4 unexpected costs of raising a family that can derail your budget if you don’t plan ahead

Raising a family can be one of the most expensive undertakings ever. According to a 2022 report from The Brookings Institution, the average cost to raise a child in a middle-class, two-child family in the United States is $310,605.¹ And with inflation and price increases on everyday items, that number will only continue to grow.

Many parents do try to anticipate and plan for the expected costs that come with raising a family like food and clothing, but other costs can come out of nowhere. If you aren't prepared, they can really blow your budget.

Here are four unexpected expenses you should be aware of if you have a family or are planning on starting one:

1. Accidents and medical care

From bicycle accidents as kids to car accidents when they start driving, children come with the potential for accidents. And that means medical expenses that put a strain on your budget.

Raising a family may include broken bones, tonsil surgery and appendectomies. Kids can result in big medical bills. My parents have often recounted my four years of braces, my journey from glasses to contact lenses and trips to the doctor for bronchitis.

To prepare for medical bills and expenses, think about maximizing a health savings account. For 2024, the IRS allows you to set aside up to $4,150 for individuals and $8,300 for families in an HSA. Contributions are tax-deductible, and when you make them through your employer they are pre-tax, which can reduce your taxable income.

2. Outside child care

School breaks, snow days and three-day weekends will come up on the calendar more often than you might anticipate. When the children are young and can't be left home alone, you will likely have to pay for child care, which can be really expensive especially if you have to do it often. 

Although you can reduce these costs by asking a relative or close friend to babysit, eventually you will probably have to pay for child care. This is a good time to consider opening a Flexible Savings Account to cover dependent care costs. 

3. Extracurricular activities

What if your child shows an interest in football, tennis or the clarinet, and paying for these activities wasn’t in your budget? I had my time with the violin, the clarinet and swimming lessons. I learned to swim, but I haven’t picked up a clarinet or violin in years. 

It’s great to encourage extracurricular activities, but be sure to set clear financial boundaries. Instructors and coaches make numerous demands, not to mention the cost of instruments, uniforms, and everything else associated with the activity. Talk to your child about what your household can afford, especially if you have more than one child. 

4. Educational costs

Even if you don’t pay for private school, your child might need a tutor and summer enrichment programs, or they may want to study abroad for a semester.

Planning for school support and enrichment will set your child up to do well academically and can help if you find your child struggling in school. It's also best to start saving for college as early as possible, using a 529 plan or another savings account.

This article was written by Jennifer Streaks from Business Insider and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.

1. "It’s getting more expensive to raise children. And government isn’t doing much to help." Brookings Institution, August 30, 2022.