Financial Independence and Children

Achieving financial independence is an admirable goal, but is it possible to achieve while raising children and navigating the many financial decisions we make as parents?

The USDA suggested that the cost of raising a child to the age of 18 is as much as $233,610 in the year 2015 and doesn’t include college education. Housing, food, and childcare are the top three categories that drive that value. One takeaway from this study was that the higher the income for a family, the more money was spent on the child. The cost also increases as the child ages, and if you lived in an urban area versus rural due to increased housing prices. In addition, the more children you have, the lower the cost per child as you can reuse and buy in bulk.

I found a tool on CNN that allowed me to calculate the cost to raise my two children based on where we lived, number of children, our income level, etc. Based on this, the price for us to raise both of our children to age 18 is approximately $560,160, as shown in the chart below.

This projection is slightly higher than the estimate provided from USDA, and can quickly show how details unique to your family can change how much you can expect to pay. So what does this mean if you are trying to achieve financial independence, and you need to save approximately half a million dollars to support your children?

If I reduce my expected income in the calculator to the lowest amount, suddenly the expenses to raise two children drops below $300k versus the initial $560k. I can’t speak for the information used to build this calculator, and was interested to see that the overall category percentages stayed about the same, but the overall expense was dialed back accordingly. So let’s talk about each of these areas and how we can support our goal of financial independence by embracing a minimalist mindset and challenging how much we truly need to raise our children in society today.

Childcare and Education

So far, my experience with childcare is that it is expensive, but I’m lucky to live in a rural area where the costs are much lower than they could be in an urban area. We spend about $140 per week, per kid. 52 weeks a year, this adds up to $14,560 annually for both of our kids. Like I said, we’re very lucky because many areas of the country, these costs can exceed $1200 monthly per child, which would double the price we currently pay. From the calculator I found, this expense was projected as $68,640 for our two children, which would only provide about 2.5 years of childcare if the cost truly was $1200 per month. If you have achieved financial independence, the price of childcare is significantly reduced since you may no longer be working, however if you are saving to achieve financial independence, this could be a huge hurdle. What are some of the options to consider as you are still working your full time job and want to save to achieve independence?

  • Is there a family member willing to watch your children part or full time?
  • Do you have a friend who is watching their children already and may be willing to watch your children for a lower price?
  • Does your employer/insurance offer a dependent care flexible spending account?
  • Would moving to a different location provide options for lower cost childcare?
  • Can you negotiate with your employer to work from home part time and keep your children home with you?
  • Can you negotiate a lower price if you have multiple children attending the same daycare?


Housing can also drive up the price of having children, especially if you upsize to a larger home so children have their own rooms. Depending on where you live, this could be very expensive. Personally, I find if difficult to see how housing is expected to increase by $128,160, but I’m interested in your opinion (comment below). When my husband and I purchased our home, we bought a small 2 bedroom home. We knew we were planning to have 2 or 3 children, yet we still pushed to keep a smaller house. A good friend of mine and her husband lived with their two children in a two bedroom apartment, including her father-in-law. While the living room doubled as their bedroom and their baby’s crib sat at the end of their bed while their daughter had the second bedroom, they made it work and enjoyed evenings piled on mom and dad’s bed to watch TV. At a certain age room sharing can be a challenge, but as someone who was comfortable sleeping on the family couch, there are always options. My husband and I were determined to push for a smaller house (or at least I was), and we’re making it work so far and enjoying the benefits of our 2-bedroom home. Some would argue that purchasing a home in a good school district could also drive up the costs of a home, but we found ourselves valuing this trait in a home regardless of whether we had children simply because it would help the resale value.

  • Do you find yourself using children to justify buying a larger home?
  • Can you downsize to a smaller house and have children share a room?
  • Do you like to have a guest bedroom? If so, could your child’s room serve as a guest bedroom and they sleep in the living room while you have people staying in your home?


At about $100k for two children, this tool suggests that our family is spending $53 per week on each child. My children are young, but there is absolutely no way that we are spending an extra $106 per week on their meals. Even as an adult, the budget I lived on with under $1000 per month was about $35 per week. It may not have been the healthiest of meals, but eating healthy doesn’t have to be expensive. When you are already cooking meals for your family, it is easy to expand these meals to cover additional children. This USDA study suggests that up to 30-40 percent of food is wasted in the average American family. Many times as busy working parents, we jump to costly convenience and takeout meals to feed our families after a long day. Is it possible that poor planning or convenience is costing us even more when accommodating children? While we may buy more food for our growing families, I would question whether children can help us eat food before it is wasted and also encourage us to eat home more. For our family, we spend less money going out to eat versus when my husband and I were solo and went out to eat at least once a week with alcoholic beverages increasing our bill. For the last 5 years, I’ve used the emeals app that plans cost effective meals for my family and cuts down on the time I spend planning and shopping for my meals. Since the pandemic, I’ve appreciated how this app works well to have my groceries ordered for pickup from a variety of store options.

  • Do you go out to eat frequently, adding to your food expenses?
  • Can you share meals with family members or take advantage of water or other lower cost options?
  • Do you plan means when you do your weekly grocery shopping?
  • How much food does your family waste each week and what can you do to minimize that waste?


$98,940 is the estimated cost for transportation when you have two children based on our criteria. Similar to food, this suggests I’m paying approximately $50 per week per kid to provide transportation for them. Prior to the pandemic, I was a guilty working mom wishing I could spend more time with my son. This resulted in me spending a minimum of 30 minutes driving an extra 20 miles so that I could be the one to drop my son off at daycare in the morning. Meanwhile, my husband worked only a few minutes away and could easily cover drop off or pick up if I could get over my serious mom guilt. Meanwhile, when my parents raised me, I took the bus to school and walked 1-2 miles daily to my first job until I was old enough to buy my first car.

In addition to the drive time and mileage, our initial vehicle purchase price may be affected as well. When I purchased my car, my husband made the classic argument that I should buy an SUV so I didn’t need to bend down to put my kids in the car seats, and so I’d have the extra room for strollers and kid stuff. From my previous post, we learned that this decision likely is costing me up to $250 more per month than if I had purchased a reasonably priced car instead. I have flashbacks to my uncle transporting 5 kids around Britain with a car to accommodate 5, but I don’t recommend all of his solutions for the safety of your family. Regardless, it helps us question whether we need that Suburban or if we can get by with a full sized car or a reasonably priced mini-van.

  • Can someone help transport your children for childcare or afterschool events?
  • When you purchase your home, do you pick a place that allows your children to walk to work, school, or to friends houses, or at least reduce your drive time?
  • When you purchase your car, do you use your children as the reason to upsize? Is it truly needed?
  • Do both you and your spouse need a vehicle to accommodate your children, or can one vehicle suffice? For example, did you sell your truck because it didn’t have room for car seats, but your spouse had a car that was sufficient?


If you haven’t picked up from my posts yet, clothing is a huge pet peeve and sink of money I should be using for my financial independence savings. Let’s say we go shopping twice a year for my two children. The estimated costs from the CNN tool suggests I am spending close to $550 per kid twice a year for a total of almost $40,000 by the time they are 18. I already know I spend about $100 per month on my kids clothes on average in 2020, so I think that is insane. My kids are also little (a two year old and an infant), so I can buy 4 new outfits for less than $20 if I really wanted to. Growing up, I was mostly limited to hand-me-downs from my older brother, or had to save my low earning wages to buy clothes at good will. For some families, this is necessary, and for others it’s a choice. Personally, I felt a strong sense of independence knowing that I was able to provide this basic need for myself at such a young age and didn’t become dependent on a certain lifestyle before I even had a chance to establish my own. My husband is different from me in that he primarily buys clothes new and has a preference when it comes to the brands of his clothing. Both decisions are great as long as they are not used to accumulate excess. When it comes to children, I’ve received some interesting looks when I suggest that my son and daughter will wear the same clothes versus embracing gender specific clothing. I’ve also been asked if it would bother me if my children were seen as “that kid” by purchasing them used clothing. If diapers fall into this category as well, they can be extremely pricey, especially if you let yourself fall in love with the nicer brands like I did. However, I did have a period with my son where I used cloth diapers that helped us save a lot of money. They aren’t pretty, but it’s much easier than I anticipated and you can buy ones with adjustable snaps that grow with your kid.

  • Do you find yourself buying more outfits for your children than they need?
  • Do you buy gender specific clothing or duplicate your clothing purchases to buy your second child new clothing?
  • Do you purchase clothes new, or do you look for opportunities to get used clothing first?
  • Do you have specific brand preferences that are higher cost? Are you getting the full value of the higher purchase price?


The last category besides miscellaneous is healthcare at almost $60,000. I spend about $130 extra per month on my health insurance premiums for my two children regardless of how many kids that I have which is about $1,560 per year, or $28,000 over the first 18 years assuming the costs of healthcare don’t increase. We also spent close to $5000 per kid for medical bills when they were born, so we’re already at about $40,000. One area that I have regretted not taking advantage of is the HSA (healthcare savings account) that allows you to put aside pretax money that can be rolled over each year and accumulate interest. In addition you can also take advantage of a flexible spending account (FSA) for a tax benefit, however it must be used in that calendar year and does not accumulate interest. Past the basics, I’m not sure how much we can do to reduce medical expenses for our children under the age of 18. We have been extremely fortunate that both of our children have been relatively healthy so far, however their are some families that experience medical challenges for their children that can require a significant commitment from their pay.

  • Do you research the different plans for your health insurance options to optimize how much you will pay (ie: do you consider high deductible plans if you don’t anticipate many doctor visits)?
  • Do you take advantage of offers from your health insurance to improve your health and lower risk of illness?
  • Do you take advantage of Healthcare Savings Accounts (HSA) and Flexible Spending Accounts (FSA)?

Do I really need over $200k to raise my child, or can I put aside some of that money for financial independence?

As I’ve looked at the estimated costs to raise a child to the age of 18, we have many opportunities to minimize our expenses and maximize our savings. The biggest areas of opportunity that I see are housing, transportation, and clothing, which are well aligned with my previous article and categories where my family is challenging ourselves to save. As we purchase our homes and our vehicles, it’s important to reflect on what we truly need, and while we have children, we may not need as much as we think we do. In addition, society sets strong expectations for things like clothing, but if we are comfortable challenging those expectations, we can certainly save here as well. Our family chooses to pay for childcare, especially because in our area the cost is reasonable. However, depending on your opportunities to pursue other options and the price in your area, you may choose to prioritize savings here as well.

  • What challenges do you face while trying to achieve financial independence while raising children?
  • What do you think is a reasonable amount to pay in each of these categories?
  • What other opportunities are there to save that I didn’t touch on?

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