As a parent of two myself, I know raising kids can be incredibly rewarding—but let’s be honest, it’s not cheap. Whether you’re a first-time parent or just considering expanding your family, it’s a question that crosses everyone’s mind at some point: How much does it cost to raise a child?

To help answer this big question, I invited my friend Matt Schulz back to the podcast. Matt is the Chief Credit Analyst at LendingTree and the author of Ask Questions, Save Money, Make More. He’s also a dad who’s been through the financial rollercoaster of raising a kid himself. So I figured he’d be the perfect person to help break down the real costs, why those costs are rising, and what parents can do to prepare without panicking.

The Shocking Total: $297,000 to Raise a Child

Let’s start with the headline number because it’s a big one.

“We calculated that over 18 years, it's going to cost an average of almost $300,000 to raise a kid,” Matt shared. “I think the exact number was around $297,000.”

That breaks down to about $29,000 per year. And no, that’s not just in the ultra-expensive parts of the country. That’s the national average, according to LendingTree’s study on the cost of raising a child.

Matt explained that this is more than just inflation doing its thing. “We last did this report in 2023, and it's grown by a little over a third during that time. That’s 25% to 35% growth in just a couple years—and most people aren’t getting raises to match that.”

Where You Live Matters… A Lot

Raising a child in Hawaii? You might need a second job. “Hawaii was the most expensive state in our report—around $360,000 over 18 years,” Matt noted. “That’s no surprise, given the cost of living.”

North Dakota, surprisingly, came in second. Why? It turns out that child care access—or lack thereof—plays a huge role. “In places with daycare deserts, like some sparsely populated states, fewer providers means higher prices.”

On the other end of the spectrum, the South is generally more affordable. “Mississippi had the lowest cost, under $200,000, followed by states like South Carolina,” Matt said.

Still, even in these “cheaper” states, affordability isn’t guaranteed. “Incomes are generally lower in these areas, so even if the headline number is smaller, it doesn’t always feel more affordable for families living there.”

The Biggest Cost? Childcare

Out of all the expenses—from diapers to teen snacks—child care is the top driver.

“Daycare is the biggest chunk,” Matt said. “When we stopped paying for daycare, it felt like getting an enormous raise.”

For most families, daycare costs rival a second mortgage. So if you're planning for your first child, expect this category to eat up a sizable portion of your budget—on average, 23% of a household’s income, according to the LendingTree data.

Other major expenses include:

• Housing (upgrading to a larger space)
• Food and clothing
• Health insurance premiums
• Transportation (hello, minivan)

Want to explore more ways to save on daycare? Check out our post on how parents are saving big on child care.

How to Financially Prepare for a Child

So with a $297,000 price tag staring you down, how do you get started? The good news is—you don’t have to have it all figured out on day one. But you do need a plan.

“It starts with a budget,” Matt said. “You can’t make meaningful progress on paying down debt or building savings without knowing how much is coming in and where it’s going.”

If you’re a dual-income household without kids yet, chances are your spending has been relatively loose. But a baby changes everything. “You’re about to be in a season where priorities shift. You need to get clear on your values and make a plan to match,” Matt advised.

For couples looking to align their spending with their growing family’s needs, we’ve put together a guide on the best budgeting apps for couples.

Small Tweaks That Can Save Thousands

Matt emphasized that you may have more control over these big numbers than you think.

“You tend to have more power over your money than you realize,” he shared. “One of the best things you can do is shop around for daycare. There can be huge price differences.”

Of course, quality and safety matter—but cost is still an important factor. Another strategy? Google is your friend. “Just search ‘financial help for parents near me.’ You’d be surprised how many local groups and programs are out there,” Matt said.

And if you’re carrying credit card debt, that’s a great place to start slashing expenses. “Lowering your APR can save you big. Our research showed that 83% of people who asked for a lower interest rate on their card got one,” he explained.

That extra cash flow could be the difference between affording a quality daycare or feeling stretched thin.

Align Your Spending with Your Family Goals

The cost of raising a child is high—there’s no denying that. But when you approach it with a clear budget, aligned values, and a plan, it becomes a challenge you can manage rather than one to fear.

If you're ready to take control of your finances and make room for the things that matter most—like raising your kids in a financially secure home—I highly recommend checking out Monarch Money. It’s the powerful budgeting tool that my wife and I use to track our expenses, plan for the future, and stay aligned with our goals as our family grows.

What do you think? Is parenting worth it?

Please let us know in the comments below.