Average American family will spend over $300,000 to raise a child born in 2015: Study

Yahoo Finance Live anchors Dave Briggs and Seana Smith discuss a new study from Brookings that found it will cost more than $300,000 to raise a child born in 2015.

Video transcript

DAVE BRIGGS: Seana, I want to talk more a little bit about this number because when I first saw it, it certainly was, to your point, eye-popping. But then I really ran the math on it, and I thought, that is actually very low, at least for a parent that has two teenagers. And in particular, I think it's interesting to look at where the costs have gone up the most.

Now, Brookings did not do that data in this research. But as a parent of two teenagers, I can tell you where it's improved-- or increased the most. In terms of special education, parents going above and beyond for ACT, SAT training, college preparatory things, and sports is the huge number in terms of-- you're talking about thousands of dollars for certain clubs, travel teams. I know friends that spend north of $10,000 a year on one particular sport, notably baseball and hockey, traveling around the country. I think this number is actually way low, and it's also, of course, before you double it with the cost of college, which is probably around $250 to $300 as well.

SEANA SMITH: I was going to say, Dave, the only silver lining here is your kids are a little bit older than mine, so at least you'll probably--

DAVE BRIGGS: A lot.

SEANA SMITH: --be saving some money on college. It's probably going to be even more expensive once my kids get to that age. But it is important to point out here, and also just over the last six months, the cost of raising a child has dramatically gone up when you take into account inflation and what parents are paying just to provide food for their children and the basic necessities.

So I think it just highlights the fact that whether or not it's a conservative estimate or whether or not you're in a part of the country where you're saying there's no way I'm going to spend $300,000 on my child before they're 17, it's just the importance of making sure you do have that cash cushion and you do have enough savings built up for emergencies. Because, like, study after study has shown the average American family basically has nothing to spend on an emergency cost. So if you're looking at a $300,000 potential price tag here for your child until they're 17, it definitely makes you think twice, maybe, before spending it on something that you don't necessarily need.

DAVE BRIGGS: Yeah, I think the last study showed more than 50% of the country did not have enough to cover a $10,000 emergency. When you look back at economies over the last couple of decades, you do see births flattening out or shrinking. You can't help but wonder if we'll see one right now because of inflation.