Parents today face challenges that would seem foreign to their parents, their grandparents, and most certainly their great-grandparents.
Chief among them: the cost of parenting.
It’s not just about the escalation in the cost-of-living, as that can be a tricky matter to judge from one generation to the next given the factor of inflation and ill-defined generational cutoffs.
It’s really that the world of the 21st-century parent has grown exponentially more complicated, by technology, politics, globalization, social media, and changing social norms.
Today's parents must navigate a more significant set of decisions, with greater consequences should things go the wrong way.
Yet the evidence is clear:
The cost of parenting, measured in housing, healthcare, and sheer buying power, has gone through the roof and is showing no signs of slowing down. We've pulled together the data to prove it.
Do today’s parents have it harder in the pocketbook? Well, given that the estimates currently are that it will take more than $200,000 (1) to raise a child to 18, the answer is obvious.
That's especially true when factoring in stagnant incomes, eroding job security, and the end of corporate pensions.
In other ways, the answer might be no, as it depends on your baseline and your perspective. One thing's for sure, though: The tradeoffs involved in the cost of parenting will shape our society for generations to come.
The Cost of Birth to Adulthood
Clothing. Childcare. Education. Housing. Food, Transportation. It adds up quickly throughout a child's life. The U.S. Department of Agriculture (2) calculates just how much every decade and the numbers are quite staggering.
The current cost of raising a child to the point of legal adulthood is approaching $217,000, though some estimates put it even higher, depending on your baseline.
Let that sink in for a second. That’s before you write your first tuition check.
A half-century prior, the USDA put the figure at $25,299 – roughly 9 times less.
When you factor inflation into the equation, though, the numbers look a little less shocking. That $25,299 in 1960 equates to about $214,000 in 2018 dollars.
Yet somehow, we're pretty confident that most parents might not find that terribly comforting.
Some social scientists surmise that the escalating total cost of parenting may well be one of the reasons why adults are choosing to have fewer kids today.
If anybody has the right to complain, it would be anyone who decided to become a parent in 1980. The absolute cost of parenting a child to 18 more than doubled in the 1970s -- not surprising, as that decade was marked by runaway inflation. Notably, median incomes were higher in 1980 when adjusted for inflation.
Parents face no more fundamental a challenge than providing housing for their children. And the cost of doing so has gone through the roof according to the numbers. Monthly rent is up almost 10 times over, on average, between 1960 and 2018.
In terms of rent, accelerating costs are reaching some surprising places. According to RentCafe, in 2018 there were double-digit increases reported in Odessa and Midland, Texas, and Reno, Nevada -- smaller, more remote towns. That's not a good sign for the rental market overall.
The most substantial part of the acceleration in housing costs seems to have taken place between 1970 and 1990, with rent and mortgages that nearly tripled during that period.
Managing Housing Costs
Monthly mortgage payments expanded almost 9 times over from 1960 to 2018.
Interestingly, the average mortgage payment only topped the $1,000 level in the last 10 years or so. The current average monthly mortgage payment of $1,029 represents 15% of a typical (3) homeowner's budget.
Today’s parents, though, are dealing with a different lending environment entirely, in part due to the practices that led to the Great Recession of 2008.
Banks have returned to emphasizing the need for borrowers to put money down before beginning their homeownership journeys. With the cost of everything going up, saving for the down payment is a challenge.
The housing market has changed, as well. The advent of the sharing economy and companies such as Airbnb have had an impact on the costs and availability of decent housing, according to several studies (4).
Healthcare PRemiums: the Rising Cost for healthy families
So much has been written and said over the past decade about the cost of healthcare in America. That’s by virtue of the 2010 Affordable Care Act, the most extensive reform of healthcare in many decades.
It’s easy to see why the need for reform was real. The monthly healthcare premium for families has surged more than 750% in the last 5 decades to nearly $1,200 (5).
The ACA, known in popular terms as Obamacare, has helped slow the rate of increase some, but most experts continue to cite healthcare costs as one of our biggest economic challenges.
They are certainly a significant factor in the rising cost of parenting.
Amid those factors and the politicization of the topic, today's parents face concerns that prior generations probably couldn't have imagined. People are living longer, meaning that parents must tend to not only their children's' health, and their health, but often their parents, too.
The system itself is showing some cracks. Historically, most people in the United States receive health care coverage via their employers (6), but the rising cost of healthcare is impacting even those markets, outpacing (7) inflation.
It all adds up to a very challenging cost environment, with parents bearing a more complicated set of decisions than ever before in family healthcare.
Cost of raising a child per week
Changing societal norms and increasing costs of living have turned many families into two-income households. According to the Bureau of Labor Statistics (8), nearly half of all mothers provided full-time childcare in late 1967. But in recent years, the share of stay-at-home parenting fell to as low as 15% (including moms and dads).
That may have something to do with the growth in costs of childcare. The weekly cost of taking care of children was only about $23 in 1960, and by 2018, it had grown almost 800%, to $204 per week. It’s not the biggest component in the cost of parenting, but it’s getting there.
The most significant increase during this period was once again during the 1970s. The rate of growth has slowed over the past 20 years, but the trend is still on the rise.
How that number will fare in the future may depend mainly on the state of the economy. As the cost of living increases, so too will pressure on parents to make ends meet, potentially forcing more and more families to become dual breadwinners.
And with that comes a whole different set of worries they didn’t know about back in the days of Ozzie and Harriet.
The cost of a natural birth
Don’t fool yourself into thinking that the cost of parenting will hit your finances only when your child gets older. The expense of giving birth is another significant factor in the inflating expense of raising your child to the age of maturity.
And that's true no matter whether you have a natural childbirth or one that requires surgical intervention. Remember, too, that we're talking about the total cost of prenatal care -- not just the delivery.
Vaginal childbirth was $8,000 in 2018 -- up by 760% since 1960. Costs for both vaginal birth and C-section have doubled since 1990, another sign of the challenges we face in controlling healthcare costs.
Delivery cost of a cesarean (c-Section)
The average cost of delivering a baby (9) by C-section hit $11,000 in 2018.
Interestingly, according to Fair Health, whose study was quoted by Smart Asset, the costs can vary dramatically state by state. Alaska seems to have the highest delivery costs, and Alabama the lowest.
Do today’s parents have it tougher than previous generations? Certainly not in the nature of childbirth, which remains physically challenging no matter what era we’re discussing. But given advances in medical technology, which has helped reduce childhood mortality rates, we say that our parents and their parents had it harder on this one.
GENERATIONAL Divide in Earning Potential and responsibility
Rising costs alone don’t tell the whole story. As we have heard repeatedly from elected officials over the past decade, the United States has been struggling with income growth. That, too, has much to bear on the question of the cost of parenting.
Look at the numbers, though, and generationally they seem a little confounding. Baby boomers, now between the ages of 52 and 70, should have the highest family income given longevity in jobs.
Generation X makes, on average, about 10% more for a 3-person household than the boomers. The difference could be because many Boomers are already in retirement years.
Millennials trail, but not by as much as you might think. Three-person millennial households make about 20% less than Generation X but only about 10% less than the boomers. According to Pew Research (10), Millennials ages 22 to 37 currently make more than this particular age group has in more than 50 years.
Interestingly, though, baby boomers control the lion’s share of disposable income (11) -- about 70% -- making this generation a potent force as companies seek to understand their markets. It could be the main reason why we still see baby boomer influencers at significant moments in our national consciousness, such as halftime acts at the Super Bowl.
Today’s parents, however, are facing more uncertainty than ever from a changing economy. Fears over job displacement from automation and offshoring have never been higher. The cost of parenting gets tough when you’re out of work.
goods vs. wages: the difference in cost
Those wage figures may look good on paper. Parents both then and now have done commendable jobs in making ends meet with the resources they have.
But when looked at in the aggregate, the problems become apparent. Wages for today's parents have increased only about 67% in the past 5 decades. That pales in comparison to the triple-digit increases we've already discussed in childcare, housing, healthcare, and more.
According to Pew Research, today’s wage earners (12) have about the same buying power as they did back in the early 1980s. That makes for bigger gaps in covering the cost of parenting in the modern world.
The flattened incomes are part of the reason why legislation has become fashionable across the United States to make significant increases in the minimum wage.
All that said, it’s not all bad news for today’s parents. While many consumer goods are more expensive today than five decades ago, items such as home electronics, food, and clothing are more affordable.
Still, when you factor in housing and healthcare, it's clear the cost of parenting remains an enormous challenge for most families.
Overview of parenting costs
The use of averages both for current expenses and historical dollars can only go so far. Personal choice matters, too. Today’s parents have more choices than their parents and grandparents -- especially about where and how to live.
Your geography and your standard of living will make a big difference in the cost of parenting. Unsurprisingly, it's priciest to raise a child in urban areas in the northeast, where there may be higher taxes as well as higher costs of housing and transportation.
Choose to live in rural areas or small towns, and you can save a significant amount. According to one estimate, your costs will be lower by about 36%. That being said, it's not always easy to relocate -- and jobs in rural areas typically pay less, as well.
Significant differences appear at various income levels. A typical lower-income family will spend an average of $175,000 on raising a child to 18. That's less than half of what a typical family with higher incomes will spend.
Add It Up
The cost of parenting is steep (13), without a doubt.
If you make the decision solely based on cost, though, you’ll be missing out. Parenting is one of the most joyful experiences in life, offering moments that are worth a fortune.
Prepare, yes. But don’t let the cost of parenting stop you from bringing the next generation along to shape our world. Easier or harder, you’ll make it through.