How I Raise Two Happy, Healthy Kids On A $20,000 A Year Salary

When someone tells me they aren't having kids because "kids are too expensive," it sets me off. It doesn't cost $20,000 a year to raise a child, and I can say that because $20,000 is about what I make. I pay my bills, I avoid debt, and my kids have a pretty great life.

Kids Need Love And Security, Not Money

The thing I'm most proud of in my life is my kids and the way I parent them. Apart from the usual tantrums from a three-year-old and some back talk from a four-year-old, my two girls are very well behaved. They're happy, healthy and lovable.

My girls will whine for a toy at the store now and then, but toys don't really make them happy. A new toy gets about 20 minutes of play. What makes them happy is when I color with them, play Candy Land, read them books or lie in bed with them when they're scared.

Kids want to belong. They want to know their mom or dad loves them forever, even when they misbehave. Of course, kids still need clothes, food and an education, so here's how I save on those.

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I Buy Used

My oldest is the most girly girl you'll ever meet. She loves pink, sparkles and fluff, and she'd wear a princess dress with matching shoes and a headband every day if she could. She has quite the wardrobe, and nearly all of it is used.

My daughters are 17 months apart and wear the same size clothes and shoes, so hand-me-downs don't work for us yet. I shop yard sales, thrift shops and clearance racks. Once a year my aunt and I drive to the biggest nearby cities and shop the yard sales in the wealthy neighborhoods. I come home with a couple of trash bags full of name-brand clothes and shoes, some with the tags still on, for less than $50. That one trip can cover their clothes for the year.

I also watch the sales at discount stores, and now and then I let each girl pick out a $10 outfit and a matching pair of shoes. When they were babies, we had used but high-quality bassinets, play pens and toys.

I Don't Sign Them Up For Everything

My only big expense for the girls is their weekly gymnastics class, about $86 a month for both. I could cut it if I had to, but my youngest is on the shy side, and I want her to get used to other kids and to taking direction from a teacher.

My oldest wanted to add dance, but I made her pick one class, and gymnastics won. Signing kids up for too many activities strains the budget, takes the focus off the activities they love and makes everyone's schedule hectic.

I Teach Them Myself, For Now

I could pay for an expensive preschool, but I can give my girls more one-on-one attention than a teacher with 20 other students can. I bought preschool and kindergarten workbooks, and I give them a little homework every day.

They're at the age where they love to learn, and they pick up new things fast. We read books and practice letters, numbers and words all the time. I'm confident my oldest will be ahead of her classmates when she starts kindergarten at our public school next year.

I Work On My Own Financial Goals

I don't make a lot of money, but I have plenty of goals, and I keep a written financial plan. My money goes to bills first, and anything left goes to savings. I think my self-control with money sets a good example for my kids, even this young.

It's easy to want to spend everything on your kids. It isn't necessary. They'll take your love and attention over a new toy any day.

Update From The Cult Of Money Editors

Alexa wrote this when her daughters were preschoolers. Her approach still holds up, and some of the numbers around it have changed in a parent's favor. Here's what a $20,000 income looks like for a family of three in the US today.

What $20,000 A Year Means Now

A full-time job at the $7.25 federal minimum wage pays $15,080 a year, and that minimum hasn't changed since 2009, according to the Department of Labor. Many states set a higher minimum. For a parent with two kids, $20,000 sits below the federal poverty guideline for a family of three, which is $27,320 in 2026 in the 48 contiguous states and D.C., according to HHS.

Being under that line matters because it opens the door to several programs below. It also means a single parent at this income owes no federal income tax and can get a sizable refund.

Federal Tax Math For A Single Parent Of Two Earning $20,000

A single parent filing as head of household with two children under 17 and $20,000 of wages in 2026 owes no federal income tax, because the head of household standard deduction is $24,150. Refundable credits then pay money back.

Source: IRS. Cult of Money calculation for the 2026 tax year.

That's more than five months of the roughly $1,500 a month Alexa lived on while she built her emergency fund. The full child tax credit is $2,200 per child, but at this income only the refundable part is paid out. Free help filing for these credits is available through the IRS's VITA program. By law, refunds that include the EITC can't be issued before mid-February.

Benefits A Low-Income Family Can Check

Source: USDA, HHS, Medicaid.gov. Cult of Money.

The child and dependent care credit doesn't help at this income. It can only reduce tax you owe, and a parent earning $20,000 with two kids owes none. State child care subsidies matter more. Child care is the biggest bill for working parents, with a national average price of $13,184 a year in 2025, according to Child Care Aware of America.

What Raising A Child Costs, By The Estimates

The best-known estimate, from the USDA, put the cost of raising a child to 17 at $233,610 for a middle-income couple, in 2015 dollars. The Brookings Institution later updated that figure for inflation to about $310,000. Those are averages for middle-income families, and lower-income families spend far less, which is Alexa's point. Our page on the true cost of raising a kid breaks down where the money goes.

Trump Accounts For Kids

US children born from 2025 through 2028 can get a one-time $1,000 deposit from the Treasury in a new Trump Account, created by the 2025 tax law. Families, employers and others can add up to $5,000 a year combined starting July 4, 2026, and the money must be invested in low-cost funds that track a US stock index, according to IRS Notice 2025-68. The accounts can't hold crypto. Treasury began opening accounts automatically for eligible children on Oct. 1, 2026. Parents claim and manage the account in the Trump Accounts app, and they must elect the $1,000 deposit on Form 4547, which can be filed through the app, the Trump Accounts website or an IRS online account.

Readers Outside The US

Most countries pay a regular benefit for children, and low-income parents should claim it first. In the UK that's Child Benefit, plus Universal Credit for working families. Canada pays the Canada Child Benefit, and Australia pays Family Tax Benefit. Each government's website has an eligibility checker.

What To Watch Out For

• Used car seats. The National Highway Traffic Safety Administration advises against a used car seat if you don't know its crash history, if it's past its expiration date or if it's missing labels.
• Recalled baby gear. Check used cribs, bassinets and high chairs against the CPSC recall list. Drop-side cribs were banned in 2011 and shouldn't be used.
• Refund-advance fees. Some tax preparers charge high fees for a refund advance or a "refund transfer." Free filing through VITA avoids those.
• Benefit cliffs. A raise can reduce SNAP, Medicaid or child care help by more than the raise is worth. Ask your caseworker how a pay increase would affect each benefit before you accept extra hours.

FAQ

Can You Raise Kids On $20,000 A Year?

Yes, many families do, especially with free health coverage for the kids, school meals and refundable tax credits. Buying used and limiting paid activities, as Alexa does, keeps costs low.

Do I Owe Federal Income Tax On $20,000 With Two Kids?

No. A head of household filer with $20,000 in wages falls under the $24,150 standard deduction for 2026. You'll still pay Social Security and Medicare tax, and refundable credits can more than cover it.

How Much Can A Single Parent Of Two Get Back In Tax Credits?

At $20,000 of wages in 2026, the earned income tax credit and the refundable child tax credit together come to about $9,900. Exact amounts depend on your income and the children's ages.

Is It Safe To Buy Used Baby Gear?

Clothes, toys and books are safe to buy used. Car seats, cribs and other sleep products need a check against recall lists and age limits, and car seats with an unknown history should be avoided.

Can My Kids Own Crypto?

Most crypto exchanges require account holders to be 18 or older, so a child can't open one. A parent can hold crypto for a child, or invest for them in a custodial account or a Trump Account, which is limited to US stock index funds. On a tight budget, an emergency fund comes first.