Washington, D.C. is the most expensive place to raise a family, according to data released by the Economic Policy Institute. (Photo: iStock)
Perhaps surprisingly, New York City is only the fourth most expensive place to raise a family in the U.S.
In some spots in this country, it costs parents well into six figures just to eke by.
The amount that a two-parent, two-child family needs just to pay the bills (but not have money left over for savings) ranges from about $50,000 to more than $100,000 depending on where a family lives, according to data released Wednesday by the nonprofit and nonpartisan think tank the Economic Policy Institute.
“This does not mean a middle-class lifestyle,” says Elise Gould, a senior economist with EPI. “This is just living, no savings.”
The study looked at 618 metro areas and calculated the cost of living in each based on the costs of housing, child care, food, transportation, health care and other necessities (such as school supplies and clothing), as well as taxes.
Perhaps surprisingly, child care is the single most expensive line item for these families: In 500 of the 618 areas that EPI looked at, child care was parents’ biggest annual expense, averaging about $12,500 a year nationwide and climbing above $30,000 a year in one city.
Here are the 10 cities where it is most expensive for two parents to raise two children:
1. Washington, D.C.
A family of four needs $106,493 just to get by in Washington — making this city the most expensive place for parents to raise two children. Child care here is particularly pricey at $31,158 a year on average — the highest in the nation.
2. Nassau-Suffolk, N.Y.
Generations of city dwellers have headed to Long Island to raise their kids, but apparently not to save money. The Nassau–Suffolk County region is the second most expensive place to raise two kids in the U.S., costing families there $103,606. You’ll likely spend a lot on rent (a median of $19,356 a year), as well as on taxes ($16,822) and other necessities ($13,881 on average).
3. Westchester County, N.Y.
Like Long Island, this suburban region outside New York City is notably pricey for families — $99,592 on average. The area shares many of the characteristics of Nassau–Suffolk County, including high taxes ($15,589 a year on average).
4. New York City
The Big Apple takes the No. 4 spot on this list — requiring a family of four to make $98,722 just to get by. The good news: City dwellers get a break (not surprisingly) on transportation costs — at least compared with their suburban neighbors in Westchester and Nassau–Suffolk County.
5. Stamford-Norwalk, Conn.
A family of four in the Stamford-Norwalk area needs $97,350 to pay the bills — and gets hit particularly hard by housing costs ($22,290 a year), other necessities ($15,603) and taxes ($15,487).
You’ll pay — dearly — to live amid the sunshine and sand of Honolulu. It costs a family of four here $94,092 to get by. Food costs ($11,244) are the highest in the country, thanks in large part to extra shipping expense.
7. Poughkeepsie-Newburgh-Middletown, N.Y.
These towns typically aren’t known for ultra-posh living, but due in part to high housing costs (which plague many towns near New York City), these municipalities collectively claim the No. 7 spot on the list. It costs a family of four $92,837 to pay the bills in this area.
8. Ithaca, N.Y.
Living in this charming college town (it’s home to Cornell University and Ithaca College) won’t come cheap — it costs a family of four $92,603 to get by. This high cost is due to high taxes and rents, and may be skewed slightly upward thanks to the costs of child care in New York state (the EPI data used a statewide survey of child-care costs).
9. San Francisco
Despite housing costs that are the highest in the country (a median of $23,472 a year), this city only takes the No. 9 spot, with housing offset partially by child-care costs that are much lower than in much of New York ($10,815).
10. Danbury, Conn.
With high housing and child-care costs, as well as high taxes, it will cost a family of four just over $89,000 to pay the bills in this city.
Catey Hill covers personal finance and travel for MarketWatch in New York. Follow her on Twitter @CateyHill.
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