How to Save Money Raising a Child

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With the average cost of child rearing at $245,340, you need to know how to save money raising a child. Insurance, housing, clothing tips and more.

The average cost of raising a child to age 18, as of 2013, is $245,340.  Or $304,480 if you adjust for inflation.

Is that the last year that data was available?

Using those numbers, I should have spent $88,600 as a mother by now.  But I haven’t.  Not even close.  Ballpark estimate is less than a quarter of that.

A lot of our focus has been on building income over the past years.  But I’ve been taking stock lately and realized that we do live a pretty frugal lifestyle on top of that.  I guess we always have, and once we had kids we kept on with that way of thinking, even with additional mouths to feed.  We’ve saved or forgone spending at all, and it’s paid off for us big time.

Without further ado, here’s a list of how to save money raising a child, brought to you by La Maison du Frugality:

1. We haven’t upgraded our living space.

The number one contributing to factor to that huge, average number is housing.  It makes  up 30%.  When we first moved into our apartment, it was just the two of us, and it was moderately spacious.  Now, with kids, it’s not.  We share a room with one of them, in fact.  It’s not ideal, and it’s not always comfortable, but we’re used to it.  I want to change it, which is why we’re saving up to buy a home, but with rent increases in the area lately, after we have that initial down payment we won’t be spending a ton more than our current rent.  There’s a little bit of justification behind that statement, as we will have to start paying for extra utilities and  house maintenance.  But by not moving to another rental while we save for our bigger goal, we’ve saved about $500/month based on the market in our area.

2.  I had killer insurance while pregnant.

I haven’t been insured the entire time my kids have been alive, but I was lucky enough to be covered and have great insurance while I was pregnant.  And my kids have always been insured.  On top of good insurance cutting down drastically on out-of-pocket costs, from pre-natal appointments to delivery room (though those aren’t included in the $245,340,) I also made sure I took advantage of every facet of my insurance.  And I mean every facet.  I was able to get a lot of those expensive things my kids needed in those early days via insurance instead of out of my own pocket.

3.  We don’t pay for childcare.

A lot of this is due to my husband’s good relationship with his bosses at work, ability to set his own schedule there, and the ability to set his own schedule at school within reason.  For the most part, when he works, I’m home and visa versa.  But there are still occasions where our schedules overlap, and we need help.  He’s from the area, and most of my family stuck around, so we have baby-sitters galore who are generous enough to help out with the kids when we need it at no cost.  There are certain advantages to staying in your hometown.

4.  We don’t spend a lot of money on clothes.

My oldest recently and suddenly outgrew all their clothes.  My husband was freaking out, saying we had to go buy an entire new wardrobe.  I took him into the bedroom and opened the closet.  I pulled out a bag full of the next size clothes, designated for summer.  There was a whole other one for winter.  We didn’t need to go shopping.

So we don’t spend a ton of money on clothes.  Turns out we have a fair number of friends and family members with kids slightly older than ours, and we’re not afraid of hand-me-downs.  For those times when we don’t have something we need given to us (which is awesomely generous of our friends and family, by the way,) we head to the resale store and get $1 jeans or $7 brand-name sneakers.

5.  I know how to sew.

I do know how to sew.  My skills are remedial.  But they’re enough.  I’ve been able to mend clothing instead of tossing and replacing.  I’ve been able to stitch up stuffed teddy bears and giant turtles.  For the clothes that are too worn to resell or pass on, I save them up and use them to make blankets and quilts.   Fixing is almost always cheaper than replacing.

6.  I seek out free kids’ entertainment.

Summer is especially awesome for free kids’ events here in Pittsburgh, but there’s really something going on all year.  I’ve used library events year round.  In the fall there are RADical Days where you can do seemingly everything in the city at least once for free.  Because one of us or the other has been a student for most of the time we’ve had kids, we’ve been eligible for attraction discounts or freebies either from the venue itself or through the student life office.  If you look around, there’s almost always something to do for free.  Even if you can’t find an “event,” kids are down for anything if you’re excited about it.  Going to the park has never failed to disappoint mine, and on rainy days, the indoor playground at your local mall can do wonders as long as you don’t get sucked into any unplanned shopping while you are there.


So those are the top six ways we’ve saved or avoided spending at all, and spent considerably less than the $88k+ we should have.  What are some of yours?

19 thoughts on “How to Save Money Raising a Child

  1. Hannah

    I’m always surprised that the incremental value on home/transit is $100K per kid. When we have several kids, I believe that we are likely to upgrade our space if temporarily, but there’s no need to buy a huge house that will only be nice from the time your kids are teenagers and living at home.

    We spend a ton of money on childcare, but outside of that, we have raised our son for around $200-300/mo so far.

    1. femmefrugality Post author

      If you do upgrade, at least make sure it’s a ranch for those golden years of oversized-home, limited mobility bliss! Amiright?
      We’re crazy lucky with the child care thing. Kudos to you for keeping things so low! I knew I was by no means alone, but I love connecting with others of the same mindset.

  2. seattlegirluw

    We don’t have kids, though we’re going to try one last time. Assuming it’s successful, we’ll try to be relatively frugal. I don’t see the need to go out and buy a bunch of new clothes for a baby when thrift stores (and doting grandmas) will provide plenty. I also don’t think little kids need nearly as many toys as we end up giving them.

    We already have a very affordable mortgage on a three-bedroom home, so that won’t require upgrading.

    I’m not sure how my insurance will play out. Prenatal is fine. But I’m on Medicare, so the kid will need his/her own policy bought out of pocket. That’ll add up.

    My in-laws live in our guest house, so we have built in childcare.

    I’m really impressed that you avoided the urge to upgrade to a bigger place as soon as it become inconvenient. That’s more than most of us would do.

    1. femmefrugality Post author

      First of all, best of luck this round! I know that’s such an emotional, unfair journey, and I truly do wish you the best. It sounds like you guys will be pretty well set up. Depending on income, I’d check out Medicaid or CHIP for the kiddo. The limits are higher than they are for adults, so that can really help out on the insurance end of things.
      We talked about upgrading, and then life got really busy. It was a lot of money, so as time got closer we decided it was worth the little bit of sacrifice. Mostly because of the money, but also because moving is dang inconvenient if you don’t have to. I’ve done it enough in my life to be kind of sick of it. Haha.

  3. Andrew@livingrichcheaply

    We definitely don’t spend much money on clothes or toys. We got a lot of hand me downs which are in great condition since kids outgrow clothes so fast. And my wife also shops the clearance racks/sales/thrift shops…same for toys. Our son is still young and doesn’t ask for specific toys yet which is great.

  4. middle_class

    I didn’t know that they count housing as part of “cost of raising a child”. If so, no wonder the amount is so high. Does this mean when you do eventually move to a house, then you will count that increased cost as part of childcare, or a certain percentage of your mortgage and increased utility bills?
    I clicked over to your article about taking advantage of every facet of your insurance and that was helpful, too.

    1. femmefrugality Post author

      I’m assuming the latter, but that report gets pretty detailed. It is absolutely crazy. I’m glad that was helpful! It was such a big deal in helping us out in those early days of parenthood.

  5. Jason

    We bought a new home for our family which I was initially against doing, but now I’m so glad we did, as we get tremendous value from it. We could definitely save a huge amount of money if we stayed in our old, smaller house, but we’re more than happy to pay the premium. Otherwise I think we’re doing OK with the other 5 categories 🙂

    1. femmefrugality Post author

      I hear you on that. I’m looking forward to potentially upgrading, too. Just delaying that gratification for a minute here while we save up! Sharing a bedroom with a kid is doable, but not always enjoyable.

  6. SavvyJames

    A good way to keep costs down with kids is to not get in the habit of buying them ‘stuff’ whenever you are out; a toy at the store or a snack at the supermarket. Too often parents use such purchases as a means to quiet a child down or temporarily distract them. Not only do those costs add up, but in the case of the snacks – typically sugar-ladened – they are detrimental to physical health.

    1. femmefrugality Post author

      So true! Just because they want does not mean that they need (or that it’s even good for them at all!)

  7. kay ~ the barefoot minimalist

    I always laugh at those numbers they throw around. It’s like wedding and funeral estimates. They’ve GOT to be kidding, right? 😛

    Great child rearing frugal hacks, Femme! Common sense is not a lost art in your household. 🙂

    1. femmefrugality Post author

      Yeah, I 100% don’t get it. The wedding numbers…I can see how it adds up quickly. You have to make some hard choices generally or get swept away in the insanity. But kids costing that much? Craziness. I’d never be able to afford them if they did.

  8. Alexandra @ Real Simple Finances

    That number is ridiculous! I love the ways you save money, though. I feel like since getting pregnant I have had a *ton* of freebies offered. We also have a friend with two children who has been offering us all her hand-me-downs, so hopefully I’ll be able to do what you did and whip out a bag whenever baby hits a growth spurt. 🙂

  9. Prudence Debtfree

    It’s so true that little children don’t need fancy events. I miss those days of big excitement when we were going to the park! or the beach! or Haley’s house! I don’t know exactly when the transition takes place, but I think it’s when they start to realize that all of their friends have gone to Disney World. Enjoy these years! And I’ll look forward to reading your strategies when the next stage comes : )

  10. Revanche

    I wondered why those numbers were so high! I didn’t know housing costs were included.

    We’re about halfway into our first year but even if we were to take that number and divide evenly by 18, we have spent nothing like half of that approximately $13K yet. Though I expect that the costs will rise steeply when we actually find reliable childcare, and when ze has to go to school.

    I’m with you on refusing to upgrade our living space as long as we can but Bay Area housing prices pretty much guarantee we won’t be doing that for a long while 🙂 I’m taking a weird stand against doing a jumbo loan which means we need a minimum of $700K cash in hand when we buy. (hah… hah… hah…) Eventually, though, we’re going to have to do that school district/schools evaluation and see what we can do about moving :/ I’m saving while we can.

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