Major Costs of Kids: The Financial Side of Parenting

You don't need to spend a lot of money to be a great parent. Kids are big business for retailers, but many of the expenses associated with children, and babies, in particular, are optional ones. However, while your infant will thrive whether clothed in discount onesies or designer baby wear, older children do mean bigger expenses. Quality of parenting does not correlate to your disposable income, but at least some of the major expenses below are ones you may want to prepare for.

Child Care

Few parents are lucky enough to have grandparents or other relatives who are happy to spend a significant amount of their time on childcare. For most other families, parents will face a choice between one of them staying home with young children or paying a great deal of money for childcare. Some parents choose to continue working even if one parent's salary essentially only pays for childcare because there can be other hidden costs to staying home with children, including falling behind in career advancement and putting away money for retirement. Every family will use different criteria to choose what is right for them, but whatever that choice is, this will be a significant expense.

Enrichment Activities

Children need unstructured time, but ideally, they will also have the opportunity to pursue their interests, whether they are sports, music, art, or something else. They might want to go to summer camp or take a school trip that comes with a fee. Some of these activities might simply be financially beyond reach depending on the family's financial situation. Still, parents should try to be prepared to provide for at least some of them. These activities can also be an opportunity for children to begin learning monetary responsibilities, contributing from their allowance or a part-time job once they are old enough to have one.


One of the biggest expenses young people and their parents face is the cost of college. There are many ways for parents to start preparing for these expenses when their child is young, including creating a 529 savings account. However, even when parents have some savings for their child's college, it usually needs to be supplemented with loans, grants, and scholarships. The good news for parents who are not able to put any of their own money towards college expenses is that they can still help their children finance education by cosigning on private student loans. This offers a guarantee since young students generally do not have enough of a credit record to get loans on their own.

Cost of Education (Source: © Elya1000 |

Expenses in Adulthood

Parents are not obligated to help their children with wedding costs or a down payment on a home. However, traditionally, most parents help with the former, and assistance with the latter can be a significant financial boost for young people. The key for parents in this situation is not to sacrifice their financial security to offer this assistance. Many parents with children who are young adults may be dealing with some financial worries of their own, such as divorce, unemployment or caring for their own parents. However, parents who are in a good position financially could offer a lot of help to their children in this way.

Author Bio

Drew Allen is a financial enthusiast, seasoned blogger, music, and sports fanatic. He enjoys spending time outdoors with his wife and daughter, fishing and boating. He is dedicated to his 15+ year career in the banking, mortgage, and personal finance industry.