The Money Issues That Come With Having Kids

A study released by the United States Department of Agriculture (USDA) in 2015 estimated that the average cost to raise a child in America through the age of 17 was $233,610. That’s nearly a quarter of a million dollars and that doesn’t even include the cost of college. In 2022, considering inflation, that number is closer to $286,000.

As the parent of two young children, it doesn’t take a math genius to realize the high cost of raising children today. Health insurance premiums, daycare, grocery bills, sports, and other activities alone can quickly add thousands to our annual budget. It goes without saying but in most cases, your children are not going to have a positive return on investment from a money standpoint.

Of course, it’s impossible to put a dollar amount on the lives of our children. Most of us would pay many multiples of $286,000 if possible to keep our children safe and happy while asking for nothing in return. 

Before we had our own kids, in many ways we were completely oblivious to the costs associated with raising children. Below are a few expenses that were surprising to us as we embarked on our journey as parents, along with a few ideas to keep our expenses down. 


Before having children we heard all the stories about the expenses associated with daycare. However, it wasn’t until we started making our rounds at local daycares that we truly realized the extent. Several prices were comparable to what we’d pay to take a full slate of classes at a local university. We were also shocked by the long waiting lists. We started looking for places three or four months in advance which turned out to be way too late.

After our oldest was born, we had a friend watch him for the first few months. It worked out well overall but was far out of the way from work. My wife was teaching at the time and we eventually found a reliable in-home sitter closer to work at a much lower price with more flexibility. For us, finding the right daycare was all about finding someone we could trust in a safe environment. It took months of searching to find the right one. 

My advice is to start early in order to find the right daycare for you. The sooner you get started the better. Also, higher cost does not always mean higher quality. There are plenty of great daycares out there that are on the lower end of the cost spectrum in your area. You’ll just need to dig a bit to find them. Personal referrals from trusted friends and family tend to be the best way to identify these outliers. 

Health Insurance Premiums

I am fortunate to work for an organization that provides great health care benefits. Even with great options though, I remember being shocked at the price increase for adding a child to our policy. The cost increases added several hundred dollars to our monthly expenses. 

Between daycare and increased health care premiums, our annual expenses jumped by a five-figure sum. This doesn’t include additional expenses such as diapers and formula. I was starting to see how the average cost of raising a child could easily be more than $200,000 through the age of 17. 

When considering health care options for your child, this is another place where you want to get a head start. Consider all potential options provided by your employer or in the private market. If you have low debt and emergency savings, you may be able to get a higher deductible plan with lower monthly premiums. Just wait until you are done having kids because you will hit those high deductibles and out of pocket maximums quickly. 


Given the current situation in our country with COVID-19 we are spending a lot more time at home. Let me tell you, two children eat a lot of food. It’s not just diapers and formula when they are babies. If you can believe it, they actually start growing and continue to consume more and more.

One weekend breakfast for our family of four can consist of nearly a dozen eggs, half a package of bacon, and several bagels. Our two-year-old is the only regular milk drinker in the house and she goes through a gallon every three days. I don’t want to know how much they will consume once they are teenagers. 

A few years ago we started shopping at Aldi. This nearly cut our grocery bill in half compared to the higher-priced grocery stores in our area. We find the quality of food at Aldi to be just as good as the higher-priced stores. We even started buying our daughter’s formula there (ingredients are the same). 

Other Expenses

Unless you plan to lock your children in the house every day, it’s not easy to keep the cost associated with our children down. The above expenses are mostly necessary. But what about expenses that are more discretionary? Tickets to events, traveling, and going out to eat (which I wouldn’t recommend doing often with two young kids) can add up quickly.

Then there are activities. We signed our oldest up for Scouts and it felt like every time we breathed we were asked to pay $20 or more. He’s also done baseball, soccer, basketball, and swimming lessons. These are all at least $100 a session and will only get exponentially more expensive as he gets older. 

Again, none of this includes any money we’re putting aside for college funds. 

Reducing costs in this space is all about intentionality. We try not to overcommit to too many activities. Travel rewards miles from credit cards have helped to offset the cost of travel. And usually, we send the kids to the grandparents if we decide to go out to eat. (By the way, having family that lives close to babysit is a great hack). 

Kids Are Expensive 

Who would have thought that little bundle of joy would put you back nearly a quarter of a million dollars? Kids are expensive, no doubt. Some charges are unavoidable such as health care, daycare, and groceries. Others are more discretionary such as traveling, sports, and other activities. 

Like anything, if you are intentional and have a sense of what’s really best for your family, then you can reduce the cost of those little monsters.

Spend time searching for a great daycare that doesn’t cost you an arm and a leg, do your shopping at a discount grocery store such as Aldi, and really think about what activities bring your kid joy and teach important lessons.

Most importantly, don’t try to keep up with the Joneses. Taking these small actions may help you stay below the nearly quarter-million-dollar threshold.

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