cost of raising small children that may help. Or, it can provide some serious sticker shock. Released in September, LendingTree's study compiled data from the U.S. Bureau of Labor Statistics, MIT's Living Wage Calculator, the Kaiser Family Foundation, the Internal Revenue Service, the Tax Foundation, and Care.com. In it, they discovered just how much it costs for a two-income family to raise a child from infancy until the age of 5.

Costs of raising a young child

When it comes to raising a child, there are more financial factors to consider besides the clothing and gear a child needs. Insurance premiums change when you add a child. Transportation may increase as you get your child to and from daycare, doctor's appointments, and parent-and-me programs. And your rent or mortgage may increase if you need to move into a larger space to make way for baby.
As a two-income family, this means requiring daycare for both parents to work, although each state provides tax credits or exemptions for children that can ease this burden on your finances.
In a state-by-state review, the most expensive place to raise a young child in Washington, D.C., where the average cost of daycare is $24,081 - more than double the national average. Second in the nation? Hawaii, where rents are higher than most states.
The study also revealed it wouldn't get less expensive to raise a child, with the national average of raising an infant to 5-year-old increase by more than 25% between 2014 and 2019.

The 10 most expensive states for raising a young child

StateRentFoodInfant day careApparelTransportationInsurance premiumsVale of dependent exemption or tax creditTotal annual cost
Washington, D.C.$2,352$1,413$24,081$89$2,294$3,260$0$28,785
Hawaii$4,428$1,687$14,100$99$2,199$3,405-$90$25,828
Maryland$2,880$1,413$15,403$89$2,294$3,229-$152$25,156
Connecticut$2,892$1,642$15,600$152$1,944$1,881$0$24,111
Colorado$1,272$1,687$15,600$99$2,199$3,124$0$23,981
California$1,200$1,687$16,452$99$2,199$3,520-$383$23,586
Minnesota$1,104$1,444$16,120$89$2,294$3,130-$53$23,029
Virginia$1,596$1,413$14,560$89$2,294$3,130-#53$23,029
Washington$1,260$1,687$14,844$99$2,199$2,590$0$22,679
Massachusetts$936$1,642$16,452$152$1,944$1,601-$50$22,677

The 10 cheapest states for raising a young child

StateRentFoodInfant day careApparelTransportationInsurance premiumsVale of dependent exemption or tax creditTotal annual cost
Mississippi$1,140$1,413$5,760$89$2,294$2,975-$75$13,596
Alabama$1,332$1,413$7,280$89$2,294$2,231-$25$14,614
Kentucky$1,704$1,413$7,440$89$2,294$2,217$0$15,157
Arkansas$1,404$1,413$6,443$89$2,294$3,589-$29$15,203
West Virginia$2,076$1,413$8,029$89$2,294$1,988-$130$16,165
Georgia$576$1,413$8,729$89$2,294$1,988-$173$16,165
Michigan$1,296$1,444$10,287$89$2,310$985-$208$16,203
North Carolina$684$1,413$9,294$89$2,294$2,710$0$16,444
Montana$1,632$1,417$8,861$99$2,199$1,834-$177$16,473
Idaho$2,064$1,687$8,636$99$2,199$1,834$0$16,519

The total cost of raising a child

Of course, after the age of 5, a child continues to bring additional costs. Families in Hawaii, for example, can expect to spend a total of $281,597 on raising a child until the age of 18. The cheapest state, Michigan, still costs $157,919.

The 10 states where it will cost the most to raise a child to adulthood

StateEstimated cost
Hawaii$281,597
Maryland$252,569
Alaska$236,370
Connecticut$231,198
Colorado$228,858
Virginia$225,233
Kansas$218,022
South Carolina$215,488
Washington$215,250
New Hampshire$213,342

How to prepare for the costs

Couples wanting to plan for the costs and be more financially secure are not wrong. Children are a blessing, but they are also expensive. If you are considering starting a family, be sure to get your financial ducks in a row first.
Insurance. It's expensive to have a baby physically, so having good healthcare is key to keeping costs down. Not only will there be delivery and hospital room costs but expect to visit the doctor monthly and then eventually weekly, which could lead to several co-pays. After your child is born, that's one more family member who often needs to see the doctor.
It's also a good time to consider life insurance if you do not already have it to support your child if anything happens to you or your partner.
Save. Create a savings account specifically for your growing family to help ease the additional costs that come when you leave the hospital. Saving for diapers and clothing is one thing. Instead, prepare more for the high cost of daycare. If you feel this will be a struggle, use the pregnancy months to research and find suitable yet more affordable options.
You'll also want to create a savings account for your child's education, such as a 529 plan.
Clean up your debt. Use this time before your child to clean up your credit report and eliminate high debts. Create a budget to tackle debts to get them to nominal numbers so you won't have both your debts and the costs of a child to contend with during those early years. Plus, if your credit score is higher, it can help you get low interest rates on future loans you may need, including a mortgage if you are renting and ready to buy your first family home.

See How Much Experian Boost™ Can Raise Your Credit Scores Instantly

  • Experian® is one of the three credit bureaus providing your credit scores
  • Experian Boost is a free feature that can help you increase your credit scores for making on-time payments for your phone, utility, or streaming service bills for 100% free and in minutes
  • Average users who received a boost improved their FICO® Score 8 based on Experian Data by 13 points. Some may not see improved scores or approval odds. Not all lenders use credit information impacted by Experian Boost™.
  • Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether.

The bottom line

While no parent can ever truly be ready to have a baby - many of us have tried - you can soften the financial blow by preparing in advance. Raising children is expensive, but as every one of us will tell you, extremely worth it.

Reclaim Up to $610/Year in Car Insurance

Here’s the thing: your current car insurance company is probably overcharging you. But, who has the time to look around for around a new company?

A website called CarInsurance.net makes it super easy to see if you’re getting the lowest price. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using CarInsurance.net, people have saved up to $610 a year.

It takes just a few minutes to see how much CarInsurance.net could put back in your pocket. And the best part? Because we’re driving less, some insurers are slashing prices this month.

Share this article

RECOMMENDED POSTS
What is Inflation and How Does It Affect You
October 15, 2021
What is Inflation and How Does It Affect You
How to Get Out of a Car Lease
October 06, 2021
How to Get Out of a Car Lease
Forbes 400 Richest People in the World
October 06, 2021
Forbes 400 Richest People in the World
Where You'll Eat the Cheapest Pizza in the Country
September 20, 2021
Where You'll Eat the Cheapest Pizza in the Country
Start Making Money Moves