This is the Best Way to Save Money While Raising Children

It can be incredibly difficult to feel like you aren’t giving your child enough because someone else has given their child “more.” But in many cases, “more” isn’t necessarily better. 

father baby drinking cereal from bowls

It’s no secret that kids are expensive.

In fact, the US Department of Agriculture says that a middle-class, married couple with two children can expect to spend $233,610 on each of those children from birth to age seventeen. That’s an intimidating number. While spending will not be equal every single year, it averages out to about $13,742 per year—on each child.

You’ll be relieved to hear that 26%-33% of that number – or $60,738.60 to $77,091.3 – can be attributed to housing. Housing is one thing you have a lot of control over. We all want to have enough room for our kids in a nice house in a good school district, but there are ways to do that without sacrificing your financial future.

Evaluating Space

When I was expecting my youngest, we scrambled to look at newer, bigger apartments. We thought we “needed” more space. When we saw what was out there in our desired price range, we were dispirited.

The average size of a home has gone up by over 1,000 square feet since 1975, when it was 1,645 square feet. Today, that number is 2,687 square feet. At the same time, the average household size has gone down from 2.89 to 2.53 people per household.

Smaller families are living in bigger houses. It’s enough to make you question whether the desire for that extra bedroom is truly a “need”—or if it’s just a culturally normative “want.”

Our family found that the space we were living in was enough. We didn’t need to move. After my youngest child was born, they shared a room with us for a while in their own crib. Eventually, they moved in with their sibling.

Our living room—AKA play space—is just as large as it would have been in another apartment. While it would be nice to have another bedroom, it’s not something we need to function as a family or individual human beings.

Rent vs Mortgage

Traditionally, a mortgage has been viewed as a way to build long-term wealth. After the Recession, public opinion on that concept shifted.

Renting does come with some financial benefits. You don’t have to directly pay property taxes, though the expense may be figured into your rent. You typically don’t have to supply your own appliances, and should the property need maintenance, you won’t have to foot the bill.

However, the renters’ market has been affected by the Recession, too. With an increase in demand from a growing pool of renters and a nationwide shortage of affordable housing, landlords are able to raise rental payments—so they have.

Each housing market is going to be different. Evaluate yours to figure out which is truly a better long-term financial move. Take into consideration:

  • The potential for increased rent, and the likelihood of home values rising in your specific geographic area.
  • Maintenance costs of maintaining your own property.
  • Property taxes and various insurance policy premiums that come with homeownership.

Differing Tax Rates Within School Districts

A major reason families end up paying more for housing is to get their child into a good school district. Properties in good school districts tend to be more expensive.

You can’t do much to change property values, but you can look at a modest home within your desired district. If you’re purchasing, remember to compare property tax rates within your school district.

For example, in the Commonwealth of Pennsylvania, there is usually more than one municipality in each school district. Each municipality has different property tax rates. By shopping in one of the lower-taxed municipalities, you can stay in a good school district while cutting the portion of your monthly payments allotted for taxes.

Don’t Compete with the Joneses

It can be incredibly difficult to feel like you aren’t giving your child enough because someone else has given their child “more.” But in many cases, “more” isn’t necessarily better.

While the desire to live in a good school district is a worthy one in this writer’s opinion, that doesn’t mean you need to have the most space. It doesn’t mean you must own your home in order to be a good parent.

Don’t go chasing more expensive housing because you need to prove you’re a grown adult and capable parent. You are already both of those things.

Keeping up with the Joneses hurts your overall budget, and that’s worse for your child than sharing a bedroom.

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