Raising a family has always come with additional costs, but in 2025, it\u2019s become a whole lot more expensive.<\/p>\n
Take the Millers, for example. This couple in Boulder, Colorado earns a combined annual income of $220,000, which had provided them with a comfortable lifestyle \u2014 until they had kids. They have a mortgage, two cars and student loan debt to pay off. But now, with a toddler and a five-year-old, the Millers are feeling financially stretched.<\/p>\n<\/p>\n
On top of that, it seems every time they go to the grocery store, prices keep getting higher. Everything else seems to be going up, too, from home insurance rates to the cost of child care. Raising a family in America just seems to be more expensive than it used to be.<\/p>\n
The data, meanwhile, suggests that the Miller’s suspicions are indeed true: the cost of raising a family in 2025 is getting higher.<\/p>\n
A 2025 study from SmartAsset \u2014 which used the latest data from the MIT Living Wage Calculator \u2014 shows just how much Americans are struggling in today\u2019s economy.<\/p>\n
\u201cAn individual in any given U.S. state needs about $5,844 more earnings<\/a> than last year to have a comfortable, sustainable budget, while working families of four need an additional $9,360,\u201d according to the study.<\/p>\n Living \u201ccomfortably\u201d means making enough money for necessities \u2014 along with things like long-term savings, education funds, entertainment, hobbies and vacations. In Colorado, the income required for a four-person family to live comfortably in 2025 is $273,728. By comparison, a single adult would need $105,955.<\/p>\n At the same time, the national median annual income is $58,500<\/a> for those between the ages of 25 to 34, and $69,264 for those 35 to 44, according to data compiled by Forbes Advisor. However, this varies by state, gender, age and educational level.<\/p>\n In Colorado, the average median annual income for a family of four is $146,972<\/a>, according to Census Bureau data from April 1 to May 14, 2025. With this in mind, the Millers are doing well, in comparison to the average American family.<\/p>\n Yet, it\u2019s not quite enough to live comfortably, as they don\u2019t meet SmartAsset\u2019s recommended $273,728 annual earnings for Colorado families.<\/p>\n Story continues <\/p>\n Here\u2019s why the Millers are struggling.<\/p>\n Read more: Rich, young Americans are ditching stocks \u2014 here are the alternative assets they’re banking on instead<\/a><\/strong><\/p>\n In Boulder, the Millers pay $4,600 a month on their mortgage. While it\u2019s a lot of money, it\u2019s still slightly less than the average monthly mortgage payment in their county.<\/p>\n The average median home price in Boulder County as of Q1 2025 was $828,810, with an average monthly mortgage payment of $4,880<\/a> (assuming a 20% down payment), according to data from the National Association of Realtors. That\u2019s up slightly from $4,730 during the same period in 2024.<\/p>\n The 30% rule states that homeowners should delegate no more than 30% of their monthly household income to housing, which includes mortgage payments, insurance and utilities. If a homeowner is spending more than 30%, they could end up being \u201chouse poor.\u201d<\/p>\n Since the Millers bring in about $18,300 a month and their mortgage payment is $4,600, they\u2019re spending about 25% of their monthly income on their mortgage. That leaves about 5% \u2014 or roughly $900 \u2014 for home insurance and utilities, which means the Millers are following the 30% rule quite well.<\/p>\n However, they\u2019re increasingly pressed in other areas.<\/p>\n A recent study found that the annual costs of raising a child in 2025 is $29,419<\/a> \u2014 that\u2019s up a whopping 35.7% since the study was last conducted in 2023. Those costs include everything from child care to food, clothing and transportation.<\/p>\n However, this varies by state; Hawaii has the highest annual costs of raising a child, followed by Massachusetts and Washington \u2014 while Mississippi, South Carolina and Alabama have the lowest annual costs.<\/p>\n \u201cFamilies spend an average of 22.6% of their income on the basic annual expenses associated with raising a small child,\u201d according to the study. \u201cThat\u2019s up from 19% in our 2023 study.\u201d<\/p>\n In Colorado, the average annual cost for an infant or toddler in family child care is $13,666 per year. Costs are even higher in center-based child care: $20,978 per year for an infant and $17,479 per year for a toddler, according to data from Child Care Aware of America.<\/p>\n And that doesn\u2019t even take into account saving for a child\u2019s future education.<\/p>\n The price of groceries is going up, and the impact of President Trump\u2019s tariffs could bump those prices even higher. Other factors are at play, too: avian flu, for example, drove egg prices through the roof earlier this year.<\/p>\n Over the past year, grocery prices have increased 2.2%<\/a>, according to May 2025 data from the U.S. Bureau of Labor Statistics.<\/p>\n But a report from Yale\u2019s Budget Lab, a nonpartisan economic research group, found that U.S. tariffs on imports from trading partners like China, Canada and Mexico will raise prices on everything from clothing to machinery to natural gas. And groceries are no exception, with produce jumping 5.4%<\/a> in the short run and food products increasing 4.3%.<\/p>\n Overall, Americans are reproducing less these days, and one of the reasons is related to the high costs of raising a family.<\/p>\n To maintain a stable population, each woman in America would need to have 2.1 kids on average. In 2024, the U.S. reached an all-time low, with fewer than 1.6 children<\/a> being born per woman.<\/p>\n A 2024 Pew Research Center poll found that 51% of young adults<\/a> between the ages of 18 to 34 say they\u2019d like to have kids one day, while three in 10 aren\u2019t sure and another 18% say they don\u2019t want children.<\/p>\n Meanwhile, 23% of Millennials and those in Gen Z who don\u2019t have children say they don\u2019t plan on becoming parents, mainly because of financial reasons<\/a>, according to a 2024 survey from MassMutual.<\/p>\n \u201cA preference for financial freedom and the inability to afford children are equally cited by 43% of younger generations,\u201d according to the study.<\/p>\n It seems not every young couple wants to find themselves in a position like the Millers \u2014 making well above the national median annual income, yet still struggling to pay the bills.<\/p>\n