Costs are rising, but Georgia still cheap place to raise kids, study says

ATLANTA – A new 2025 report by LendingTree shows that raising a small child in the U.S. has become significantly more expensive, with families now facing annual costs nearing $30,000 in many states — and even higher in some. Here’s what the numbers reveal about the growing financial burden on parents, especially when it comes to day care, food, and health care.

What we know:

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Annual expenses to raise a small child, not accounting for tax exemptions or credits, now average $29,419 — up sharply from $21,681 in 2023. This jump represents a 35.7% increase in just two years. Over an 18-year span, the cost of raising a child has risen from $237,482 to $297,674 — a 25.3% increase.

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Driving these increases are soaring day care costs, which climbed 51.8% to an average of $17,836 annually. Food and health insurance premiums also contributed to the spike, rising 29.6% and 25.0%, respectively.

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Meanwhile, federal tax credits have become less helpful. After temporarily expanding in 2021, the Child Tax Credit dropped from $3,600 in 2023 to $2,000 this year — a 44.4% reduction in value for families trying to offset expenses.

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By the numbers:

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Here is a look at the numbers nationwide and in Georgia:

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U.S. annual cost to raise a child: $29,419

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Highest annual cost (Hawaii): $36,472

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Lowest annual cost (Mississippi): $16,490

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U.S. average income spent on child expenses: 22.6%

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Georgia’s annual cost: $19,162

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Georgia’s 18-year cost: $201,058

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Georgia’s income percentage spent on child expenses: 15.9%

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Day care in Georgia: $11,066

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Food in Georgia: $1,921

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Health insurance premiums in Georgia: $2,373

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Local perspective:

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While Georgia ranks No. 45 for annual child-rearing expenses and No. 48 over 18 years, costs are still on the rise. The yearly cost now stands at $19,162 — a 14% increase since 2023. Georgia parents spend a lower-than-average portion of their income on these costs — just 15.9% — with only D.C. posting a smaller share.

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In Georgia, infant day care is the biggest single expense, costing $11,066 per year. Other annual costs include $1,921 for food, $612 more in rent, $2,373 in health insurance premiums, and $239 for girls’ apparel. The value of exemption credits in Georgia this year is minimal, subtracting just $165 from total costs.

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Big picture view:

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Four states — Hawaii, North Dakota, Washington, and Maryland — are projected to exceed $300,000 in total child-rearing expenses over 18 years. Hawaii tops the list, where families can expect to spend $362,891 to raise a child, largely driven by steep rent, food, and day care costs. By contrast, Mississippi and D.C. are the only places where total costs remain under $200,000.

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State-level differences reflect a wide gap in affordability. Day care emerges as the largest expense overall and is closely tied to the total cost of raising children. Only six states — all with the lowest annual costs — have infant day care fees under $10,000 per year.

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What’s next:

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As prices continue to climb and tax credits fail to keep pace, families — especially those with lower incomes — may face increasing financial strain. Policymakers could revisit funding for child care support, while parents may need to adjust budgets or reconsider childcare arrangements to manage rising costs.

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GeorgiaFamilyConsumerNews

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