Cost of Raising a Child in the U.S. Approaches $500,000 for the First Time, New Report Finds

For the first time in American history, the projected cost of raising a child from birth through age 18 has climbed to within striking distance of half a million dollars, according to a new report from Birth Injury Lawyer that examines nationwide child-rearing expenses. The total now stands at an estimated $471,948, a figure that has risen 185% over the past 25 years and now dwarfs the median American household’s annual income nearly six times over.

The report, which draws on data from SmartAsset’s 2025 Cost of Raising a Child study (built using MIT Living Wage Calculator figures), the U.S. Census Bureau, and the CDC’s National Center for Health Statistics, paints a picture of a financial commitment that has outpaced wage growth, inflation, and the expectations of most new parents.

In 2025 alone, the average annual cost of raising a child under five reached $27,743, a 4.5% increase over 2024, at a time when the national median household income sat at $81,604. That imbalance means the average American family now spends roughly six times its yearly earnings over the course of raising a single child to adulthood.

Housing represents the single largest expense, accounting for 31% of annual costs, or $154,800 across 18 years, driven by the need for larger homes, dedicated bedrooms, and access to stronger school districts. Food follows at 18% of the annual total ($89,892 over 18 years), with healthcare (11%, $54,936), childcare and education (historically the most volatile category, totaling $52,476), transportation (10%, $49,932), miscellaneous costs (8%, $39,942), and clothing (6%, $29,970) rounding out the remaining expenses.

Notably, the report finds that childcare costs follow a dramatic arc, peaking at $27,745 during a child’s first five years before falling to $17,789 during school-age years and $6,942 during adolescence, reflecting the shift from full-time daycare to after-school programs and, eventually, extracurricular fees.

But the $471,948 figure, researchers note, doesn’t capture the full financial picture. Parents who step back from the workforce to raise children face steep secondary costs. According to TIAA research cited in the report, a parent earning $60,000 annually who leaves the workforce can lose up to $100,000 in retirement savings alone, assuming a 7% rate of return. Combined with nearly $19,000 in average pregnancy and childbirth-related healthcare costs, the true cost of parenthood extends well beyond the categories typically tracked in household budgets.

The report also connects rising costs to a broader demographic shift: the U.S. general fertility rate fell to a record low of 53.1 births per 1,000 women aged 15 to 44 in 2025, continuing a 23% decline since 2007. For the first time in the 11-year history of the American Family Survey, finances ranked as the number one reason Americans report capping the size of their families, cited by 43% of respondents, more than twice as often as any other factor.

“The conversation around the cost of raising a child usually focuses on what families spend. The more consequential question is what they give up,” said a spokesperson for Birth Injury Lawyer ”Delayed homeownership, depleted retirement savings, long-term career interruptions, these are simple facts of life for American parents. And as child-rearing costs rise, it’s a scenario that can’t continue unaddressed.”

The report’s authors note that financial planners generally recommend new parents build an emergency fund covering three to six months of expenses and begin saving as early as possible: a $500 monthly contribution starting at birth, assuming a 6% return, could grow to roughly $199,000 by the time a child reaches college age, compared to just $64,000 if that same saving plan begins in fourth grade.

For families already stretched thin by the rising cost of raising a healthy child, an unexpected birth injury can turn a difficult financial situation into an overwhelming one.