By Elyssa Kirkham GOBankingRates.com.
Household finances are tricky for everyone, and the number-crunching is especially hard for families. But location also has a huge effect on families' costs and ability to meet them. A study from the Economic Policy Institute, for instance, found that the average costs of a two-parent, two-child family could vary by as much as $57,000 each year from the cheapest community it surveyed (Morristown, Tenn.) to the most expensive (Washington, D.C.).
While child-rearing costs vary greatly by city, there are also significant differences from state to state. Some states offer higher incomes, whereas others keep key costs like food, housing and child care low. Some of the best states for families offer paid family leave, a crucial benefit that can help families fill the financial gaps in times of need.
GOBankingRates looked at all of these factors to rank the states and determine which ones make raising a family financially feasible. Here are the five cheapest states to raise a family, where households face the lowest costs while earning higher incomes.
IDAHO Although Idaho's median income of $49,952 is behind the national median, this lower income is offset by the state's low cost of living. Idaho has the third-lowest food costs in the nation, paying 10.4 percent less than the national average. The state also offers affordable housing, with a median monthly rent of $1,100 and a median house listing price of $189,990.
The Gem State's low costs extend to child care, which are the 10th-lowest rates in the nation. Full-time care is $6,483 a year for an infant and $6,380 for a 4-year-old, just $530 to $540 a month on average. Idaho has no parental leave laws, but the Idaho State Board of Education is currently working on a $9.8 million program to extend full-day kindergarten to children who are showing signs of reading difficulties.
VIRGINIA Virginia families have bigger budgets to work with thanks to having the fourth-highest median income in the nation. At $65,635 a year, a family earning the Virginia median income would take home $1,132 more per month than a family earning the national median.
Virginia residents pay more for housing than most Americans, but these costs aren't disproportionate to the state's median income. A family paying the median monthly rent of $1,504 and taking home the median income, for instance, would pay 27.5 percent of their earnings for housing. Households in Virginia also enjoy food costs that are 7.2 percent lower than the national average and child care costs that are only moderately higher than the national median.
Virginia has no parental leave policies, but nearby District of Columbia introduced new legislation in 2015 to provide its residents with up to 16 weeks of paid family leave in a year, the most generous family leave policy in the nation. If it passes, Virginia residents who work in the capital would also be eligible for these benefits, according to The Washington Post.
CALIFORNIA California currently offers the most generous family leave benefits of any state. California laws allow workers to take up to 12 weeks of unpaid family leave in a 12-month period, which can be combined with up to four months of maternity leave or disability leave to give new mothers a total of up to 28 weeks off.
The state also offers up to six weeks of paid leave to care for a newborn, adopted child, or seriously ill family member, providing benefits equal to 55 percent of the beneficiary's weekly pay up to $1,104 a week. Moreover, California requires employers to give workers up to 40 hours of leave each year to participate in their children's educational activities.
Additionally, California has a $57,161 median household income, which is about $5,000 higher than the national median, and parents in California pay child care costs that are about average.
The real pain points for California families' budgets, however, are food and housing costs. California has the second-highest housing costs of any state, with a median monthly rent of $2,267, which is 47.6 percent of the median household income.
UTAH A dollar will go further in Utah when it comes to food and child care. The state's food costs are 7.8 percent lower than the national median, and child care is at least $1,100 cheaper a year for every age group included in this study, though the state lacks a family leave policy.
Families earning the state's median household income of $60,053 have $667 more in their monthly budgets than the average American household. Their incomes are lagging, however, because of a strong gender gap in employment and wages similar to figures from the 1970s.
Utah has the lowest percentage in the nation of mothers of young children in the labor force and one of the highest gender pay gaps in the country. Women are paid $0.70 for every $1 men are paid, according to Bloomberg. Support for new state laws aimed at closing the labor and wage gap could help strengthen Utah families' finances.
TENNESEE When it comes to affordability for families, Tennessee comes out on top due to its low costs for the biggest budget items. This state has the second-lowest child care costs in the nation, paying just 63 percent of the national median for full-time infant care ($5,857 a year).
Housing and food are also cheap. Tennessee families pay just under $200 less a month than the national median for rent, and the state's median home listing price is $30,000 lower than the national median. Food costs are 5 percent cheaper than the national average. Even with the state's underwhelming median income of just $42,785 and a lack of family leave, Tennessee still offers families low costs and affordable living. ___ Elyssa Kirkham writes for GOBankingRates.com, a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.