According to a recent study by LendingTree, the cost of raising a small child has jumped 35% over the past two years.
Here’s their breakdown of the annual cost of raising a child in 2025:
On average, having a kid costs an additional $29,419 per year or about $2,400 per month.
Let’s break down a few of this study’s numbers for context.
They derived the additional rent cost by taking the difference in average rent paid by households without children and households with a child younger than 18 present. I think this is pretty intuitive; in most cases, kids cause you to upgrade to a better or bigger housing situation.
The additional food cost was calculated the same way, taking the average difference between a two-person household and a two-person household with a child.
The day care costs were based on full-time, center-based child care for one infant.
Apparently, the researchers chose girls’ clothing instead of boys’ due to the typically higher price of girls’ clothes.
And the health insurance costs were calculated using the average difference in premiums for a couple on a workplace plan compared to a family plan with at least one child.
As you can see from the chart, day care makes up a huge portion of the added expense of having a kid. It was also the category that had the biggest increase in cost since 2023.
The cost of food and health insurance premiums were the other two categories that took a big leap from 2023 to 2025. The $1,600 decrease in the child tax credit doesn’t help either.
All in all, if you assume just five years of day care costs, families are projected to spend around $300,000 over 18 years of raising a single child. If you have more than just one child, well, you can do the math.
If you want to break it down by state, the data shows that Hawaii is the most expensive at around $36,000 per year in additional cost. South Carolina is the least expensive state at $17,500 annually. And Pennsylvania ranks right in the middle at $23,000.
And these numbers don’t include vacations, sports, extracurricular activities, private education, etc.
So yeah, having kids is expensive. This isn’t breaking news.
According to a study by Pew Research Center, 41% of adults under 40 cited financial affordability concerns as the reason for not wanting to have children.
That’s valid. I’m not sure I know of any parent who doesn’t worry about being able to financially support their family.
Having kids will slow down your progress towards building monetary wealth.
If your ultimate goal in life were to accumulate as much wealth as possible by the time you die, I can tell you how to accomplish that fairly easily: Work every single day, eat beans and rice for every meal, don’t spend money on anything that’s not essential for sustaining life, never get married, and never have any kids.
You’ll achieve financial independence really quickly by following that formula.
However, money itself isn’t the goal; it’s simply a means to an end.
There are plenty of financial decisions that may negatively impact your net worth, but will have an overwhelming positive impact on your life.
Having kids might be at the top of the list.
Thanks for reading!
Jake Elm, CFP® is a financial advisor at Dentist Advisors. Jake a graduate of Utah Valley University’s nationally ranked Personal Financial Planning program. As a financial advisor at Dentist Advisors, he provides dentists with fiduciary guidance related to investments, debt, savings, taxes, and insurance. Learn more about Jake.