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5 Cities Where It Costs Less to Raise a Baby

BOSTON (TheStreet) -- U.S. government researchers estimate that raising a child from birth to age 18 costs $241,000, but here's a look at five cities you can move to where you'll reduce that tab -- at least during your newborn's first year.

"Having had children myself, I know that the expenses involved are one of those things that you don't think about until you've had kids and say: 'Where did all of my money go?'" says researcher Tommy Unger of real-estate site Redfin, which recently named the cheapest and costliest U.S. cities to have a baby.

Redfin found the high- and low-cost locales by analyzing how much the average of the first year of baby-related expenses in 40 of America's largest metro areas. The study looked at:

  • Housing costs. Redfin calculated the cost of "upsizing" to a bigger home by comparing median prices consumers paid between May 1 and July 30 for two-bedroom houses or condos in each city vs. three-bedroom ones. The site then calculated the added mortgage costs you'd incur during your baby's first year if you bought the larger place using a 30-year, 4.5% fixed-rate loan.
  • Child care. Redfin estimated each city's child-care costs by combining National Association of Child Care Resource and Referral Agencies figures for expenses by state with U.S. Labor Department data for child-care workers' salaries by metro area. Figures refer to nine months of child care, as the study assumed at least one parent will stay home during a newborn's first three months.
  • Energy. The study projected the added energy costs involved in having a baby by multiplying U.S. Census estimates of each metro area's typical home-heating and cooling costs by 20%. "Having had children myself, I can tell you that if you ever go into a newborn's house in the winter you're asking: 'Why is it 90 degrees in here?'" Unger says.
  • Health care. Redfin estimated that newborns' parents incur $3,000 in extra out-of-pocket medical expenses regardless of where they live. That's based on a 2013 study commissioned by the nonprofit group Childbirth Connection.
  • Baby items. Using BabyCenter.com figures, the site assumed that families spend around $5,500 regardless of location for diapers, sippy cups and everything else a baby needs in its first year other than child care.

All told, Redfin estimates the average family in the 40 metro areas studied will spend $26,000 extra during a newborn's first year.

But costs vary widely from city to city.

Unger says the biggest variables separating costly metro areas from inexpensive ones revolve around home prices.

"Land is limited and housing is limited on the West Coast or in New York City -- which leads to very drastically different home prices than in places like Las Vegas or Atlanta, where there's plenty of space," he says.

The expert adds that child-care workers in cities with high home prices also usually expect higher wages. "You generally have to pay salaries that are well above minimum wage, and things get expensive very quickly," Unger says.

Click below to check out five cities that Redfin estimates offer the lowest costs for raising a newborn during the child's first year.

All references to "average" figures refer to the average among the 40 metro areas that Redfin analyzed. (The study includes most major U.S. metro areas, but excludes Houston, Minneapolis and some other cities for which Redfin lacked sufficient home-price data.)