Yes, kids will cost you money. But, they force parents to learn many important financial lessons. Here are 9 financial benefits of having kids.

Having kids is an awesome experience like none other. While kids provide plenty of joy, they also provide challenges. When it comes to your finances, most people see kids as a financial drain rather than a boost to your financial picture.

Technically, your expenses may increase, but for others, they may not. Even if your expenses do end up increasing, there are plenty of financial benefits to having kids that most people never consider.

Here are nine financial benefits that come with having children:

1. You’re forced to get serious about your finances

Many people financially coast when their finances only impact their own futures. They don’t care about saving for their future because any missteps will only impact themselves. However, when you have kids, things change.

One of the biggest financial benefits of having kids is they force you to get serious about building a financially stable future. Your kids will be helpless and completely rely on you for virtually everything in their first few years of life. When you realize this, you may start taking your finances more seriously.

Plus multi-generational wealth is definitely a thing. Don’t forget the importance of setting up a will to be sure that you’re documenting exactly where you want your assets to go. It’s not something most people want to think about or act upon. On the other hand, you don’t want to play with fire.

2. You should really fine-tune your credit score

You may want your child to grow up in the perfect house you’ve always dreamed of. If so, kids could inspire you to finally work on building your credit score. You can sign up for Credit Sesame to get access to your VantageScore 3.0 credit score so you can monitor your progress.

When you get close to buying a home, you may want to purchase your FICO scores from MyFICO as FICO scores are most typically used for mortgage applications.

Even a slight difference in your credit score from what you’re expecting could result in a less than optimal interest rate on your mortgage.

3. You have a good reason to build an emergency fund

Providing stability to children is important. Kids shouldn’t have to suffer because of an unexpected expense or temporary financial emergency. Thankfully, you can avoid this by building an emergency fund.

Online banks, like Discover and Capital One usually offer higher interest rates which means your money will grow faster. Start small, such as a $1,000 emergency fund, then work on building your emergency fund to three to six months of living expenses.

4. Life insurance is a must

You could have avoided buying life insurance before you had kids because you and your spouse could survive financially without any additional money a life insurance policy would pay out. Things change when you have kids though.

Chances are you’ll need to get life insurance to cover the costs your family would incur if you or your spouse pass away unexpectedly. They’ll need time to recover emotionally and may need income to survive, as well. You can get life insurance quotes at both SoFi and Policygenius.

5. You may consider refinancing loans to get the best deal

Optimizing your finances may not have been important to you prior to kids, but doing so after kids might be a high priority. If your budget has gotten tighter with the addition of expenses for your kids or the reduction in income from a spouse staying at home, you should take a serious look at your debt to make sure you’re getting the best deal.

Lenders like LendingTree allow you to get multiple quotes with one application so you can quickly see if you have the best rates available, or if you could save money by refinancing your mortgage.

You can then take the savings and set it aside for more important goals or to give you some breathing room in a tight budget.

6. You will invest in your future

When you think of the future, you probably don’t envision having your kids take care of you when you get old because you didn’t save enough money.

Having kids and dreaming about your future does both you and your children a major favor. If you aren’t on track with your retirement savings, they could give you the motivation to get back on track.

Consider using a roboadvisor, such as Betterment, if you don’t know where to get started.

7. You’ll be forced to get serious about living healthy

It’s easy to gain weight or ignore minor health conditions when you’re young. However, neglecting these important health factors can turn into a major health problem down the road.

Sadly, healthcare is only getting more expensive every year. While minor health conditions may not cost much to treat now, the costs to treat the major health conditions they may eventually cause will likely increase over time.

Just like you may suddenly take your finances more seriously after having kids, many people take their health more seriously, too. As young children start becoming mobile, it’s easy for parents to realize they’ve gotten out of shape, too. Chasing kids isn’t easy!

Parents want to be able to be there for their kids as they grow old. They want to see their future grandkids grow up, too. This can lead to major health changes, like getting into shape or managing minor health issues that will reduce the risk of developing a serious health issue later in life.

8. Dad’s make more money

Believe it or not, dads make more money than men without kids. At first glance, this makes sense. Dads tend to be older and further along in their careers than men without children. However, even when comparing men in the same age group, dads tend to make more than men without children.

Sadly, this same phenomenon does not happen with a woman’s career. Women with kids typically make less than those with no children.

9. Tax credits and deductions

Finally, one of the most well-known financial benefits of having children are the tax credits and tax deductions they come with.

Child Tax Credit

While the tax impacts of having children have changed in recent years, there is now a larger Child Tax Credit parents can claim for children under age 17. Children that don’t qualify for the traditional child tax credit may still qualify for a smaller credit for other dependents.

Child and Dependent Care Credit

Childcare is expensive, but you might be able to claim the Child and Dependent Care Credit if you are working or looking for a job.

This credit is only for child care for children under age 13 and covers up to 35 percent of $3,000 of qualifying expenses for one child or 35 percent of up to $6,000 of expenses for two or more kids.

Earned Income Credit

You can qualify for the Earned Income Credit with no children, but having children raises the amount of income you can earn and still qualify for this tax credit. Additionally, the refundable portion of the tax credit grows by quite a bit if you have kids versus if you don’t.

Education credits

Education credits and deductions can help pay for education costs for your children. In particular, the American Opportunity CreditLifetime Learning Credit, and Tuition and Fees Deduction are ways to save you should look into if you’re currently paying education expenses.


Yes, kids will cost you money. Thankfully, they’re inspiring, too. They may inspire you to finally get serious about your finances and save you a ton of money you’d otherwise spend thoughtlessly.

They could inspire you to go for that big promotion or start a new job to earn more for your family’s needs.

Of course, having kids is far from a financial decision. Don’t forget, kids can be a lot of fun, but add a lot of work to your plate, too.

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About the author

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Lance Cothern is the founder of Money Manifesto, a personal finance blog that helps people to master their money so they can live their ideal life. In addition to blogging, he enjoys spending time at the beach with his family. You can connect with Lance on Twitter, Facebook, and LinkedIn.