Are you sure you want kids?

Are you sure you want kids?

Ah, the married life. 

Honestly, things haven’t been much different between my wife and I since we’ve been married for the past three weeks. We were together for a long time before we got married. Like…9 years before, so this whole thing wasn’t much of a surprise to anyone (no judging). If anything, she may like me a little bit more now that I’m legally tied to her and that I also like money.

$$$ Those things bode well for her future. $$$


As a Millennial, I am pretty much right in the middle of the time in life where people start getting married. A bunch of my friends were married right out of high school or college, and I have some other friends that I’m not sure will ever get married. It’s a big deal, and a really freaking cool experience when all of those people come out to eat at your expensive dinner party. However, immediately after you get hitched you will notice that those people start casually and politely asking (especially grandparents and your mother):


The correct answer is to awkwardly laugh and say “not yet”…and hope that they don’t kill you for not making their baby wishes come true. In all seriousness though, it’s a tough proposition for young people in this time of expensive purchases and hard decision making. Nobody tells you that your life will blow up around your mid-20’s. 

When people ask me when we are having kids, I ALWAYS start thinking about the financial side of children. Sure, they are cute and all of that stuff. But…do you have any idea how much those things cost on average from birth to 18 according to CNNMoney? Let me educate you before you go do something foolish. Ready?


Yeah. Take it all in. While I’m at it though, we should probably add on the cost of public college for funsies!


Oh, you think your kids are going to be smarter than everyone else’s and needs a private college instead?


That’s what you get for thinking that your kid is the greatest thing since the last kid that was born.

Mom and grandma might stop asking you about children all the time if they knew how much their babysitting candidate was going to cost over the next 22 years. Now, while I can’t do much to help the cost of the child up to 18 (unless you want to cut back on their food or something…which I can’t officially endorse) I CAN tell you the best options on making sure that you don’t have to finance those college costs later down the road.

Here are my favorite college savings strategies for my friends that already messed up and had one of these little monsters:

1) “Have a kid, buy a condo”. – Greg Rand

I know – not what you would normally think when you are talking about college savings plans. A few years ago when I started getting interested in real estate I picked up a book called Crash Boom by Greg Rand. He tells a story about buying a condo valued at $200,000 when his daughter was born. He intends to sell it 18 years later for around $400,000 and use the proceeds to pay for his daughters college education.

To reap similar profits with the plans that I am about to discuss below you would need to contribute $1,000 per month to whatever fund you choose to invest in…which can range from tough to impossible. In his case, he rents out the condo to cover the monthly costs. If you’re into other creative real estate investment strategies check his book out here.

My favorite thing about the condo plan? If one of your kids gives you the sweet gift of not going to college you have an awesome vacation condo or a BUNCH of money in the form of a real estate investment. Win-win.

2) 529 College Savings Plan

This is easily the most common college funding plan, and for good reason: the tax benefits are awesome. Your money grows tax deferred, AND the funds can be used tax free towards your child’s education expenses. In addition, you can contribute a LOT of money towards the fund annually (up to $300,000).

The downsides? Distributions that are not used for education are penalized at a rate of 10%. Also, you could be limited in the types of investments you can make within the account. Here is a really detailed breakdown of 529 plans.

My favorite thing about 529 plans? If you have multiple kids, you can also name them the beneficiary of the fund and avoid the penalties on what’s leftover in the account. Also, those little money grubbers (kids) don’t have access to the cash and you don’t have to give it to them after they grow up.

They can have your money when you’re dead.


Honorable Mention: Coverdale Education Savings Account (ESA)

You’re probably thinking…huh? Basically, a Coverdale ESA works very similarly to a ROTH IRA. You can contribute money, grow it tax-deferred, and have no taxes taken out when the funds are distributed for education expenses. It’s low on the list and an honorable mention because the contribution limits are low ($2,000 annually) and the funds are distributed to the kids if they aren’t used for education expenses.

My favorite thing about the Coverdale ESA? You have more investment options within the portfolio than a 529 account. Go here to find out more about Coverdale Education Savings Accounts.

If you are newly married like me and are thinking about kids in the future, make sure you plan for their college costs so you don’t have to finance them later. The only people that can break the student loan debt cycle are the Millennials at this point..and it’s not like we are doing a great job. Don’t assume your kid is going to be smart, get scholarships, or become LeBron James and make you rich. It’s not happening people.

 Live differently, your bank accounts will thank me later. ~M$M


Child Cost Sources:


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30 comments… add one
  • Patrick Jun 1, 2015, 1:07 pm

    Definitely some good things to think about. However, I have always had some trouble with such a broad umbrella number regarding the cost to raise a child for 18 years. Based on $245k divided by 216 months until legal adulthood, that would mean that my current monthly spending would have to increase by over $1130 a month to support said child. For the average consumer that spends everything they earn, sure they might acquiesce to an extra $1130 a month. However, I think most savvy millennials could easily raise a child for less.

    Long story short, I wish these umbrella numbers would break down and show you the details behind their calculations. If it just comes down to spending, I really doubt it’ll cost me an extra 245k. However, if they also factor in loss of income from my wife going part time, which would also mean losing employer match 401k, health insurance, etc., I doubt that 245k is anywhere close when you factor in 18 years of compound interest on all those expenses.

    • Millennial Money Man Jun 1, 2015, 8:16 pm

      Hey Patrick – Here is one of the source articles I used from CNN Money for the number. If you go down to the picture in the middle of the article there is a summary of the costs:

      Here is another that compares costs from the past and now, and gives some breakdown and detail on where that money is going:

      This one from USA Today has a pie chart to show the breakdown on expenses:

      Hope that helps!

      • Lindsey Jun 5, 2015, 9:33 pm

        I agree with Patrick in that us savvy millennials can find a way to decrease this cost. For instance, I am 25 married and have a 2 yr old and a 10 mnth old. Simply put, I coupon for everything they need. I honestly never buy them new clothes at full price. Why would you spend $18 on a 9M pair of pants that the babys seriously only going to wear for a month before they become extremely worn/stained or not even fit into anymore. I buy everything either second hand or on clearance, like 60-70% clearance. Also, family and friends buy the kids clothes too, some are actually hand me downs from their kids. My sister just had twins and she makes her own baby wipes, it’s really easy to do and extremely cost effective. She also uses cloth diapers, which you just wash without washing your $ down the drain. She even makes her own laundry soap, but she’s been doing that since before she had the twins. Another thing I’d like to add, is that you walk into the baby retail stores and there’s so many products to choose from you actually believe you need all of them…not true. There’s play pens, cribs, changing stations, high chairs, strollers, walkers, swings, jumpers, and the list goes on and on. In all honesty all we found out that you truly ever need is 1) A crib and there’s a 3 in 1 where it goes from crib to toddler bed to twin bed 2) A Carseat which Graco makes an All in One so you only have to buy one for their entire car riding years 3) A swing or bouncer, we had a swing for the first but a bouncer was easier for the second 4) A playpen, which is debatable, but we did some traveling with our 1st 5) A stroller, which if you know you’re going to have more than one I would just go ahead and get a double, you may look stupid at 1st but it’ll save you $ in the long run, we got a front and back instead of a side by side because it had a removable seat that faces us for when our 2nd was still a tiny infant 6) A high chair or a seat that straps to a chair, and you dont need this until they’re 6 months old and can eat food and we bought one that again, you guessed it, is a 3 in 1! It’s a high chair that rolls around the floor and a booster seat for our oldest, OR you can have the high chair change into a childs seat that will roll around the floor while the high chair gets strapped to a regular chair and lastly 7) A potty seat ring, it’s portable unlike the actual seat. I believe we only spent $1300-$1500 total on our two kids for those items. You dont need all that other mess, you wont use it and I wish someone would’ve told us that before our 1st. Plus, a few items other people will buy you, better yet, if you just ask for gift cards at your baby shower, you can combine them all and buy those items on your own. Diapers, we just bought 2 huge economy packs from Target for $10.50 total thanks to couponing, it’s going to take them a good 2 months or so to get through those. Breastfeeding is free, if the wife can do it, it’s rough, but we had to supplement so we have to buy formula about once a month or so which with couponing only costs us about $20 for a big container, sometimes cheaper, you can sign up with that company and they’ll send you $ checks to use as coupons in the store to lessen the cost, plus you can get printouts at the register sometimes for the next trip. Thanks to Obama breast pumps are free through most insurances (About the only thing he got right). Baby food, again we coupon for, so sometimes we can get those for just a few pennies. You can also make your own baby food if you use a blender or a nutribullet, very cost effective because you can put them in the freezer and thaw when ready. So, just some things to think about before you totally freak out about what everyone says is the cost of a child.

  • Alyssa @ Generation YRA Jun 2, 2015, 11:22 am

    Already started saving for future tuition costs, but need to dig in deeper to setting up a 529 plan. Definitely seems like the way to go. Great example and idea of purchasing a condo to finance tuition costs! I also had a few friends whose parents bought a house to have their kids & friends live in throughout their undergrad. They sold or rented out after hey graduated to recoup costs of tuition. Risky, but an interesting way of approaching college living & finances.

    • Millennial Money Man Jun 2, 2015, 9:02 pm

      529 has a lot of attractive tax benefits. I also have a friend that bought a town home for his daughter to live in during college; I’ll have to double check to see how well he did on that investment. (If memory serves I believe he came out well on it compared to paying rent for dorms).

  • David of The Debt Free Guys Jun 2, 2015, 11:41 am

    I am a little cautious about the idea of buying real estate when your kid is born. Unless one is paying for it with cash, the first 15-20 years are the years that one pays the most to the banks in interest. Even if the value of the condo appreciates significantly, the cost to own may be prohibitive. Although, if you can rent it to cover all of your mortgage costs, then let someone else pay the bank interest. (A $200k house financed at 3.5% for 30 years ends up costing over $323k just to buy.)

    • Millennial Money Man Jun 2, 2015, 8:59 pm

      It’s a little out there, but I think it’s creative and like the alternative. In Greg Rand’s example he was renting it out to cover the costs, so essentially someone else is paying into his child’s “college fund” for him. You DO have to decide if being a landlord is too much trouble to deal with.

      • Edifi Jun 14, 2015, 9:49 pm

        Yeah, you’d have to run the numbers and determine the value of real estate against a nice 529 plan. If you don’t know enough about real estate to run some solid numbers, and know the inherent risks associated, it’s probably not a good idea.

        • Millennial Money Man Jun 18, 2015, 9:38 am

          Totally agree. I started researching RE investing about a year ago…there is SO much to learn before you jump in. However, it works well for plenty of people. The bottom line is basically to do SOMETHING. Any type of investment to offset future college expenses is a great idea. Don’t count on free college or future loan forgiveness as a way out.

  • Gwen Jun 4, 2015, 3:00 pm

    I don’t think you should flat out say, don’t have kids. Maybe it’d be better to say, don’t have kids until you’re ready. Ready can mean financially ready (no debt, firm foundation of retirement savings) or relationship-ly ready. Too often, I see my friends getting married and then they have a kid right away, which takes away from their couple experience and adds to the stress. One of my friends got married, and they were already divorcing by the time their baby was born/first wedding anniversary rolled around.

    I’m a millennial on the road to Financial Independence, and barring some act of God, I will be waiting to have kids until I’m married and are at least 2 years into the marriage. Considering I’m single at the moment, that won’t be for a long time 🙂

    • Millennial Money Man Jun 4, 2015, 4:32 pm

      Haha, thanks for the tip…but I kinda doubt anyone will actually avoid having kids because of this blog post. I just want people to know how much those little rug rats cost (on average)!

  • Max Jun 5, 2015, 12:58 pm

    Another note on the Coverdale ESA- it doesn’t have to be used just for college. It can also be used to pay for private grade schools and high schools. So if you have a scenario where the public schools where you live aren’t the best option, you have a way to save tax free for an alternative.

    • Millennial Money Man Jun 5, 2015, 4:22 pm

      That’s really interesting…does the same apply to a 529? I had only thought of these from a college standpoint.

  • Ashlee @ Save Money, Dammit! Jun 10, 2015, 9:21 am

    We’re newlyweds and often get asked the “when are you going to have all the babies?” question (insert eye rolls, awkward shrugs). Neither of us is in any hurry to have children, not only because they are expensive in a traditional “here’s all my money” way, but more importantly (and seemingly less discussed), they’re expensive in other, non-financial ways. Kiddos are emotionally expensive, time-consuming, and taxing on a marriage. While people seem to disagree with the exact cost of having children, kids cost extra (no matter how much or little you spend, that’s still more money that’s not being saved, invested, etc).

    • Millennial Money Man Jun 18, 2015, 9:41 am

      Yes! It’s funny how many people hate that CNN average or don’t believe that it is possible to spend that much on a kid. The main point is that they are expensive, and it would be good to have a plan before you jump in. We are going to wait a while longer. Being young without kids is fun. 🙂

  • Financial Samurai Jun 26, 2015, 12:32 pm

    I’m on the side of adopting kids as there are some 180 million kids without homes. Crazy huh?

    Too bad the governments make it so hard to adopt!

  • Vic @ Dad Is Cheap Jun 26, 2015, 5:14 pm

    Hey, great article.

    I only started getting obsessed with personal finance after my daughter was born (she’s 14 months) so I actually feel richer now that I have kids! I honestly was pretty clueless on where our money was going beforehand. As long as our checking accounts were positive that’s all that mattered to me.

    Now we’re thinking about a second kid and now my money mind is worrying about where the money is going to come from. I think in the end if you want a kid (or kids) bad enough, you’ll figure out a way to make it work. There’s people that make a lot less than us that have more kids and they seem to manage. Trust me, there was a time where I never wanted kids. But now, I can’t imagine life without my daughter.

    Regarding college, our current plan is to fund a 529 plan as much as possible and hope that our kid gets some scholarships along the way. Currently we put about $250 a month into it which I know isn’t enough to fully fund college. Anything that the college savings and scholarships don’t cover I want my daughter to be responsible for – preferably by getting a job and not having a huge college debt.

    One thing that’s a must with a 529 plan is to be sure to setup gift giving. So anytime an event comes up for your kid (birthday, christmas, etc.) you could casually mention the plan or include the link on the invite. I honestly didn’t want a birthday party for my daughter’s first birthday because I felt like it would be such a waste for something she wouldn’t remember, but in the end it was worth it. We ended up spending about $500 on her birthday party but got back $800 in 529 Plan donations!

    • Millennial Money Man Jun 27, 2015, 1:02 pm

      Thanks! I’m in the “no kid” phase right now, but I’ve had enough people tell me that it will change to believe it. That’s really cool with the 529 plan; I’ll definitely keep that in mind when I get there.

  • Caitlin Nov 10, 2015, 10:42 am

    Oh kids!

    I gave birth to my daughter just over a month ago and my, how life has changed. The numbers cited seem a little high. Being numbers obsessed like everyone else here, I did some research on how to save $$$ during the baby’s first year. All of the solutions have a time cost, but the economic cost is worth it for me.

    – Adjust your insurance before getting pregnant. I was in a high deductible with a HSA. Know what is and is not covered. Adjust accordingly.

    – change your tax documents when you discover you are pregnant. I think it’s the w4. Add your new little dependent and save the “extra” money during that tax year. Do not spend it. If something (God forbid) happens to the baby, and you lose the child, you still have the money you will owe in April. If you have a happy, healthy baby and birth (hurray!!), you have that little nest egg ready and waiting.

    – Ask for a discount or what discounts are available from your birth provider. I started at a birthing center that wasn’t covered by my insurance. We ended up negotiating an out of pocket cost that was lower than what an in plan birth would cost. When we transferred to the hospital, I knew exactly how much it would cost. And yes, the epidural was worth it. 😉

    – Cloth diapers save tons of money. And tons of garbage space. Newborns go through a ton of diapers (the average here is 7), so we are using disposables from Costco (also super cheap!) Until the baby slows down on the digestion. I bought cloth diapers from EBay and (in theory) diaper my daughter and any future children for the initial cost. I spent $200ish for 30 cloth diapers. There are tons of cost analysis spreadsheets out there. Google away!

    – join mama groups or virtual kids garage sale groups on Facebook. You can often get kids stuff at a major discount – or free!

    – use the library for kids books, parenting books, and cultural passes.

    – see if your community participates in Dolly Parton’s book giveaway. Every month, a new book will be sent to your child. I hadn’t heard about it until I moved.

    – pull out your blender. Baby food costs $.50-1 per serving . Mashing up bulk peas, carrots, and bananas and freezing portions in an ice cube tray is an easy way to save $.

    – give your kid the gift of boredom. Remember how big cardboard boxes were the coolest thing when we were kids? they became rocket ships, little houses, and half a million other things. We don’t have to outsource imagination by buying the latest and greatest toys.

    Another way to save pretty painlessly is to save up $20 a week for your child’s college fund. That’s only around 18k by the time they hit their 18th birthday, but that gives them a head start. If college isn’t t their thing, trade schools and starting their own business are always strong options.

    I hope my daughter does what I did – work, study, and test out of a lot of college. That plan let me graduate debt free in three years instead of four. And if she decides to skip college for a bit and become an electrician or a hair stylist? I’m cool with that too. There’s always time to go back to college after you start making your own wage.

    Okay, that’s pretty much a blog post. But it’s all fresh on my mind, so I gush. 🙂

    • Millennial Money Man Nov 10, 2015, 3:41 pm

      Welp, you win the commenter award for this post hands down (so far) :). It’s funny, when I wrote this post I had just gotten married. Now, even just a few months into the married life my view on kids has changed a TON! Maybe marriage puts life into perspective more than I thought it would? Still not planning on having one any time soon, but a lot of the stuff I wrote on this one is pretty hard to go back and read.

      Love your suggestions, thanks for sharing! (This could be a cool future M$M guest post if you’d like).

      • caitlin Nov 10, 2015, 11:44 pm

        It’s funny how marriage changes things.

        I’d love to do a guest post. Just email me in a month or two when I’m not sleep-deprived. 😉

  • Alice @ Earning My Two Cents Mar 23, 2016, 11:42 am

    Hey, congratulations on getting hitched! My husband and I also dated a long time before getting married (8 years) and we are expecting our first child this year about a month before our 6th wedding anniversary. We are also broke. My husband is finishing his last year of being a full time student and we debated for years about a) if we were emotionally ready to become parents, and b) if we were financially ready. From my research (talking to my friends), there’s never really a hard “yes” answer to either of those questions. But we eventually decided that the time had come and we wanted to stop putting off Parenthood since the major obstacle we kept coming up against was money so that meant we must be emotionally mature enough or something. Children cost a lot over time but it’s the immediate costs that we were most concerned with, like diapers, daycare, and maternity leave. We ran the numbers and decided we would find a way to make it work, so that’s where we are at. College savings is way off in the distance (I mean, I gotta get this kid birthed first). But we know that we plan to save for their education because it is a gift that my parents gave me and I want to pass that on. Otherwise, college costs didn’t factor into our decision making.

    • Millennial Money Man Mar 23, 2016, 12:48 pm

      Thanks! My wife and I are getting closer to make the jump too – I’ve grown up a bunch since I wrote this post haha

  • Ms. Montana May 12, 2016, 9:36 am

    Kids affect the budget in weird ways. Our house is much bigger than we would need if we didn’t have 5 kids. But we planned for that, and were able to pay cash for it. Not having a mortgage is a HUGE help in our budget. And a big part of the reason we can take a year off from paid work. Like most things in life, if you plan for the things that are important, you can find creative ways to make that happen.

  • Melissa Nov 10, 2016, 2:25 pm

    My husband and I ha two kids through grad school and graduated with less debt than all other couples or even single people in the same program. About 50,000 less. We also did not have any help from friends or family. Kids are not that expensive and you can be frugal with them.

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