Having One Child Adds $22,000 to Annual Expenses, Study Shows

For many families, deciding to have children is one of life’s most joyful milestones—but it also comes with serious financial considerations. While rising childcare costs often grab headlines, a new report from Upgraded Points offers a deeper look at the true cost of raising kids across the country. By factoring in essential expenses beyond childcare, like housing, food, healthcare, transportation, and more, the report sheds light on the financial realities of parenting—and how strategic location choices could help families save.

Raising Kids Isn’t Just Priceless—It’s Pricey

Using data from the Economic Policy Institute (EPI), the report compares the cost of maintaining a modest but adequate standard of living in two-adult households with and without children across all 50 states and major metropolitan areas. The results reveal just how much of a financial commitment parenting truly is.

For a two-adult household without children, the average annual living cost is $55,166. Add one child, and that figure jumps to $77,469—a 40.4% increase or an additional $22,303 annually. For families with two children, the financial strain is even greater: their average annual costs rise to $93,922, a staggering $38,756 more than households without kids—equivalent to a 70.3% increase.

Between mounting inflation, rent costs and more, additional costs for raising children has over a third of Americans either putting off having children or changing their plans to have them altogether.

Location Matters More Than You Might Think

While the financial impact of raising kids is felt nationwide, the cost of raising a child varies widely depending on where families live. Major metropolitan areas like San Francisco and New York City rank among the most expensive places to raise children, with parents in San Francisco spending more than $35,000 annually on one child.

Meanwhile, cities in the South and Midwest offer more budget-friendly options, such as Memphis, where the cost for one child is less than $18,000 per year. These disparities highlight the importance of strategic location decisions, which could help families save thousands of dollars annually. To help parents navigate these differences, here are the top 10 most affordable cities for raising kids, ranked by their relative cost increases:

Top 10 Most Affordable Cities for Families

1. Orlando, FL (31.5% Increase with One Child)
2. Nashville, TN (+32.9%)
3. Atlanta, GA (+32.9%)
4. Charlotte, NC (+33.7%)
5. Birmingham, AL (+34.7%)
6. Raleigh, NC (+34.7%)
7. Salt Lake City, UT (+35.0%)
8. New Orleans, LA (+35.1%)
9. Jacksonville, FL (+35.2%)
10. Tampa, FL (+35.5%)

Parenthood is priceless, but planning ahead for the financial realities can make the journey a little smoother. Explore the full report to see where your city lands and check out these five tips for cutting childcare costs.