How to Raise a Family on a Tight Budget

Whether this is your first parenting rodeo, you’re a pro or you’re somewhere in between, raising a child can be a rewarding, yet pricey, experience. Along with all of the excitement, you’re probably wondering if you can have a baby on a tight budget.

The reality is that the average middle-income family in the United States will spend around $233,610 to raise a child.¹ That may seem like a huge number, but it does cover the cost of most expenses through age 18.

Looking at an itemized list of possible child expenses may help you get a better handle on the expected (and unexpected) costs of raising the next generation. Here are some of those costs, along with ways to save on them:

You may be ready for expenses like a stroller, car seat, diapers and so forth. And maybe you’ve crunched some numbers on how to budget for raising a child. However, many parents are surprised by the first-year costs of caring for their little one. On average, the first year of a baby’s life will cost 4 times more than expected.² The biggest expense? Childcare.

Naturally, childcare costs vary based on where you live and what type of care you choose. But the national average for daycare is about $10,468 per year.³ If that’s causing some sticker shock, think about what you really want in a daycare and take your time deciding. Visit several centers to see what the fees cover. If you’re planning ahead, consider starting a savings fund just for this expense, which could ease the strain on your budget down the road.

Ways to save: If daycare costs are simply too high for your budget, you might look into church-based or non-profit daycare options. Even if you don’t belong to your local church, its daycare may offer the kind of activities you’re looking for. Ask if they follow state rules regarding inspections, staff training and staff-to-child ratios. You might also try your local YMCA or Boys & Girls Club, which may provide activities and programs that suit your needs.⁴

Perhaps you’ve found the perfect pediatrician, but you may be surprised by how often you have to see them. After the baby’s first checkup in the hospital, you can expect to see your baby’s doctor 3 to 5 days later followed by appointments at month 1, 2, 4, 6, 9, 12, 15, 18 and 24.⁵ If you have insurance, you may only need to cover the copay. If not, you may be spending about $95 per wellness visit.⁶

These first-year visits include immunizations and exams, even if your baby is perfectly healthy. There’s a lot of growing and changing happening during that first year or two. That’s why most doctors like to keep an eye on your baby’s development and make sure your child is hitting typical milestones.⁵

Ways to save: Consider setting up a flexible spending account (FSA) through your employer. Because the money is taken out of your paycheck before taxes, it will reduce your taxable income.⁷ FSAs can be a great way to save on income taxes and build a buffer against high medical expenses while raising a family on a budget.

Welcome to the ever-exciting teen years. Beyond the scary stories of slammed doors and challenging attitudes, teens can be a whole lot of fun. From football games to dance recitals, your schedule will likely be filled to the brim. Unfortunately, this may also include unending trips to the supermarket.

If the grocery receipt has you wondering if you’re seeing double, you're not alone. Teens eat A LOT. The USDA offers a cost estimator for food and other expenses to help you stay ahead of the game.

As you balance your food budget, you might include your kids in meal planning. Showing them what food costs, how you choose recipes and even mistakes you’ve made can be valuable teaching opportunities. While they may not learn this in school, it's a practical skill that can serve them well when they leave the nest.

Ways to save: Don’t be afraid to keep meals simple or rely on no-frills recipes. Some go-to meals might include tacos, burgers or sandwiches that use budget-friendly ingredients. On top of that, you can put your green thumb to work with a garden, and let the kids join in. You’ll not only save money on herbs and fresh veggies, but you’ll also have the chance to teach them where their food comes from and how to be a little more self-sufficient.

Youth league sports are a childhood highlight for kids everywhere. But along with all of those after-school hours of practice come real-world expenses that can easily skyrocket. Prices vary depending on the sport, but the average cost for most parents ranges from $100 to $500 per month per child.⁹ Baseball, basketball, soccer, volleyball and softball tend to be the more expensive club sports.

Whatever sport they take to, it’s good to be prepared for the costs. If you’re lucky, their love of the game may lead to college scholarships. In any case, most parents believe simply playing is worth every penny thanks to the teamwork involved.

Ways to save: Consider volunteering or fundraising to pay for club fees and travel expenses. Many leagues will reduce or waive fees if parents volunteer as coaches.¹⁰ You might even bring your child in on the fundraising, encouraging them to earn and save money that pays for their fees. Being part of the process could help them understand the value of hard work, while teaching them an important lesson about money they can carry with them into the future.

If your family is growing bigger, knowing how to live on a budget with a baby is just part of the picture. Saving is also key. Experts even suggest building an emergency savings fund before saving for college. But how much should you save? A good starting point for a 2-income household is to save 3 months' worth of expenses and for a single-income household to save 6 months' worth.¹ It helps to think of these savings as a life raft for your family. If you lose a job or have an unexpected life change, those savings will keep your family afloat until you can get back on track.

Ways to save: When you’re starting an emergency savings fund, set a savings goal for yourself. Once you do, you can set up an automatic transfer each pay period so you can easily get in the habit of saving.

There’s an old childhood fable about a grasshopper who spends the summer relaxing while the ant plans for winter. You can probably guess who’s stocked up with food when cold weather arrives. The lesson? Plan ahead because raising your family on a budget can be challenging. Consider talking to friends or family who have older kids. They’ve done this already and may have really good advice to offer. Hearing different experiences and ideas can be helpful as you’re planning for your future.

Above all, don’t sweat the small stuff. You don’t have to get the latest and greatest of everything for your child. They may not remember the most expensive toy they’ve ever received, but they will remember the happiest childhood moments you spent together as a family.