Little bundles, big price tags.

Americans think it is more expensive to raise a child than it actually is, according to research released Thursday by financial site Bankrate.com. Indeed, Americans guessed that it would cost them an average of $24,131 to raise a child through the first year. Meanwhile, the government says it will cost an average family $12,680.

This could be due to a couple things, says Claes Bell the data editor at Bankrate.com. One may be that people don’t really understand what it will cost to meet a baby’s needs. Some may just extrapolate those costs based on their own costs, even though babies needs can be relatively modest compared to an adults, he explains. Americans could also be thinking about “two big items that are outside of the scope of the USDA numbers: saving for college and lost income,” he says. When you factor those in, costs go up.

All told, it may cost you $600,000 to give your child the same extras that thousands of other parents give their children. Higher-earning parents will spend an astonishing $454,770 to raise a baby born last year until they turn 18, according to a new study from the United States Department of Agriculture. (In this study, affluent parents are defined as earning more than $107,400 per year.) Add in the cost of college, which could easily add up to $150,000 (assuming 3% annual college inflation rate), plus the cost of private school, and parents are shelling out $600,000 or more.

Families earning less, will spend less, but it’s no small amount. Middle-class parents (defined as those with incomes of between $59,200 and $107,400 per year) will spend $284,570 to raise a child up until their 18th birthday. For families earning less than $59,200 per year the number is $212,300.

Adding to the gap between wealthier parents and everyone else, affluent parents today spend more than twice as much (113% more, to be exact) on their kids as poorer parents do, compared to roughly 25 years ago when more affluent families didn’t even spend double what poor families spent. And they spend about 60% more than middle-class families, compared to about 40% more 25 years ago.

The data show that much of the amped up spending by wealthier parents is on education like private schools and college-prep courses; miscellaneous items, which includes sports equipment, reading materials and entertainment items like iPads; and housing, which may be due in part to parents paying a premium to live in a better school district. (Homes in good public school districts cost 77% more than homes in average or below-average districts, according to data from real-estate research firm ATTOM Data Solutions.) Indeed, wealthier married families today spend upwards of 300% more than lower income families and nearly 130% more than middle-income families on child care and education; 73% and 48%, respectively, more on housing; and more than 200% and 85% more on miscellaneous items.

All of these things, of course, can help their kids learn about technology and get into a better college, which can later help them get a better and higher paying job down the road. And extra-curricular activities like educational trips and participating in certain sports can also expose kids to a network of people who can help them land jobs down the road as well, says Hans Scheil, the president of North Carolina-based Cardinal Retirement Planning and the author of “The Complete Cardinal Guide to Planning for and Living in Retirement.”

Wealthier parents can give “a lifestyle to their kids that will impact their lives forever,” says parenting expert Cherie Corso — as lower income and middle-class families simply struggle to pay for the basics. Indeed, lower income families often struggle even to afford the basics like healthy food. And it may help explain, in small part, why the gap between the rich and poor continues to be so wide in this country: The richest 20% of households in America now have more than 84% of the total wealth in the country; the bottom 40% have just .3% of it.

 

This story was originally published on MarketWatch.