Raising a kid takes more than patience; it takes a ton of cash, too. Our exclusive survey uncovers how young families are footing the bill—and what you can do to stay on budget, defeat debt, and feel financially secure.

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Families, Finance and the Future Illustration
Credit: Jenny Bowers

$304,480. That’s the projected, inflation-adjusted cost to raise a kid until age 18. No wonder we’re stressed about finances! Together with the National Endowment for Financial Education, Parents asked 454 millennial parents to come clean about cash flow. You did. More than one in three admitted that you should have waited longer to start a family, and almost half said money problems are stopping you from having another child. A shocking 51 percent of you would even trade a year off your lifespan to have greater financial security. Deep breath. There’s still time to get it together—starting with our advice.

Finally Stick to Your Budget

61 percent of you have set up a monthly budget, but only half follow it. These tips will help you get back on track. Turn to these strategies if you've fallen off the budget wagon.

Embrace tech. Budgeting sites like Mint.com and YouNeedABudget.com let you track your spending so you can make smarter decisions, says personal-finance expert Jean Chatzky, host of the Her Money With Jean Chatzky podcast.

Emergency Fund Graphic

Go old-school. Try an envelope system in which you set monthly cash allowances for groceries, entertainment, and shopping, says Pam Horack, a certified financial planner with Pathfinder Planning LLC, in Lake Wylie, South Carolina. Once the money’s gone, you wait for the next cycle.

Expect the unexpected. If you spend every penny of your income, you won’t have anything left in case the boiler breaks. Put away a set amount every paycheck. If nothing happens, hey, instant savings.

Spread out one-time expenses. The holidays are coming. Imagine how much easier it’d be to pay for gifts if you’d set aside a bit every month, notes Ben Wacek, a certified financial planner in Minneapolis. SmartyPig.com lets you create savings buckets for different goals and then set up automatic transfers to fund them over time.

Finance Alarm Clock Illustration
Credit: Jenny Bowers

Get a Handle on Your Debt

57 percent of you have $5,000 or more in debt, excluding your mortgage, and 18 percent owe $25,000 or more. Only 12 percent of you are blissfully debt-free. What can you do about it? We’re glad you asked.

Make a plan. Get a big-picture view by linking all of your debt accounts at ReadyForZero.com, advises Laura D. Adams, author of Money Girl’s Smart Moves to Grow Rich. The site will create a free payoff plan and help you track your progress.

Start small. Focus on paying off the debt with the lowest balance first. Then proceed to the next smallest, and so forth, says Ellie Kay, author of Living Rich for Less. You’ll gain momentum as the list shrinks.

Solve your debt crisis. Throw every resource you have into tackling your credit obligations. Work a side job, have a yard sale, take in Airbnb boarders. “And make lifestyle changes to minimize your expenses so you can pay off your debt as quickly as possible,” says Horack.

​How One Mom Did It: “My husband and I paid off $127,482 in four years. We found extra work, learned how to use coupons, made our own laundry detergent, ditched the landline and cable, and filtered every purchase through a want vs. need matrix.” Cherie Lowe, 39, mom of two and founder of the Queen of Free blog; Indianapolis

Lower Your Housing Costs

35 percent of you spend at least half your gross income on housing. This may be unavoidable if you live in an expensive urban area, though there are cost-reducing options.

Refinance If you’re paying at least 5 percent interest on your home mortgage, have a credit score of 670 or above (which is considered good by lenders), and plan to live in your home five years or longer, it may be beneficial to reduce your monthly payment by refinancing to a lower rate (at press time the current average was 3.46 percent). Use Zillow’s Refinance Calculator to crunch the numbers and decide.

Downsize Think about whether your family could live with less square footage or a slightly longer commute. “I have parent friends who bought a large home and later decided, ‘We don’t need this much house,’” Wacek says.

What Keeps You Up at Night? Infographic

Start Saving for Your Retirement and Your Kid's College

41 percent of young parents have yet to start saving for retirement.

Even factoring in Social Security, you’ll need to save ten times your annual income to cover your retirement needs, says John Sweeney, executive vice president of retirement and investing strategies at Fidelity Investments in Boston. And then there’s college: The projected cost of a four-year degree at an in-state public university starting in 2030 is $166,818, according to FinAid’s College Cost Projector. Yet 46 percent of young parents aren’t currently setting aside funds for their child’s higher education. Get going!

Start with retirement. Your kid can always work or get a college loan (or both), so aim to invest at least 10 percent of your income toward your golden years. If need be, start smaller and bump up your contribution rate every six months until you get there.

Open a 529. This college-savings plan allows your earnings to grow tax-free as long as you use the funds for qualified education expenses. Many states also provide a tax break (log on to savingforcollege.com for more info). Even if you can’t fund it regularly, you can earn Upromise dollars by registering eligible credit, debit, and grocery cards.

​How One Mom Did It: “I’m putting 8 percent from every paycheck into my Roth 401(k) and increasing it by 1 percent per year. We’ve had to cut back on vacations. We don’t have cable and rarely eat out. But I feel good that I have a long-term plan.” Jennifer Markowski, 37, mom of two; West Deptford, New Jersey

Parents Magazine