Middle America You Can Have Kids Without Going Broke - picture of parents with little girl in grass

Middle America: You Can Have Kids Without Going Broke

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According to CNN Money, a recent study from the U.S. Department of Agriculture claims that the average cost of raising a child climbed to more than $245,000 in 2013.

To reach that number, they took the average costs of housing, food, clothing, education, health care, and child care into consideration, along with things like hair cuts, cell phones, and extracurricular activities.  Sounds legit, but are those numbers right?  Does it really cost a quarter-of-a-million dollars to raise a kid in America these days?

I call bullshit.

First of all, it really depends on where you live.  If you live in Manhattan or Connecticut or L.A., then yeah, you might need to spend that much to have a kid- or even more.  The U.S. Department of Agriculture seems to think that $455,000 is a more appropriate figure for high-income parents raising a child in the urban Northeast, for example.  And I totally get that.  But what about the rest of us?

RELATED: Having Kids: Is It Worth It?

I live north of Indianapolis in an affluent area with a median income of $82,468 according to U.S. Census estimates.  So even though I live in the Midwest, housing costs more than average because we have excellent schools, almost no crime, and lots of trees.  There are plenty of ways to spend fat cash here if you want.  As a matter of fact, a daycare within a mile of my house wanted almost $500 per week to watch my two kids!  In other words, $2,000 per month.  And there are plenty of McMansions here too – I just choose not to live in one.

People will tell you that kids are uber-expensive – that you can’t afford them while keeping a roof over your head.  But no matter where you live, there are advantages and disadvantages, and there are always ways to save.

You Can Have Kids Without Going Broke

If you live in an expensive area, I feel for you.  You may not have inexpensive housing or daycare options, and it’s quite possible you’re paying a premium for things the rest of us take for granted.  But almost everyone else in the country can have kids without going broke.  Here’s how:

Don’t Buy a Starter Castle

It’s tempting to buy all the house you can afford.  I know- I’ve been there.  I have the real estate itch like you wouldn’t believe – I just choose to scratch it in ways that aren’t financially detrimental.  In other words, I go to open houses, people.  I look at houses and don’t buy them.  You can do the same – all you need is a Sunday paper and reliable transportation.  Living in a smaller home can not only help you save money, but it can also cut down on your maintenance and utility costs too!

RELATED: 5 Personal Finance Lies Your Parents Told You

Learn to Say No…and Mean It

When I was growing up, we heard “no” so much that we were actually surprised when we heard “yes.”  That’s exactly how I raise my kids now, but I still managed to spoil them somehow.  {How does that work?}  When it comes to kids toys and trinkets, we would all be better off if we said “no” more often, and we would all be richer as a result.  Want to cut down the costs of having kids?  Don’t buy them a bunch of crap!  It really is that simple.

Watch Your Grocery Spending

Food spending is one of the biggest issues that families struggle with, and it is crucial that you keep it in check.  When we started tracking out spending, we found that we were spending waaaaaaaaaaaaaaaay too much money on food and eating out.  Fortunately, it didn’t take long to get back on track and it’s been smooth sailing ever since.  If you want to cut down your food costs, consider tracking your spending for a while and implementing a zero-sum budget. All of those snacks, drinks, and wasted leftovers add up!

Don’t Fall Into the Pricey Daycare Trap

Remember the $500 per week daycare I mentioned a few minutes ago?  In case you’re wondering, they offered baby yoga and French lessons to their members.  Isn’t that adorable?  Maybe so, but for $2,000 per month?  No way!  I can’t stand hearing people complain about the high costs of daycare when there are other options.  If you don’t have 2Gs to drop on daycare every month, shop around for heaven’s sake.  You can find a safe and friendly alternative that won’t cost the equivalent of three mortgages each month.  Save that money for college.  Please!

Kids Can Be Affordable, If You Want

If you live in Middle America, you don’t have to go broke to have kids.  To stop bleeding dollars and cents, all you need to do is to prioritize your spending and cut back on things that aren’t that important to your family.  Obviously, we all have different priorities too, and that’s okay.  Maybe you want to splurge for that pricey daycare, but are willing to cut back elsewhere.  Hey, whatever works!

It only becomes a problem when you think everything is a priority – when you think junior needs private karate lessons, a new car at 16, and a guest room to use when friends visit.  Trying to get the best of everything all of the time will only ensure that you do spend a quarter-of-a-million dollars, or more, raising your child.

You want more thoughts on parenting and money? BOOM! Ask and you shall receive:

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  1. I read “Middle America” as middle-class rather than literally the MidWest so I’m a bit sad this technically doesn’t apply to us (we’re in SF. doooooomed)

    Still, much of this applies, just with higher price tags. We’re going to have to start being even more mindful of the money we spend on food and we have seriously shopped around for childcare options. The standard, and by that I mean minimum, around here is just under $2000 a month and for that they only supply a snack but no meals and no hygiene-related stuff. It kills me but we just have to keep looking.

    100% behind you that saying no to crap is not only huge, it’s necessary. You can love and spoil your kids plenty w/o wasting money like it’s free!

    1. Daycare sounds crazy there! At least it should only be temporary, right?

  2. Yoga and French lessons at daycare???? Crazy!! We try really hard not to buy a lot of clothes, since our little miss is growing soooo fast right now. I’d rather do laundry a little more often than have a lot of clothes she’ll outgrow in a blink. We buy most of our baby supplies on Amazon and I mostly avoid baby stores (there’s way too much cute stuff out there; I don’t want to tempt myself!)

    1. We have too many shirts and not enough pants. That means I do laundry all the time! I hate to buy my youngest any new pants at this point though- it will be shorts weather soon! Plus she has jeans that she refuses to wear because they aren’t “cozy.”

  3. Daycare costs are very location dependent, and price often means a lower student teacher ratio, which can make a big difference in quality. Also toddler yoga isn’t actually a big deal even if it sounds fancy. Still, even in expensive areas kids age 3+ can get high quality daycare for say 1300/mo plus fees rather than 2k if they are willing to go religious.

    1. Of course daycare costs are dependent on location, but there are ways to save. Like you said, consider a religious daycare, or go to one slightly out of town. That’s what we do- we little area is too expensive so we use daycare on the other side of town. Imagine if everyone spent $1,300 per month instead of that crazy 2K- that’s $700 in monthly savings!

      1. For us, right now, we’re spending $800/mo and it is the most expensive daycare in town. But it is WORTH IT. Not because of yoga (which they don’t have) or Spanish (they all have Spanish), but because it’s got high quality teachers with actual Montessori training, low student/teacher ratios, and so on. She’s got friends, she’s no longer having nightmares, dropoff is a breeze, she loves her teachers, and there’s no physical violence among the children at all. It is $200/mo more than where she was going before (even though it’s in a much worse part of town) and worth every single penny.

        We’re even willing to pay $2000/mo if we need to next year when we’re in a high COL area because having a high quality daycare where DC2 can be happy is a top priority for us. It is, however, unlikely that we will need to because those daycares always have 3 year wait lists and so long as we don’t mind her learning Hebrew or about Jesus for a year there are religious schools that don’t have waitlists.

        1. I agree with you. Our biggest expense every month is childcare, but it is quality. And not “I need my kid to get ahead in life” quality, but “my kids are more grounded, level headed, and mature” kind of quality. It’s very expensive, but it’s hard to put a price tag on something like that in my opinion.

  4. I COMPLETELY agree with you!! My kids are still little, but other than the birth it really hasn’t been that expensive. We just factor things like diapers and formula (when they were on it) into the budget and that’s that. For us, it evened out because we used to go out and party a LOT before kids, and having kids automatically mellows you out which saves you money!

    1. Our hospital bills were the biggest expense I can think of aside from ongoing health insurance. Other than that, kids are cheap! Of course, it helps that we were blessed with children that are very healthy and haven’t been sick. That makes a big difference and those costs are often out of one’s control.

  5. I just had this same conversation with someone the other day. It doesn’t have to cost a fortune. We really cut back on clothing purchases for our daughter. Some people go crazy with that, so we get a lot of hand me downs for that reason. I’m not complaining!

    1. We get some hand-me-downs and buy some used stuff on craigslist and at garage sales!

  6. I could not agree more Holly. So much is in how you approach it and what your priorities are. We’re in Omaha and sounds much like Indy. Sure, we could spend all sorts of money to have our kids be in the lap of luxury – but why in the hell would we do that? We see friends who spend gobs of money to put their kids in private lessons for this or that and while it’s great and the kids love it they wonder where their money is going each month.

    We were actually talking about this as we have a client that’s a private school here in town. It’s non-religious and starts at kindergarten and goes to high school. The cost to send your child there just for kindergarten – $9k/year and that’s just for tuition! It goes up to $20k for high school. Anyway, the opportunities to spend are certainly out there, you just need to choose not to give into the belief that spending more equates to better.

  7. And teach them about money and that it isn’t an infinite resource. We barter with it, and there isn’t a tree outback growing ben jamins. My 3 year old told me the other day she was going to go buy something and I had to chuckle.

  8. I’m pretty sure I can’t have kids without going broke. Even the most run-of-the-mill day care around here is $1500-$2000/month for a single child. And that’s at typical children learning centers and the YMCA! I think we’re going to save money on that front, when the time comes, with SO as SAHD/primary caretaker, with maybe a couple days a week of day care when they hit 3 or so, for the educational and socialization aspects.

  9. Many of those statistics also assume you will send your child to private school all the way through college. If you locate in a school district with a great reputation, you don’t need private. And when our son went to college, he knew it had to be an in state public university. Our state’s flagship university did great for his undergraduate degree and then he went out of state for his Masters. I don’t believe for a minute that the stated costs to raise a child have to be written in stone.

  10. I can’t weigh-in on the kid aspect, but I LOVE touring model homes. I like going through houses in general, but you can run into some pretty weird stuff at Open Houses/Foreclosures. Model homes are so relaxing and inviting (so long as the sales person doesn’t insist on following you around).

  11. You also have to watch what sports you let them participate in. My son plays lacrosse and once you get to the level where you get on travel teams the cost skyrockets.

  12. Yep! It’s frustrating when I have clients that get “trapped” into a high mortgage payment and the “best” daycare or private schools. I think it’s totally doable to have kids without going broke, but I think some people fail to factor in the costs before they add to their family. Our splurge is my daughter’s dance classes, which run about $60 a month, but she also has a recital fee, costume fee, etc. She is 4, and instead of giving her allowance, she earns magnets throughout the week for good behavior, helping on certain things around the house, etc and if she gets all of her magnets, she gets $2 to spend at Half Price Books or the Dolllar Store. I’m not sure that I would ever send my kid to a private school, but we seem to have a lot of friends that went to public schools that are set on sending their kids to private school.

  13. Ben Luthi says:

    People are hilarious. I think laziness is the biggest issue. Parents don’t want to deal with their kids whining, so they just give them whatever they want. They don’t want to even consider that getting daycare for cheaper is easy, so they convince themselves it’s too much work. My wife will be cutting our kids’ hair, and yes, even in this day and age, your pre-teen (or even teenager for that matter) doesn’t need a cell phone.

  14. Daycare would be our biggest expense. Here in Silicon Valley the lowest end, in-home daycare is $50 a day per child and goes up quickly from there.

    Currently, Mrs. E. is staying home to care for junior. We can afford it, and we\’re saving on daycare, but at the cost of our retirement savings. Don\’t get me wrong, we\’re budgeting and still saving but at a much much slower rate.

    Having children won\’t break the bank, but no matter how frugal, it\’s still a very significant financial drain.

  15. I don’t think 250K per kid is ridiculous at all. I will use myself as an example. I am taking my family spending last year – 34K and dividing by the number of people in my family (3)- 11.3K of spending per person. I would guess that most families earning the median income or more spend at least 34K in a year, and if they’ve got at least one kid than at least 1/3 can be contributed to kid spending (if we itemized it would be close to half).

    We absolutely spend more on childcare than is the bare minimum, but it is money that I consider well worth spending.

    1. 11.3K per year for 18 years is only 200K, but I hear ya. If you are paying pricey daycare, it definitely adds up quick! Thank goodness kids grow out of the daycare stage. I would rather spend that money elsewhere. Having my oldest in school helps us a lot.

  16. RIGHT on the money, Holly. We raise our kids with the “no” answer too. In fact, they don’t even ask any more. Instead, if they want something (and this includes grocery store goodies as well as toys or clothes) outside of their bday or Christmas, they now ask “Mom, how can I earn the money to get this?” Oh, and we don’t do designer clothes, yearly trips to Disney or electronic gadgets. You can raise kids frugally and still give them an awesome life.

  17. It would be interesting to see a model that shows data plugins for estimating the cost of having a child today. I’m sure inflation plays a big role, as well as even a small amount of college savings (since that’s money + interest that you otherwise would have in a retirement account, ideally). I don’t get into the whole “cost of kids” stuff much because honestly I have other financial priorities and would rather have ZERO dollars going towards kids…for now.

  18. This is really interesting to read. I learned and many great insights here. This is the reality and I want to adopt this kind of thing. It’s very inspiring article. Great post!

  19. Our Little Miss is only two and so far she’s barely cost us anything. I know she’ll cost more as she gets older, but I do think that it’s true that we can make parenting as cheap or as pricey as we want it to be.

  20. I live in one of those high cost-of-living cities, and yeah it’s possible to go broke if you’re not careful. Right now, even though my husband and I make decent money, because of where we live, we spend a lot on child care and housing (even if the child care and housing we have are not all that bling—we live in an apartment that’s not exactly grand).

    We have a few more years to go before all the kids are in public school and we can start saving aggressively again. Til then, we live frugally as best we can.

    We also considered moving before we had kids just to keep expenses low, but since all our families are here, we choose to stay here.

    And yes, we totally have to prioritize! I’ve been budgeting our groceries like crazy. We don’t buy our kids anything (like, I’m getting my twins a book each for their birthday and that’s it). We do free entertainment, like visiting our local college’s botanical garden. And last time we ate out was in October. It helps, even if it’s pinched, and I just keep the bigger picture in mind.

    1. I don’t blame you for not moving somewhere cheaper. Living near family is priceless!

  21. We have 3 children and I think the keys are learning to say no and teaching our children that things will no always be equal/fair. If one need new sneakers because theirs current ones have holes in them it doesn’t mean the other 2 are getting new ones too.

    1. Same here! Our kids are used to that- they understand that we buy things when we actually need them.

  22. I agree with everything except for the fact that there are cheaper daycare options. I live in Houston…1,200 is the average daycare price for the area near where I work. There are not cheaper options for full time daycare that are open late enough for me to get my son. (Well one place is open 24 hours a day but I am not sure how I feel about that….) My boss expects me to work until 6 on an average day. And this is a church daycare! I could live an hour outside of the city to save a few hundred a month on daycare but then I wouldn’t see my son on weekdays because if I leave work at 6 I would sit in traffic for over an hour and then he would be asleep when I got home. And I would never be able to pick him up if his dad couldn’t get him. When we have a second kid it will be 2k to have them both in daycare. But rest assured he wears his hand-me-downs and target diapers to school everyday.

    1. Ugh- I feel for ya. That sounds like a tough decision- cheaper daycare or more time with the kids. I would probably take more time with the kids too! You can’t replace that- ever.

  23. Can’t agree more. There are lots stuff that you can live without. For example, you don’t need a fancy $200+ diaper pail or a wipe warmer. These fancy things are nice but totally unnecessary.

    1. I don’t think anyone needs wipe warmers. I had one once- it just dried everything out!

  24. Day care is the huge variable in there for me. We, and by that I mean I, scoured day care options around us for when Mini Maroon #2 was ready to join big brother at ‘school’. I went to a ton of places hoping to find that diamond hiding in a low-cost option. They were just places where I wasn’t comfortable leaving my kids. I certainly didn’t settle in at the designer places either. In fact, I think we found quite a good deal. $325 a week for an infant and pre-schooler. I was willing to make sacrifices to avoid fancy centers in the name of price, but some reassurances that they are well cared for is worth it for my peace of mind.

  25. The financial impact with the stay-at-home-mom model my family follows is small. We are, however, broke for time. They take all of our time! Is it date night yet?

  26. I couldn’t agree more! We were looking at preschools for our little one (public school isn’t really an option where we live, unless we want her to have tried crack by the time she hits 3rd grade) so we started pricing them. Can you believe they want $2,600 a month (!) for preschool?? Good lord….but thank you for reminding me to shop around!

  27. Library Momma says:

    We live in a very expensive state and the cheapest I can find for two children is $2,000 per month, nothing fancy. It is so wicked expensive we are holding down additional jobs besides our full time jobs to put away money while still affording a mortgage on a tiny house, two daycare bills ( we even space our kids out to make it more affordable), with very little debt. It really a is kind of sad, by the time they are done we will could have paid for our house completely!

    1. That sucks- I’m sorry. At least you are doing the right thing and hustling! The good thing about daycare is that it at least only temporary.

  28. Somehow, it is very tempting to show love to children by spending money. It’s always been that way with me, and I’m trying to curb it. I have a daughter who is seriously into her sport, and it’s SO hard for me to have to say “No” for every sports-related expense that comes up. But she has taken the bull by the horns and is making it all work – through seeking out jobs and scholarships and even by doing a bit of budgeting. She’s a young adult according to her age, and this is all helping her to be an adult in character too.

  29. I live in Toronto where real estate is absolutely ridiculous. I honestly wonder to myself how people are able to afford kids when they are taking on such huge mortgages.

  30. I really have no idea since I don’t have kids, but my friends here in LA have told me how competitive the “mommy scene” is and if you’re kids aren’t taking all these unique classes they are looked down on. How horrible! I suppose if you have kids you might have to make certain sacrifices to make sure they are well taken care of, even if that means moving back to your dreaded hometown so you have family to help watch the kid(s).

  31. Our daycare took the kids swimming a couple of times, does that count for culture? No, I do not think you have to go broke raising kids. In fact, I’d say having a kid saved our finances because if forced us to really think about the future and the path we were heading down. You probably should think about that before you have kids, but better late than never!

  32. I don’t believe for a second that it costs that much to raise kids at least not where I’m at in the midwest. A lot of times parents go all out with housing, clothes, toys etc. because they believe that’s what they are supposed to do since everyone else does that. I’m all about affordable and comfortable living so as long as I rent, I will never put myself in a situation to pay a ton of money for housing. My son also could care less about how fancy his clothes are (he’s 5 and just wants to play). As long as there’s cute character on the shirt he’s happy. We do extracurricular activities at the YMCA on weekends and we have a nice school district so he’ll be going to public school for now. I imagine things might get pricier as he gets older and the clothes and gadgets cost more but then we will just have to prioritize what’s important and what we can do without. I can’t properly teach my child about gratitude and the value of a dollar if I give them every single thing.

  33. I have seen a few new parents rationalize that they need to move into large homes in order to raise their children. First of all, kids don’t need that much space. If you rationalize that they need space for all of their “stuff” then don’t buy the stuff. My son liked playing with a cereal box more than anything when he was little. It’s easy to make justifications where kids are concerned, but it’s more emotional than rational, and when you can stay rational, you can save lots of money raising your kids over time.

  34. You can definitely have kids without growing broke, even in expensive cities like LA. It’s making smart choices and not falling into the trap of playing keep up or believing you need to always say “yes” in order to be a good parents. Those traps are what makes kids expensive and are completely avoidable. Like Tonya mentioned, there is a lot of Mommy pressure where we live. I manage to avoid it but most of them already think I’m a bit strange because I’m a working Mommy. 🙂 This is probably a good thing since it keeps way too busy to play the game.

  35. I sure hope it’s possible! We’re also in a high cost of living area, but saying “no” to all the toys and stuff is important to us for more reasons than just our finances.

  36. I very much agree with this Holly. I have two kids, and I can I say that all their needs are met without me going broke. I think this topic should be part of family planning and start the communication between parents and kids about money so that kids understand financial matter and help in simple ways.

  37. Great article! You inspired me to write out what we have done to keep day care cheaper. Since I had my first child at 19 and three more since, I have really only known adult working with children. I was always envious of my child less friends but now am thankful as I watch my older friends have start their families. It was so much easier when I was young with lots of energy to give them. Sure we had very little money but you are right, frugality, resale shops, family gifts etc add up. I truly believe no one is ever ‘ready’ for the cost of a raising a child. I get sad that women I know put off having a child because they think they cannot afford it yet. Then sometimes, they wait too long. If you are emotionally ready to have a child you will find ways to make it affordable. Breast feeding and Luvs diapers help cost and I have found in our family at least the grandparents love to buy things! Do not send to private schools and fancy pants day cares. Move to a better school area or work with the schools/available day cares to fix them. Say no to the too ‘many activities that everyone else but your kid’ is doing. Pick their favorite or let them try one at a time. Love is what matters first!
    Thank you so much for this article! I am not alone!

  38. I was born and raised in Indiana and always thought I would leave it. But, despite the constant snow that we have had with no accumulation, this place is great to raise your kids. The hubs and I live in the north suburbs of Indy, the schools are great and the house prices even better. I think the numbers they say are really high, however I am kind of a less is more type parent. I think it is all in what your consider necessities.

  39. Thumbs up for your great post! When I was little, my dad raised me at an average cost of living. I have all the necessary things that I need, but not all that I want. I feel satisfied though and I\’d never ask more than that. I want to agree that you can have kids without going broke, it\’s how you\’ll raise your child. Thank you for sharing these tips, Holly! Much appreciated.

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