If raising kids feels more expensive lately, it’s not your imagination. A new study shows the cost of raising a child under age five has climbed faster than inflation — and in some states, families are paying tens of thousands more per year than others.
In other words: it’s not just the grocery bill. Or daycare. Or the fact that your kid somehow needs new shoes again.
According to the study from SmartAsset™, the average annual cost of raising a child under age five in the U.S. is now $27,743. That’s a 4.5% jump from last year — and yes, it’s outpacing inflation. No wonder so many parents feel like they’re constantly playing budget whack-a-mole.
And here’s the part that really gets parents talking: where you live makes a huge difference.
Depending on your state, raising a young child can cost tens of thousands of dollars more (or less) each year. Childcare, housing, healthcare, and transportation all play a role — and the gap between states is wider than ever.
How Much Does it Really Cost to Raise a Child Now?
For this study, SmartAsset looked at how much extra income two working parents need to raise a child under five, compared to a household with no kids.
They used data from the MIT Living Wage Calculator and factored in all the things parents actually pay for:
- Housing
- Food
- Childcare
- Healthcare
- Transportation
- Other everyday necessities
Translation? This isn’t luxury spending. This is real-life parenting math.
How the study was done: SmartAsset analyzed data from the MIT Living Wage Calculator, comparing costs from February 2024 to February 2025. The study was released in November 2025.
The Most Expensive States to Raise a Child
Some states saw especially big jumps this year — the kind that make you double-check your paycheck.
The 5 Most Expensive States To Raise a Child
- Massachusetts – $44,221
- Connecticut – $41,808
- Vermont – $38,272
- California – $35,651
- New Jersey – $35,069
Massachusetts now takes the top spot, with families needing to earn nearly $125,000 combined just to support two adults and one preschooler. Vermont had the biggest shocker, jumping more than 25% in just one year.
That’s a lot of snack money.
The Least Expensive States to Raise a Child
Looking for a little financial breathing room? A few states still come in on the lower end — even though costs are rising almost everywhere.
The 5 Least Expensive States to Raise a Child
- Mississippi – $19,178
- Alabama – $20,550
- Kentucky – $20,758
- South Dakota – $21,174
- Georgia – $21,299
Mississippi remains the only state under $20,000 a year, even after a nearly 10% increase. Compared to Massachusetts, that’s a difference big enough to make parents do a Zillow search.
Want to see exactly where your state falls? Here’s the full state-by-state breakdown.
The Plot Twist: States Where Costs Went Down
Here’s something we don’t see often: in 10 states, the cost of raising a child actually dropped this year.
Some of the biggest decreases:
- Hawaii – down $8,116
- Delaware – down $4,792
- Iowa – down $3,667
- Michigan – down $2,772
- New York – down $1,551
While that’s welcome news, many of these states are still on the pricier side overall. But hey — we’ll take the win where we can get it.
Why the Numbers Vary So Much
If you’re wondering why the costs swing so wildly from state to state, it comes down to a few big factors:
- Childcare availability and pricing
- Housing costs
- Healthcare expenses
- Transportation needs
- How local wages line up with the cost of living
Even small increases in childcare or rent can quietly add thousands of dollars per year to a family’s budget — often before parents even notice where it went.
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What This Means for Families
For parents of young kids — or anyone thinking about adding another little human to the mix — this study confirms what many of us already feel:
Raising kids is getting more expensive — and location plays a huge role in how manageable it feels.
Whether you’re budgeting tighter, rethinking childcare options, or just trying to make peace with the numbers, understanding how costs compare state by state can help parents make more informed choices — or at least feel less alone in the sticker shock.
