Parents spend 20% LESS on their third child than on the firstborn – while the cost of raising three children rises to $54,000 a year

Raising three children costs the average American family $54,000 a year — with costs rising to $90,000 in the most expensive places in the country.

But the third child costs parents about 20 percent less than the first, according to analysis by fintech company SmartAsset.

Typically, the cost of childcare, housing, food, medical expenses, and transportation is highest for the firstborn, with an annual average of $20,814 nationwide. This drops to $17,413 per year for the second child before falling even further to $16,513 for the third.

Jaclyn DeJohn, editor-in-chief of economic analysis at SmartAsset, told Dailymail.com, “There are marginal cost reductions when you add kids because you can reuse past expenses to lower the total cost per person.

“For example, if you have to buy a family-friendly car when you’re expecting your first child, you won’t have those costs again if you add a second child.”

SmartAsset examined the cost of food, child care, health care, additional housing and other necessities in 381 metropolitan areas when a family with two working adults adds one, two or three children to their budget.

Ann Arbor, Michigan, is the most expensive place to raise children in the U.S., according to the survey, largely because of exceptionally high childcare prices.

Raising three children under the age of four in the city will cost the average family about $91,063 — with childcare costs running as much as $22,000 per year per baby.

Raising the first child costs $31,670, according to SmartAsset, but drops to $28,924 for the third — a percentage drop of nearly 9 percent.

The San Francisco area is notoriously expensive, especially when it comes to real estate.

The San Francisco-Oakland-Berkeley metro area is the most expensive place to raise a single child, according to the study, at $35,647.

But if a family doesn’t need to upgrade their housing between the first and second child, they get a significant reprieve — with the annual cost of a second child dropping to $24,988.

Kalamazoo-Portage, a metro station about 50 miles from Grand Rapids, Michigan, closely follows Ann Arbor when it comes to the price of childcare, with annual costs of $20,000, SmartAsset found.

This meant that the annual cost of raising three children in the area averaged $86,124.

However, raising a third child in the area costs 11 percent less than the first — with the annual price dropping from $30,786 to $27,321.

Parents’ spending on big purchases, such as a car, becomes more efficient when they have more children, DeJohn said, because they spread the benefit to more people.

“This also applies to other parenting costs, such as food and housing,” she added.

It comes after a landmark study revealed earlier this year that childcare costs nationwide have risen 220 percent in three decades — much faster than general inflation.

The skyrocketing costs have forced many parents to leave the workforce, educational charity the Annie E. Casey Foundation found, with families facing an effective geographic “lottery” with child care costs varying by thousands of dollars between states.

The rising cost of childcare is partly due to more parents working – increasing demand – and the fact centers themselves being underfunded and under-resourced. Childcare businesses survive on margins typically less than 1 percent, the report said.

When it comes to the most affordable places to add kids to the family, metro areas in South Carolina, Alabama, Tennessee, and Mississippi come out on top.

According to SmartAsset, Sumter, South Carolina is the cheapest area to raise three children.

Raising a first child in the area costs $14,702, the study found, dropping to $13,105 for the second and just $9,742 for the third — a total of $37,549.

In Gadsden, Alabama, parents must pay $15,261 to care for their first child, falling to $13,184 for the next and $10,037 for the third.

The study comes as couples brag on TikTok about the benefits of a “DINK” lifestyle — meaning “double income, no kids.”

Dating back to 1987, the term “DINK” was first coined by the Los Angeles Times when researchers noticed that stagnant incomes were deterring prospective parents from starting a family.

But it’s gone viral again on social media amid high inflation and rising childcare costs. The term ”#DINK’ has now been viewed more than 205 million times on TikTok.

TikTok star Hilary Bowles has similarly drawn a cult following by documenting her life as a “DINK.”

Bowles shared a video of herself and her partner vacationing in Bora Bora, with the caption, “In our era of being married, traveling the world, pre-kids, double income.”

In another post, she shared a clip of herself opening a Chanel shopping bag in front of the Eiffel Tower in Paris.

It was followed by dozens of clips of herself and her husband enjoying luxurious vacations on boats, beaches and safari parks.