smart spending

Save on costs of raising children

Mom serving dinner to children
  • As your family expands, the square footage in your house doesn't have to.
  • Share child care costs through baby-sitting co-ops or nanny-sharing.
  • Save on food costs by maximizing coupons or growing fresh produce in your garden.

There's no denying that adding a new person to your family increases expenses. But just how much a new child takes away from the bottom line is up for debate. Some people consider the U.S. Agriculture Department's figures in the annual report called "Expenditures on children by families" slightly inflated.

For instance, according to the report, housing is the biggest expense parents incur over the course of 18 years. While a big house in the suburbs may be ideal, it's far from mandatory. Whatever dwelling the parents were calling home before junior arrived will likely have room for the new addition.

Regardless of the actual dollar figure, most parents wouldn't mind saving a few bucks raising their children, particularly when it comes to some of the more pricy expenditures.


USDA average estimate for 18 years: $69,660

According to the USDA report, the cost of housing includes all the variables that go along with a home: mortgage payments or rent, maintenance, taxes and utilities. But the cost also includes furniture and appliances.

As a result, shelter is costly, but parents of very young children don't need to stretch their finances to accommodate a growing family.

"Babies are very, very small at first. I understand that you think this place isn't going to be big enough now that our family is expanding. But it's not a panic situation; you can take time, save up and think about where you're going to move," says Kim McGrigg, manager of community and media relations for Money Management International, a nonprofit credit counseling agency.

Densely populated urban areas in the Northeast tend to be more expensive than rural areas across the country. Big cities have a larger selection of jobs than rural areas, but they come with a higher cost of living.

Babies don't need a whole room to themselves and up until about age 12, kids can share rooms as well, says Ellie Kay, author of "The 60-Minute Money Workout."

For even more savings, bring in someone willing to pay to live with you.

"Consider co-housing," says Susan Tordella, author of "Raising Able: How chores empower families."

"When my husband quit his corporate job and became a contractor, we took in a boarder. His income was going down by about four-fifths, but getting a boarder helped us stay in the nice area we were living in," she says.

Homebuyers should shop carefully for a mortgage. The difference of 1 percentage point can add hundreds to the monthly payment and tack on thousands of dollars of interest over the life of the loan.

Find the lowest mortgage rates in your area.

Child care and education

USDA average estimate for 18 years: $39,420

Naturally, child care is most expensive during the early years. The obvious alternative to day care for working parents is to get a relative to watch the kids, but that's not realistic for everyone.

Baby-sitting co-ops may be the answer. Co-ops allow parents to trade money or time for child care. By baby-sitting for other members of the co-op, parents can earn points toward their own child-care needs.

"Some have it set up where you can buy shares instead of baby-sitting other kids. It depends how it works out," Kay says.


If parents can stagger their work hours, they can save money by minimizing the amount of time that children need to be in child care. With some employers offering flexible schedules, it may be possible for one parent to leave the home at 7 a.m. and be home by 2 p.m. while the other works a typical 9-to-5 schedule.

"Work hours that complement your spouse's hours, and still allow for family time. If Dad is coming home at 5, you won't see him in the morning, but you'll see him in the evening and have family time," Kay says.

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