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January 25, 2022

Cost to raise a child reaches all-time high: report

As consumers, we consider inflation to apply to material goods: to a pair of jeans, to auto insurance. Even to a home.

Sometimes, this trend reverses itself. Things like TVs and iPads can actually decrease in retail price as the years go by. Often cars come down in MSRP, too.

But there some things, it appears, that continue on an upward trend no matter what.

And according to a new study out of the U.K., the cost of raising a child has never been greater.

We must get that disclaimer out at the top: this report, from British insurer LV=, crunches figures from the United Kingdom, but perhaps the study acts as a flag bearer for how costs are rising to raise a child in most developed nations.

According to LV=, the cost to raise a child until the age of 21 now comes in at $354,827, an all-time high.

*Bing: Tips to cut back on spending for your children

That's up 58 per from a decade earlier, and if the same ballooning costs increase, the cost to raise a child until 21 could reach $557,193 by 2023, using LV='s calculations.

Inside these figures for today are some of the largest costs for parents: education ($116,169 for a child until 21), daycare and babysitting ($101,470) and clothing ($17,179).

But also LV= gauges things parents might not think about spending, such as holidays for their kid ($25,820 until 21), leisure and recreation ($11,729) and furniture ($5,511).

As a reference point, MoneySense  magazine ran a similar survey last year for Canada using StatsCan numbers. It found that it costs $243,600 to raise a child until the final day of their 18th year in Canada. Broaden that out over 21 years, to match the U.K. study, and we reach just shy of $270,000. In other words, it costs about $85,000 less to raise a child through 21 in Canada than it does the U.K.

Less money, yes, but perhaps an all-time high, nonetheless.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

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The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...