How to Save Money on the Costs of Raising a Child

Numerous studies have shown that the average cost of raising a child from birth to age 18 is around $245,000. This number seems insane to all four of us here at Financial Conversation, especially to Chonce and Kristi, who do their best to cut down on the costs of raising a child (or children).

We believe that there are definitely ways to save money on the costs of raising a child so that parenthood doesn’t force you to put your other financial goals on hold.

This was the topic of discussion in this week’s episode of the Financial Conversation podcast. Just in case you missed the show, we wanted to share a few of our tips for how you can save money on the costs of raising a child.

how to save money on the cost of raising a child

Don’t Get Caught Up in Keeping Up

Keeping up with the Joneses is something that can definitely damage your finances, but what you may not know is that keeping up with the Joneses can also cause you to spend more money on raising a child than what is really necessary.

“Your kids don’t always need to have name brand clothes, expensive gadgets, and the hip new thing that everyone in their class has,” suggests Kristi. “But, if keeping up with the trends is important to your child, give them the opportunity to earn money and fund some of those items themselves. It will give them a chance to learn the importance of hard work and the value of a dollar while saving them from the “total embarrassment” of not having that hot new thing.”

You can respect your child’s wants and needs without going overboard on spending. Don’t just dismiss your kids’ requests, because those items (like our Tamagachis, butterfly hair clips, and Easy Bake Ovens) may seem useless to parents, but they’re the little things that kids are going to remember.

Spend your money on their needs and maybe a few wants, but as Erin says, “Keep your focus on the basics instead of on the Joneses, and you’ll be fine financially.”

Limit their activities

Kayla believes, “Children don’t need to be involved in every single sport and activity out there. You are not a bad parent because you didn’t enroll your child in the same expensive activities as little Tommy next door. You will also not be depriving your child if you don’t buy them every single toy they want. In fact, giving your child everything they want will likely cause them to end up being an entitled young adult without the understanding of the value of money and hard work.”

Kayla is spot on with her advice. Busy parents on a budget, don’t feel guilty about encouraging your kids from an early age to focus their time and efforts on only one activity that they really enjoy. You’ll save both money and stress in the long run if you limit your kids’ activities.

All you need is love

Extravagance isn’t necessary to raise happy kids. As long as you meet a child’s basic needs for food, shelter, clothing, and a good education while raising them in a home filled with love, they’ll be okay. Your child won’t be scarred for life if you don’t spend as much as the average. Erin agrees, “I didn’t have what I would call an “extravagant” childhood, but I had enough. Children don’t need much more than that. As long as you give them what they need to survive (which also includes love and care!), their lives aren’t going to be ruined.”

For the most part, kids will remember the memories of quality time with family, like taking trips to the park together to fly kites or baking goodies in the kitchen. These activities don’t require tons of money, but they’re fun, memorable, and filled with love.

You don’t need hundreds of thousands of dollars to show your child compassion, love, and empathy or to teach your children meaningful values. Even the poorest of families can raise happy, healthy, well-adjusted kids. So, don’t that that average figure of $245,000 scare you away from having kids if that’s what you would like for your future. Raising kids can (and usually does) cost much much less.


How do you save on the costs of raising a child? If you don’t yet have kids, how do you foresee being able to cut the costs of raising a child? 

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