The cost of raising a young child these days can exceed $40,000 in pretax income annually, depending on where families live, according to recent research by SmartAsset.
Many families find ways to mitigate some of the higher costs associated with parenthood, the site reported recently. They may consider which parent is going to work or, if both parents are in the workforce, whether young children will require paid daycare services.
Parents may try to figure out the minimum income they need to keep the family afloat if one parent works and the other one stays home to raise a young child. By doing this, they will forego major child care costs, but also additional income. The minimum income needed to make this work varies widely across the country, SmartAsset found.
To be sure, the decision to have one partner be a stay-at-home parent while the other works is not a purely financial one.
"The opportunity costs of leaving the workforce are much more significant than what appears on your paystub," Heather Boneparth, director of business and legal affairs at Bone Fide Wealth, wrote in a Substack post in January. "There’s a lot at stake. Parents, especially women, who pause their careers will feel the impact in their future earning potential, promotions, and retirement savings. You may feel it in your self-worth. You may feel it in your marriage."
But running the numbers is an important part of making this decision.
Researchers used MIT Living Wage Calculator data as of February 2025 to compare the aggregate annual living wage of a household with two working adults and one child to that of one working adult, one stay-at-home parent and one child. Costs include additions for food, housing, child care, health care, transportation, incremental income taxes and other necessities.
They found that a single earner in a three-person family in the most expensive state needs to earn at least $102,000 a year, while in the least expensive ones, the minimum threshold is in the high $60,000s and low $70,000s.
See the gallery for the 12 states with the highest income needed to keep one parent at home, according to SmartAsset.
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