How To Plan For The Financial Aspects Of Having Kids In Urban Areas

Have you ever walked through a city like New York and wondered how on earth people are able to afford to have kids there? I’ve met a lot of people with kids in major metropolitan cities and the national averages for childcare costs don’t even come close to their actual expenses. This can make planning for the cost of raising a child difficult. This is a discussion of some of the major costs and considerations for having children – starting from conception to kids age 18 in a metropolitan area.

Having A Kid

According to the institute for family studies, women in urban areas experience higher rates of infertility and have children later in life than their rural counterparts. A combination of these two factors increases the likelihood that the prospective parent will need to have fertility help whether IVF treatments, an egg donor, a surrogate, or adopt, which come with significant costs listed below:

  • IVF: Upwards of $34,175 (quality health insurance may cover some of this cost)
  • Egg donor: Upwards of $27,000 (quality health insurance may cover some of this cost)
  • Surrogate: Average of $100,000 (quality health insurance may cover some of this cost)
  • Adoption: $5,000-$40,000 (may qualify for tax credits)

Even without additional financial costs associated with conceiving, many new parents end up surprised by their bills having children the old-fashioned way. The average cost of childbirth in the United States is $18,865 before insurance coverage.

So, if you are considering having a child, make sure you plan according to the method you plan to use. If you plan to use a method other than adoption, it’s important that you assess your health insurance coverage carefully. Some looking at potentially high future medical bills may consider a low-deductible, high tier Preferred Provider Organization. Even if the monthly expenses are significantly higher for the year, it could end up saving you tens of thousands of dollars to plan accordingly.

To help cover unexpected costs, consider setting aside funds in a Health Savings Account (which will allow you to use money tax-free for qualified medical expenses) or bulking your savings up beyond the levels of a traditional emergency reserve.

The Basics

Looking at New York Metropolitan area, the Economic Policy Institute gives some estimates for fixed expenses (excludes discretionary spending) including housing, childcare, food, transportation, health care, other necessities, and taxes:

  • Total monthly fixed costs for two adults: $5,803
  • Total monthly fixed costs for two adults and one child: $8,473
  • Total monthly fixed costs for two adults and two children: $11,245

One child is estimated to add $32,040 per year to annual fixed expenses in this metropolitan area. The Economic Policy Institute has an online calculator you can use for calculating these differences in your own local area.

For some, calculating additional budget for vacations, eating out, and other entertainment items may be necessary.


If you end up purchasing or renting a home in a fantastic public school district, your housing costs would likely increase to more than the Economic Policy Institute’s estimates. Because of this, more and more couples I meet are turning to a combination of a home in a more affordable neighborhood coupled with private schooling. Here are the average nationwide costs for private schooling (2023-2024 school year) according to the Education Data Initiative:

  • Elementary School Average: $10,600
  • Secondary School Average: $22,600
  • K-12 School Average: $11,100

However, these averages can be much higher in urban areas:

  • San Francisco Elementary School Average: $26,399
  • NYC Elementary School Average: $21,271
  • Seattle Elementary School Average: $19,927
  • Miami Elementary School Average: $15,412

If you are living in an area where you feel your child would get the most benefit from private school, here are some things you can do to manage this cost:

  1. Save in a 529: Qualified K-12 expenses up to $10,000 can be used tax-free. Friends and family can also gift into these accounts for birthdays, holidays, etc. Beware of overfunding, serious taxes and penalties can arise if funds are not used from qualified expenses.
  2. Save in a UTMA/UGMA: 100% of funds can be used for expenses on behalf of the child. Taxes apply partially at the child’s level, partially at the parents’ levels depending on the amount of income and gains. Friends and family can also gift into these accounts for birthdays, holidays, etc.
  3. Apply for Scholarships: Many private institutions have scholarship funds, particularly for highly gifted children or lower income families.

Keeping Them Entertained

All the expenses we discussed thus far are the bare bones of getting children into this world, keeping them fed and sheltered, and getting a K-12 education. The thing that’s missing from the equation is fun. Most parents I meet these days have children involved in sports, the arts, and clubs as well. Here are the all-in average costs for various ways of keeping kids entertained:


Having children in urban areas can be expensive. Understanding the potential expenses and making a plan for how to cover them is an incredibly important step toward achieving financial security.

This informational and educational article does not offer or constitute, and should not be relied upon as, tax or financial advice. Your unique needs, goals and circumstances require the individualized attention of your own tax and financial professionals whose advice and services will prevail over any information provided in this article. Equitable Advisors, LLC and its associates and affiliates do not provide tax or legal advice or services. Equitable Advisors, LLC (Equitable Financial Advisors in MI and TN) and its affiliates do not endorse, approve or make any representations as to the accuracy, completeness or appropriateness of any part of any content linked to from this article.

Cicely Jones (CA Insurance Lic. #: 0K81625) offers securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC (Equitable Financial Advisors in MI & TN) and offers annuity and insurance products through Equitable Network, LLC, which conducts business in California as Equitable Network Insurance Agency of California, LLC). Financial Professionals may transact business and/or respond to inquiries only in state(s) in which they are properly qualified. Any compensation that Ms. Jones may receive for the publication of this article is earned separate from, and entirely outside of her capacities with, Equitable Advisors, LLC and Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC). AGE-6067323.1 (11/23)(exp. 11/25)

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