If you’re considering having a child in 2025, be sure to weigh what you value financially first. As prices rise, kids get more expensive — and even as inflation cools, it means only that prices are rising by less.
J.P. Morgan: 3 Reasons the US Dollar Is Losing Value — and Why It Might Be Good for Your Wallet
Read Next: The New Retirement Problem Boomers Are Facing
Here’s how inflation impacts the cost of raising a child in 2025.
Raising Kids Wasn’t Cheap Even When Inflation Was Low
One of the most definitive analyses on the long-term cost of raising a child came from a USDA report released in 2017. It projected that a child born in 2015 would cost $233,610 to raise through age 17 in 2027.
However, further data from the Federal Reserve Bank of St. Louis showed the 2010s were a period of sustained, historically low inflation where the rate stayed under 3% annually for nearly the entire decade. In the post-pandemic era, inflation soared, peaking at 40-year highs — and $233,610 doesn’t go as far as it did 10 years ago.
Check Out: 8 Smart Ways Frugal People Are Living Like There’s Already a Recession
High-Inflation Periods Might Provide a Better Roadmap
In 2022, at the height of the post-pandemic inflationary period (and seven years after the start of the USDA study’s projection), the Brookings Institution recalculated using similar criteria — food, housing, energy, etc. — but revised its methodology according to the realities of the time.
It based its projections on the 17 years between 1980 and 1997, a period of historically elevated sustained inflation rates, and found the cost of raising a child born in 2022 through age 17 in 2037 would be $310,605.
The Average Child Born in 2025 Will Cost $20K Per Year To Raise
According to the Bureau of Labor Statistics (BLS) inflation calculator, based on the official Consumer Price Index, a parent in 2025 would need $322,427.12 to match the buying power of $233,610 in 2015.
However, the $310,605 from the 2022 Brookings study would be $356,357 in 2025 money. The average of the two numbers — one from a period of low inflation and the other from a period of high inflation — is $339,392 for basic expenses alone. Divided by 17 years, that’s roughly $20,000 per year, per child, excluding higher education and the cost of helping them transition to adulthood (compared to $13,741 per year for a child born in 2015).
More From GOBankingRates
- 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025
- Proven Ways Small Business Owners Are Protecting What They've Built
- 3 Reasons Retired Boomers Shouldn't Give Their Kids a Living Inheritance (And 2 Reasons They Should)
- 7 Luxury SUVs That Will Become Affordable in 2025
This article originally appeared on GOBankingRates.com: How Inflation Affects the Cost of Raising a Child in 2025
