The cost of raising a child in the US is highest in these five states.
High inflation has driven up the prices of nearly everything in the United States, including the cost of raising a child. This has become a significant burden for many families. Matt Schulz, chief credit analyst at LendingTree, noted, “The cost of everything is rising. There’s so much that goes into child care, including rent, payroll, insurance, and much more. When all those costs shoot up, the overall cost of child care does, too.”
Between 2016 and 2021, the cost of child care surged nearly 20%, according to LendingTree data. The annual expenses for raising a child, excluding tax exemptions or credits, reached $21,681 in 2021, up from $18,167 in 2016. This means that over 18 years, the average family spends about $237,482 to raise a child, not including the cost of college education.
However, recent research by SmartAsset indicates that the financial strain is even more pronounced in some states. Here is a detailed look at the five most expensive states to raise a child:
1. Massachusetts
Raising a child in Massachusetts is the most expensive in the country, with an estimated annual cost of $35,841, nearly double the national average. Child care expenses alone amount to $21,503 per year, the highest of any state. Other significant costs include housing at about $5,000 per year and food at $2,190 per year. Over 18 years, raising a child in Massachusetts costs approximately $439,000 more than in Mississippi, the least expensive state.
2. Hawaii
In Hawaii, the annual cost of raising a child is $35,049. Child care expenses are significant, averaging around $19,500 per year. Housing is another major expense in Hawaii, with the addition of a child to a two-family household costing an extra $6,188 annually. This compares to an additional $4,983 in housing costs in Massachusetts.
3. Connecticut
Connecticut ranks as the third most expensive state to raise a child, with an annual cost of $32,803. This includes around $19,554 per year for child care, $4,139 for additional housing expenses, and $2,100 for groceries.
4. Colorado
In Colorado, the cost of raising a child is about $30,425 per year, making it the fourth most expensive state. Child care costs alone are substantial, at $30,425 annually. Food and housing add to the financial burden, costing approximately $2,000 and $4,100 per year, respectively.
5. New York
New York is the fifth most expensive state to raise a child, with an annual cost of $29,468. Child care expenses in New York are around $17,821 per year. Housing adds about $3,543 to the annual total, while groceries cost approximately $2,100.
Least Expensive States
In contrast, raising children is considerably cheaper in several Southern states. Mississippi ranks as the least expensive state, with a total annual cost of $16,151. Other affordable states include Arkansas, Louisiana, Kentucky, and Alabama.
Factors Contributing to High Costs
Several factors contribute to the high costs of raising children in these states. Child care expenses are a significant component, influenced by wages for child care workers, rent for child care facilities, and insurance costs. Housing costs also play a crucial role, especially in states with high property values and rental rates. Additionally, food and general living expenses have been rising due to inflation, adding to the overall financial burden on families.
Conclusion
The rising costs of raising a child in the U.S. highlight the financial pressures faced by families, particularly in states where living expenses are significantly above the national average. As inflation continues to impact the economy, families may need to find ways to manage these increasing costs, whether through budgeting strategies, seeking financial assistance, or considering relocation to more affordable areas. The disparity between states underscores the varying economic challenges across the country, emphasizing the need for tailored financial planning and support for families in higher-cost regions.
