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If you have kids, you know they’re not cheap. A recent LendingTree study found the annual costs associated with raising a small child have jumped 36% to over $29,000 since 2023, due to a surge in the price of daycare, food and health insurance. The entire ride — from birth through 17 — can cost a middle-income couple $320,000, according to inflation-adjusted government estimates. And that’s not including college, of course. This financial lift has serious consequences. Many Americans cite the expense as a reason for not having any children, or having fewer of them. And 64% of parents report taking on debt to pay for their child-related expenses, in part because of pressure to overspend on them, according to LendingTree. In fact, a recent Northwestern Mutual survey suggests it’s our youngest would-be parents that are most worried about the costs: 29% of Gen Z respondents — many of whom are in high school or just out of college — ranked kids as a major affordability challenge, compared with 16% of millennials, who are mostly in their 30s and early 40s. For Gen Z, the expense of kids was their second-most common financial concern after buying a house, topping the cost of college or having enough for retirement. The good news, no matter your generation? It is possible to spend less. Lower-income families spend less than half as much raising kids as upper-income families, according to the U.S. Department of Agriculture. And there are many other variables too. Costs are lower in rural areas and as you have more kids. (The $320,000 estimate we mentioned is based on having two.) So what? Throughout economic boom-and-bust cycles, savvy moms and dads have found ways to afford children. Some even manage to live on one income. And if you’re feeling the first baby twinges, don’t give up on your dream of a family. While children introduce new costs, they also eliminate the need (and the desire) for other things you spend money on now. There are many creative cost-saving solutions when you have kids. Here are just a few. (Find plenty more in our SoFi Guide to Financial Family Planning.)• Think outside the box on childcare: Staggering work schedules with a spouse can defray the costs of babysitting, as can home-based childcare providers. If it’s possible, grandparents are also a great go-to. Or maybe a responsible young adult in your life is trying to save money and would be happy to watch your kids in exchange for a free room.
• Resist overspending out of guilt or peer pressure: Seventy-two percent of parents surveyed recently by Ameriprise Financial said they experienced parental guilt, and many said this led to spending beyond their budget. Of course you want to give your children the best life you can, but it’s important to set boundaries and show what can be accomplished with smart financial habits.
• Forgo trappings for awhile. Bigger isn’t always better, at least where your budget is concerned. Some parents share a modest one-bedroom apartment or drive the same car for as long as possible.
• Spend money on what really matters. Invest in the things that make a quality-of-life difference like sleep, nutrition, safety, and health. Rely on second-hand stores and Buy Nothing Facebook groups for wants and nice-to-haves.
• Plan for the future. Set your family up for financial security, even if it’s with small contributions to a high-yield savings account or a 529 college savings plan. Creating a monthly family budget can help.
• Take advantage of all child-related benefits. These can include tax credits, need-based health insurance subsidies and flexible work arrangements. (The Trump administration is reportedly considering a $5,000 “baby bonus” to incentivize people to have children.)
Related Reading
• Summer Means New Clothes, Bikes, Strollers and More. How Will Tariffs Impact Parents? (USA Today)
• A State-by-State Breakdown of Exactly How Much It Costs to Raise a Child (Parents)
• Common Financial Mistakes First-Time Parents Make (SoFi)
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