Increasing inflation has made raising a kid more costly than ever; according to recently revealed figures, the average cost now exceeds $300,000.
According to a Brookings Institution estimate given to the Wall Street Journal on Friday, raising a kid born in 2015 until the age of 17 would cost a middle-class couple a total of $310,605 in total.
This amounts to an average annual cost of $18,271 for raising children, and owing to fast increasing inflation, overall expenditures have increased by $26,011 (or more than 9%) from the last estimate two years ago.
In a phone interview with DailyMail.com, Isabel Sawhill, a senior scholar at Brookings who oversaw the study, said that increasing child-rearing expenses would cause some prospective parents to “think twice” about having children.
According to Sawhill, an economist with a PhD, “the choice to have a kid, or another child, is dependent on a number of different considerations, and cost is just one of them, but I do believe the cost of children impacts people’s behaviour.”
She spoke to studies showing Americans having fewer children and stated, “We’ve already seen fertility rate declining, and I believe this will contribute to that.”
‘People need to be reminded they are going to have to pay for those expenditures,’ said Sawhill. ‘It’s not only that the price [of childrearing] has gone up, because of rising inflation.
“People will have to make trade-offs,” she said, “either trade-offs in what they consume, or trade-offs in how much they work.” “People need to really consider what having a kid or another child entails.”
The updated estimate of child-rearing expenditures only accounts for costs up to age 17, not accounting for college fees.
The estimates showed that, at 29 percent of total expenditures, housing would be the biggest parenting expense, followed by food (18 percent), child care and education (16 percent), and transportation (10 percent) (15 percent).
The 2017 projection from the US Department of Agriculture, which predicted parents would spend $233,610 parenting a kid born in 2015, was updated by Brookings to account for inflation.
However, during the last year, inflation has driven up the cost of a variety of commodities, which has put a strain on households.
The US consumer price index increased 8.5 percent over a year earlier in July. That was less than the alarming 9.1 percent annual growth recorded in June, but it was still far above than the Federal Reserve’s goal rate of 2 percent.
This means that low-income and middle-class families have been worst impacted as prices for everything, from haircuts to back-to-school supplies, have cruelly increased quickly.
While gas prices have declined from their recent heights, providing some comfort, food costs have risen even faster; in July, the price of groceries rose 13.1% from the previous year.
Tamera Dixon, a mother of one from Pittsburgh, told the Journal that she is doing all in her power to save money.
Changing mobile contracts, eating less out, assisting a friend, and shopping at your neighbourhood farmers market and grocery store are among other suggestions Dixon made.
“You’ve ran out and exhausted all of it when you’ve done all those things naturally simply to exist.”
Rising housing expenses have been a particular worry for many families as they account for roughly a third of most family budgets.
According to the National Association of Realtors, purchasing a house in the US is now less affordable than it has been in 33 years due to rising mortgage rates this year and record-high property prices.
In June, the typical mortgage payment increased by 33% from the average of $1,297 in January to $1,944.
Due to families being priced out of house ownership, rents have been increasing substantially in several cities.