Financial Considerations for Anyone Who Wants to Have Children

Adopt a Baby

According to CNN, the average cost to raise a child born in 2012 is $241,080. For the sake of clarity, this number applies primarily to middle-income, American couples, and could be much higher or lower, depending on where you live. Still, $241,080 over the course of 18 years? Per child? That’s like a mortgage on a modest home! While there are some ways to reduce expenses—child care tax credits, education investment credits, etc.— there are several things to consider prior to starting a family:


One of the biggest expenses families face during their children’s younger years is the cost of childcare. Parents-to-be find themselves in a Catch-22 situation, where they need dual incomes to support themselves and a child, but the cost of childcare eats up a significant chunk of their income.

Some families are fortunate enough to have a mom or dad stay at home with the kids (home-based businesses are helpful for this), but unless you fall into this category, you may be paying in upwards of $1,000 per month or more (per child) for full time care. This figure encompasses licensed day care centers; some families who can’t afford these prices turn to unlicensed, cheaper facilities, where the child’s health and safety may be more at risk.

Health Care

Another major cost associated with having kids is health care. Not only do you need to account for prenatal care and costs associated with birthing, but also the costs of health care when the kid is born, up until they’re 18 years old. According to the aforementioned article from CNN, the USDA estimated that one child will cost $20,000 in health care expenditures over the course of 18 years. This number could vary, depending on your insurance coverage and the overall health of the child. But the $20,000 figure is a good starting point for determining how adding a child to your family will affect your financial stability.

Food and Clothes

Food may be a basic necessity to live, but from the prices you see in grocery stores these days, you’d think it were a luxury item. There are ways around exorbitant food prices—don’t buy organic (a recent Stanford study found there is little to no additional nutritional value, anyway), find coupons, consider breastfeeding over purchasing expensive formula, etc.—but the fact remains that the cost to feed a family of three, four, or more is exponentially higher than a childless couple. Don’t forget the teen years, either: prepubescent kids may seem like they eat a lot, but that’s nothing compared to what they eat once their growth spurts kick in and they need to extra sustenance to support that growth!

Speaking of growing up, kids’ growth spurts can be a nightmare when it comes to buying clothes for them. Many frugal parents stick to the hand-me-downs tactic for multiple siblings and shop at places like Target when it comes time to buy new clothes. However, having an extensive wardrobe is hardly necessary for kids—unless they’re teenagers and want to buy the clothes themselves with money they earn from side jobs—so stick to the basics to minimize the costs (without being too stingy, of course).

Activities, Vacations

Kids are extremely active, both physically and mentally. They crave constant stimulation and unless you can devote a majority of your time to entertaining them, you’ll need to find other outlets to channel their energy. This can include sports teams, scouting programs, creative classes, summer camps, etc. All of these cost a pretty penny—some cost over a few hundred dollars per year—and should be factored into the cost of raising a kid because they’re a part of the childhood experience. Vacations also become quite costly once children are added to the family. If you and your spouse want two kids, that’s double the airfare, double the theme park admission tickets, and double the amount of food you’ll have to buy from overpriced tourist areas. There are other ways to save money on vacations, such as staying local and finding deals online, but unless you go cold-turkey on vacations (the least favorable option, I’m sure), your travel expenses will be much higher once you have kids.

“Luxury” Items

Kids seem to have a bad habit of wanting to “keep up with the Joneses” (or in this case, their peers). They want the latest toys, phones, gaming devices, tablets, shoes…well, you get the point. Luxury items like these only further the costs of raising kids, but the fact of the matter is that you probably won’t avoid buying these things altogether. Kids do need phones, but do they need the latest iPhone in the third grade? Nope. Frugal-minded parents compromise between their kids’ seemingly never-ending list of things they want and the amount of disposable income they have to spend on these things.


Finally, we have college. Shockingly, the cost of tuition isn’t even included in CNN’s $241,080 figure, which means you’ll need an additional $80,000 or so if you want to cover your child’s higher educational expenses.

Note: the $80,000 figure will likely be much higher eighteen years from now, given the out-of-control inflation on college expenses we’re seeing presently (not to mention state budget cuts that are sending costs of public university tuition through the roof).