Raising kids has always been costly, but inflation and regional price differences have made it even harder for families to keep up. While no one parent can control rising costs, understanding where the money goes and planning ahead can make a big difference.

Jennifer Yuen, a Michigan-based mom of twins, told “Good Morning America” that the expensive costs of raising two children have required her family to make sacrifices and adapt their lifestyle.

“We had to get creative with our budget early on. We rely on a mix of day care, family help and flexible work schedules to make things more manageable,” she said.

Yuen’s story is a reality for many parents navigating the growing financial strain of raising children. Housing, food, and child care, which are already among the biggest expenses for families, continue to climb, forcing many to rethink their budgets and long-term financial plans.

According to a 2022 analysis from public policy think tank The Brookings Institution, a middle-income family with two children could expect to spend approximately $310,605, adjusted for higher future inflation, to raise one child born in 2015 through age 17.

More recent data suggests that costs have continued to rise since then. A 2023 study by LendingTree estimated that the average annual cost of raising a child has climbed to $21,681, a 19% increase from 2016, bringing the total estimated cost per child to $389,000 over 18 years.

Where you live makes a huge difference: A 2024 SmartAsset study estimates that raising a child in Massachusetts, the most expensive state, costs nearly $36,000 per year, while in Mississippi, the cheapest state, it’s less than half that.

Over 18 years, that’s a $439,000 difference.

So what’s driving these skyrocketing costs, and what can parents do to manage them?

Breaking down the biggest expenses

The following percentages come from analyses by LendingTree and SmartAsset, but it’s important to note that these figures are estimates and actual costs can vary based on location, lifestyle and economic conditions.

• Housing: 29% of total costs — Housing is the biggest financial drain on parents, making up nearly a third of child-rearing costs. In some states, like Hawaii and California, families are hit especially hard: In Hawaii, adding a child to a two-income household increases housing costs by $6,188 per year, while in California, it’s $5,573.

• Child care and education: 16% — For working parents, child care is often the biggest expense after housing. Jennifer Seitz, a certified financial education instructor and director of education at Greenlight, a family finance company, told “GMA” that child care expenses “have soared over the past few decades, and recent Department of Labor data shows that day care costs in some areas can be close to 30% of median family income.” Massachusetts leads the nation with an average annual child care cost of $21,503, according to the SmartAsset study, followed by Hawaii ($19,592), Connecticut ($19,554) and New York ($17,821). Meanwhile, in Mississippi, child care costs just $4,725 per year — a fraction of what families pay in high-cost states.

• Food: 18% — Food costs are rising everywhere, and families feel it at the grocery store. According to the U.S. Department of Agriculture, a family of four now spends between $983 and $1,599 per month on food, depending on dietary habits and location.

• Transportation: 15% — From upgrading to a bigger car to covering rising gas prices and insurance, transportation costs eat up another big chunk of the budget.

• Health care: 9% — Even with insurance, doctor visits, prescriptions and unexpected emergency room trips add up quickly. Seitz noted, “New parents can sometimes underestimate out-of-pocket healthcare costs, as insurance doesn’t always cover everything. Copays for unexpected medical procedures, specialist visits and higher prescription costs can add up.”

• Miscellaneous: 7% — Sports fees, birthday parties, summer camps, after-school activities — it all adds up. “Families with multiple children may notice an exponential increase in grocery bills, entertainment and milestone celebrations — expenses established with one child can grow significantly with more,” Seitz explained.

• Clothing: 6% — Kids don’t just outgrow clothes — they can also destroy them. Even thrifty parents find themselves constantly restocking wardrobes.

How parents can manage costs

It’s easy to feel overwhelmed by these numbers, but there are ways to prepare and cut costs where possible. Seitz emphasized the importance of long-term planning.

“Overall, parents may not consider the big picture when budgeting for a child. By taking future expenses into account, families can create a financial plan that adapts as their children grow and helps them avoid costly surprises,” Seitz said.

Know your state’s costs

Where you live matters. The difference between raising a child in Massachusetts and Mississippi is nearly half a million dollars over 18 years. If you have flexibility, moving to a lower-cost area could mean big savings.

Take advantage of tax breaks

Many parents don’t fully maximize Child Tax Credits, Dependent Care FSAs — a “pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare,” according to the Federal Flexible Spending Account Program — and other deductions that could help offset costs.

Start saving for college early

“The earlier you start saving for college, the more time your money has to grow,” Seitz said.

A 529 college savings plan lets you set aside money tax-free for future education expenses. Even small contributions add up over time.

Look for cost-saving alternatives

• Buy secondhand clothes and baby gear.




• Meal plan and buy in bulk.




• Consider child care alternatives like nanny shares or employer-subsidized programs.

Seitz advises parents to optimize their spending. “Take advantage of high-yield savings accounts, cash-back rewards, and bulk purchasing for essential items to stretch your dollar further,” she said.

For Yuen, meal planning has been “a game changer.”

“We bulk cook on Sundays, and we’ve cut our grocery bill down significantly by sticking to a strict list and avoiding impulse buys,” she said.

Plan for unexpected expenses

Beyond everyday costs, children come with unpredictable expenses. Yuen highlighted the importance of planning for these extras.

“We keep a separate savings account just for the ‘extras’ — school trips, activities, even unexpected growth spurts. It helps us avoid dipping into emergency funds,” she said.