It can cost a lot to raise a child. And parents might feel their wallets getting lighter during certain seasons, whether they’re buying backpacks, sports uniforms or holiday gifts.
Half of American cardholders (50 percent) now carry credit card debt, according to Bankrate’s 2024 Credit Card Debt Survey. And parents with young kids are more likely to be in that camp. 58 percent of parents with kids under 18 who have a credit card carry a balance, compared to 51 percent of parents with kids 18 or over and 45 percent of non-parents.
It’s a good idea to create a budget for your family. But the amount you have available for “wants,” not “needs,” may depend on your income and number of kids.
Meet the parents
Suzy Goodwin, mother of four
Suzy Goodwin lives in Ocean Isle Beach, North Carolina, with her husband, 10-year-old son and 8-year-old triplets. She works from home as an account manager at a benefits administrator company.
Goodwin points out that just because a parent works from home doesn’t mean they can also be a full-time caretaker. Her family juggles the costs of summer childcare and extracurricular activities. They also make an effort to maximize tax credits and exemptions. But with four kids, the Goodwins have to make some sacrifices.
“My husband and I agreed early on that there are a lot of experiences these kids are just not going to be able to have because there are four of them,” she says.
Jackson Larimer, father of one
Jackson Larimer lives in Raleigh, North Carolina, with his wife and 1-year-old son. He’s also a financial coach. Overall, he says that having a baby has actually been less costly than they expected.
“We found that when it comes down to it, at least when your child is young, most of what they need is pretty simple,” he says. “They need doctor’s visits for vaccines, they need diapers, they need clothes, and a lot of those things you can purchase pretty affordably.”
Plus, with a new baby, he and his wife aren’t dining out or making as many lifestyle purchases.
Rachael Kirk-Cortez, mother of two
Rachael Kirk-Cortez lives in Oakland, California, with her husband, 2-year-old son and 5-year-old daughter. She’s a marketing consultant working on a project basis, so her income fluctuates. Her family builds a budget that’s flexible throughout the year’s seasonal expenses.
“We are pretty strict on our budget now… and that’s probably why we’ve been able to avoid some debt,” she says. “We check that budget every month.”
The costs of parenting can change with the time of year. Here are some of the seasons that these parents — and Bankrate data — say can get expensive.
Back-to-school season
As fall approaches, so do things like sports, extracurriculars, after-school care and those long school supply lists.
Nearly 1 in 3 Americans (31 percent) doing back-to-school shopping this year are going into debt (or already have) for these expenses, according to Bankrate’s 2024 Back-to-School Survey. This includes 24 percent of people who are using or plan to use credit cards and pay the balance over time as well as 13 percent who are using or planning to use buy now, pay later services.
If you’re feeling stressed about money this season, you’re not alone. Eighteen percent of back-to-school shoppers say these expenses have or will strain their budgets.
How these parents manage money during back-to-school
Goodwin buys her kids’ back-to-school supplies on a rotating schedule, like buying new backpacks every other year. And while her kids currently participate in karate or dance, they get to join one more activity this year. Overall, their family pays around $350 a month for activity fees, and an additional $500 for annual supplies like uniforms and competitions.
Her kids go to public school, so they don’t pay tuition fees. But they budget $100 in gift cards for each teacher at the beginning of the school year.
“[The teachers] all have lists that don’t get fulfilled, or they’ll need things throughout the year,” Goodwin says. She and her husband also plan ahead to donate to the school’s two big fundraisers.
Public school saves money for Kirk-Cortez’s family, too. Her 5-year-old is heading to kindergarten, so they’ll only have to pay for preschool for her 2-year-old. Before, she says her family was paying about $4,000 a month for her two kids to be in full-time daycare and preschool.
Money tip for back-to-school season
Backpacks, scissors and calculators are all supplies that can last for multiple years. And instead of tacking on activity after activity to your kid’s schedule (and your budget), consider trading a new activity they’re interested in for an old one.
Holiday season
The holidays often feel like a magical time for kids, but parents may be taking on stress and even debt behind the scenes.
According to Bankrate’s 2024 Early Holiday Shopping Survey, nearly 1 in 3 holiday shoppers with children 18 (31 percent) expect to spend more on holiday shopping in 2024 than they did last year.
Meanwhile, more than 1 in 4 shoppers (27 percent) plan to take on debt for winter holiday shopping, including 19 percent who plan to use credit cards and pay them off over multiple billing cycles and 11 percent who plan to use a buy now, pay later service.
How these parents manage money during the holidays
Larimer explains that his family often travels during the holidays to visit extended family who are spread across three other states. When he and his wife book through airlines, they put the miles they’ve earned toward upgraded seats next to each other so they can both manage their baby.
Parents also face an extravagant culture of gift-giving. To avoid overspending on gifts, Goodwin and her husband decided that each kid gets three gifts for under $200 total. They’ve also started affordable Christmas traditions, including walks on the beach and a special breakfast. Their kids can look forward to the annual experiences as much as the gifts.
Money tip for the holiday season
Set expectations early for how many and what types of gifts your family will receive, so that advertising and peer pressure don’t lead to unmet wishes. You can also brainstorm new ideas for traditions together.
Tax season
As if taxes aren’t complicated enough, having children can add to the mix.
On the one hand, parents with kids under 18 are more likely to expect a tax refund (82 percent), compared to 61 percent of parents of kids over 18 and 64 percent of non-parents, according to Bankrate’s 2024 Credit Card Repayment Strategies Survey.
Parents with kids under 18 are also more likely to use their tax refund to invest it, spend it on a vacation, splurge on retail purchases (clothes, electronics, etc.) or make home improvements than parents of kids 18 or over or non-parents.
But there are several hoops for parents to jump through when it comes to calculating taxes and tax breaks.
How these parents manage money during taxes
“I had done napkin math,” Goodwin says. After having her first child, she wanted to continue working full-time. She thought her salary would pay for her oldest’s daycare and her triplets’ nanny. But as she realized during tax season, “My nanny was making more than I was.” That’s because her income was landing them in a higher tax bracket.
Goodwin’s family has found tax savings in other ways. With four kids, they max out the Child and Dependent Care tax credit in a month and a half. They also maximize a dependent-care FSA to subtract their childcare costs from their taxable income.
“You’ve got to be organized — you have to commit to record-keeping,” Goodwin advises.
Larimer says that having a baby actually helped their family in terms of filing taxes. When his wife was pregnant, she left her job. They dropped down to a single income and a lower tax bracket. And because she stays home, they don’t pay for daycare.
“As far as how kids have impacted our tax situation, it allows us to qualify for the tax credit, which is worth $2,000 per child per year. So that took $2,000 off of our tax bill,” Larimer says. “We also use a 529 [plan] to save for educational expenses down the road for our son. So that doesn’t necessarily impact our current taxes, but it does allow some money to grow tax free for him as well.”
Money tip for tax season
Research the different tax credits that are available for families. As much as possible, get your paperwork in order to maximize those savings. You can also ask a tax advisor for help.
Summer travel season
Vacation, camps and child care are ingredients for a memorable summer, but they can come with a high price tag.
Nearly half of parents with kids under 18 (49 percent) say they would use a form of debt — carrying a credit card balance; buy now, pay later service; personal loan; or borrowing from friends/family — to pay for summer travel, according to Bankrate’s 2024 Summer Travel Survey.
That’s compared to 25 percent of parents with kids 18 or over and 33 percent of non-parents. It seems that summer vacations, regardless of whether they’re within budget, are more of a priority when kids are at home.
How these parents manage money during summer
Kirk-Cortez says her family often goes camping and plans for a couple of trips by plane a year.
“Travel camping is so great for us because it’s very affordable, we have all the supplies and there’s so much here in California to explore,” she says.
When they fly, they try to visit places where they can stay with someone they know.
“Summers throw a wrench in things,” Goodwin says. Her children need childcare, day camps and sports camps. They have to strategically budget. She mentions that they do live in an affordable area and have help from grandparents.
A travel rewards card can also help your family get where you need to go by earning points or miles on everyday purchases.
Money tip for tax season
Remember, any interest you accrue on debt will add more to that original price tag. Summer vacations and camps are fun, but there are many activities that are affordable or free that your family might enjoy just as much.
The bottom line
While each season can bring new demands on your family’s budget, it’s possible to save money while still creating positive memories. Even though talking about money can feel taboo, it might be a good idea to ask your friends and neighbors how they navigate the seasons. As the saying goes, it takes a village to raise a child — on a budget.
The best rewards credit cards can get you cash back, points or miles on seasonal expenses that your family can put toward activities you enjoy together. Rewards can even minimize the effects of inflation.
But if you’re carrying credit card debt, choosing a balance transfer card could help you avoid racking up interest fees. You’ll just want to have a debt repayment plan in place.
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Bankrate commissioned YouGov Plc to conduct the surveys. All figures, unless otherwise stated, are from YouGov Plc.
2024 Credit Card Debt Survey: The total sample size was 2,437 U.S. adults, of whom 1,877 were credit card holders and 930 carry a balance on their credit card(s). Fieldwork was undertaken between June 24-26, 2024.
2024 Back-to-School Survey: All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,358 adults, of whom 1,163 have shopped or are planning to shop for back-to-school items this year. Fieldwork was undertaken between July 15-17, 2024.
2023 Early Holiday Shopping Survey: Total sample size was 2,300 adults including 1,789 holiday shoppers. Fieldwork was undertaken between Aug 5-7, 2024. The survey was carried out online. The figures have been weighted and are representative of all U.S. adults (aged 18+).
2024 Credit Card Repayment Strategies Survey: The total sample size for this study was 2,239 US adults, of whom 1,505 were expecting a tax refund. Fieldwork was undertaken between Jan. 24-26, 2024.
2024 Summer Travel Survey: Total sample size was 2,360 adults, of whom 1,262 are planning a summer vacation and 1,098 are not. Fieldwork was undertaken between March 18-20, 2024.
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