It would be impossible to list all the costs associated with raising children. As a parent, you’ll spend on a wide variety of goods and services, starting the day they’re born and potentially lasting into their adulthood. Keeping them safe and well cared for can be shockingly expensive.
A 2023 Northwestern Mutual study analyzed USDA data and inflation statistics from the U.S. Bureau of Labor Statistics to determine that raising a child in 2023 could cost an average of $331,933 from the time a child is born to age 18.
What Are Unexpected Child Costs?
As a parent you may anticipate and can likely manage many basic expenditures such as clothes and food, but other costs can be far more expensive — and come out of the blue. When they do, they can blow your carefully constructed budget out of the water.
The following scenarios might not occur in your family’s future but they’re worth planning for. If they do, here’s what you need to consider — and how you can keep them from throwing your finances out of whack.
Academic Help
Your child has suddenly fallen behind in school and is now having trouble keeping up. When that happens, you may want to sign them up for summer school classes or tutoring.
Before readjusting your budget, find out if you can get help for free through the school’s individualized education plans.
“Planning for beyond-school support, whether to fill in gaps or enrichment, is a key element of academic planning,” says Rebecca Mannis, Ph.D., a learning specialist and founder of New York City-based Ivy Prep.
“Here, ‘less is more’ may not be realistic,” she says.
If you don’t have free options available, get get recommendations from friends and teachers, Mannis says.
Make sure to spend time understanding a learning specialist’s approach and methods. According to Tutors.com, you can expect to pay somewhere between $25 and $80 an hour for tutoring, so you need to ensure it matches your child’s needs.
If the cost of tutoring or summer school will be coming out of your own pocket and your child has diagnosed learning challenges, you may be able to deduct the costs from your taxes.
[Read: Tax Write-Offs You Shouldn’t Overlook.]
Sports and Talent
Your child is fascinated with football, figure skating or the flute — and paying for these activities wasn’t in your financial playbook.
It’s great to encourage extracurricular activities, but set clear boundaries. Coaches and instructors make many demands, so it’s important you to talk to your child about your personal parameters.
“Be realistic with your child and help them prioritize,” Mannis says. “Not only will this help create realistic financial expectations, it also helps kids problem solve how to pace things.”
If your child is older and is truly committed to a sport or extracurricular, but paying for everything is a financial burden for you, have a conversation about ways you can make it happen with their contributions.
“This might motivate your kid to earn some extra money for what he wants,” Mannis says. Perhaps they can take on a job like babysitting or lawn mowing to earn money for the new football gear they need.
Accidents and Medical Needs
From skateboarding spills to sports injuries, accidents can put your child in the hospital — and you in debt.
Kids often take risks that can result in broken bones and big medical bills, so if you know your child is especially active or adventurous, it’s time to strategize.
Rick Nott, a certified financial planner and managing director at Angeles Wealth Management in Santa Monica, California, says a good first step is to consider modifying your health insurance plan.
If you have a high-deductible health plan (HDHP), the premiums are low, but you can be on the hook for a big portion of the bill in the event of an accident. A preferred provider organization plan (PPO) may be more prudent for active kids, since the deductible and out-of-pocket costs will be lower.
If you have an HDHP and don’t want to change it, try maximizing a health savings account (HSA). For 2024, the IRS allows you to contribute up to $8,300 to a family HSA when you have HDHP coverage. Contributions are tax deductible, which reduces your taxable income, and distributions are tax free when spent on qualifying medical expenses.
[Read: How to Choose a Health Savings Account.]
When accidents do happen, make sure you review the bills and prepare to fight unnecessary or elevated costs.
“My son was unexpectedly born at home and we found out the hard way,” Nott says.
“They tried to charge us for an in-hospital birth. Unlike most everything else you buy, you don’t know the price in advance. Even if they take insurance, it may not be fully covered.
Get in the habit of looking at the paperwork and asking questions before you sign. Aspirin in the hospital can be $30 a pill, and that can be disputed. They will often negotiate with you after the fact, too, so call and start talking,” he says.
Trips and Activities
Your child has a friend from a well-off family who invited them on their annual ski trip. It’s a lovely offer but it means you’re expected to cover everything from airfare to lift tickets.
If you don’t have the money to spare, don’t feel obligated. This situation will come up again, so get used to saying no. Everybody’s financial picture is different and it’s not your responsibility to keep up with the Joneses.
“A big theme in my practice is values over money,” Nott says.
“Take these opportunities to teach your children. Explain that they can do things with their friends at the beach or have a picnic instead. Or, have your child contribute to the event if they really want to go. And if it’s not possible, that’s OK. It’s not the end of the world,” he adds.
Your child probably won’t see it that way at the time, so Nott recommends preempting the agony. Speak about money early and often with your child, and do your best to explain income, expenses and the perils of debt.
[READ: Ways to Teach Kids About Money.]
Extra Child Care
Like many parents who have to work all year, you may have already started to prepare for summer costs like overnight and day camps.
School breaks, teacher retreat days and long weekends, however, can appear on the calendar more often than you expect. When the children are young and can’t be home alone you will likely have to pay for child care.
According to UrbanSitter, typical rates for a babysitter in 2024 range from $16 to $26 per hour.
Although you can keep these costs down by asking a relative or trusted friend to pitch in, at some point you will probably have to pay. This is a good time to consider opening a slush fund for these types of unexpected expenses.
“In terms of budgeting, whatever you think your expenses will be, increase them by 20%,” Nott says. “Add it to a savings or money market account. Or, open a Roth IRA. After five years you can take your initial contribution out for those types of things without paying penalties and taxes.”
Mental Health Care
Many children struggle psychologically, and you may be identifying signs in your own. A 2023 Pew Research Center report found that mental health was the greatest concern among today’s parents.
Your child may require assistance from a professional therapist, yet counseling can be extremely expensive. Even when an insurance plan covers these sessions, not all therapists accept it.
A single session with a therapist can run between $100 and $250 per session, according to data gathered by Thervo, which can be overwhelming for families with little room in their budget.
Instead of forgoing this important care, look for a therapist who accepts sliding scale payments. And research online therapists because they tend to have lower rates than those who have to pay for office costs.
This is where an HSA can be a godsend, Nott says. The cash in that account can be used to cover counseling sessions.
Substance Addiction Treatment
According to the National Institutes of Health 2023 report, 10.9% of eighth graders, 19.8% of 10th graders, and 31.2% of 12th graders reported illicit drug use in the past year. Currently, 22 teenagers die of overdoses each week. The problem is real — and devastating.
While the Affordable Care Act requires all health insurance providers to cover drug and alcohol rehab services, your insurance plan may not provide enough coverage for what your child needs.
For example, it may cover only 30 days at a residential treatment center, which might be insufficient. That means you’ll be picking up the rest of the cost. The National Center for Drug Abuse Statistics reports that the average cost of drug rehabilitation is $13,475, an insurmountable sum for many families.
State, city and county governments — as well as some nonprofit organizations like the Salvation Army — offer free inpatient and outpatient treatment. Visit the Substance Abuse and Mental Health Services Administration directory of state agencies for more information.
You Can’t Prepare for Every Child Cost
In the end, it’s important to recognize that there’s only so much you can do to prepare for high expenses related to children. Just do your best to project and plan. That way, if you do have to cover one or a few of them you won’t be caught completely off guard.
More from U.S. News
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Kids and Taxes: 6 Tax Credits Parents Should Know About
How Much Does It Cost to Raise a Child?
Extreme, Unexpected Kid Costs: How to Plan for the Unplanned originally appeared on usnews.com
Update 04/22/24: This story was published at an earlier date and has been updated with new information.
