Soaring inflation has made almost everything more expensive. And it has significantly increased the cost of one major budget buster – raising kids.
It now costs $310,605 for a married middle-income couple with two children to raise their youngest child from birth through high school, according to a recent estimate from the Brookings Institution.
The estimate builds on a 2017 report from the US Department of Agriculture. Back then, the agency estimated that it cost a middle-income, married couple $233,610 to raise a child to the age of 17. The price factored in expenses for food, shelter and other necessities for a child born in 2015, but notably not the cost of a college education.
Brookings found that today’s record-high inflation has dramatically increased those costs. Brookings first shared the numbers with the Wall Street Journal.
“It causes people to recognize that when you start having a family or when you increase the size of your family, you’re going to have to make some tradeoffs with other items in your budget,” said Isabel Sawhill, a senior fellow in economic studies at Brookings Institution who authored the study with Brookings’ senior research assistant Morgan Welch.
Housing is the biggest expense for families and accounts for almost a third of the total child-rearing costs. The median home price in July – $403,800 – was up 10.8% from a year ago, marking more than a decade of year-over-year monthly gains. And prices rose across the country, with 80% of US metro areas seeing double-digit home price increases last quarter.
Food is the second most expensive budget item when raising a child, the USDA found, making up 18% of the total cost in its original calculation. Sawhill noted their most recent estimation did not adjust the allocation of costs for different items.
Over the past year, grocery prices rose 13.1%, the largest annual increase since 1979, the Bureau of Labor Statistics found. Almost every grocery staple is more expensive due to inflation – prices for eggs soared 38%, chicken jumped to 17.6% and milk is up 15.6%.
Sawhill said the estimate already had to make a big assumption about what inflation is going to look like in the future. The number is still based on expenses for a child born in 2015, so Brookings had to estimate the inflation rate past the child’s current age of seven.
When it put out its estimates, the USDA had been using an inflation rate of 2% from 2015 onward, but Sawhill assumed 4% in the new estimation by looking at historical trends that arose after the US emerged from the high inflation rate environment of the late 1970s.
“In ’79, the Federal Reserve stepped hard on the brakes to bring down what was at that time, double-digit inflation,” Sawhill said. “And it took at least a decade for those numbers to get back to normal.”
CNN’s Anna Bahney and Danielle Wiener-Bronner contributed to this report