Financial Resources and Support for Teen and Young Parents

NP
By Nathan Paulus
Edited by Victoria Copans

Updated: October 22, 2024

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Becoming a parent can be a transformative event that brings new responsibilities and opportunities. But if you’re a teen or young adult parent, you may face unique financial hurdles because of your youth — specifically, the cost of raising a child without the commensurate wealth or work experience typical of older adults.

Fortunately, many financial resources and support systems — from government assistance and educational aid to employment and income support — are available to young parents to help them build a secure future for their families. By tapping into these opportunities, young parents can access the financial support they need to thrive and provide the best possible start for their children.

Financial Obstacles for Teen Parents

Limited work experience, entry-level jobs and lower earning potential can make it difficult to cover essential expenses such as the cost of giving birth, housing, food and childcare. Familiarity with the most common sources of financial struggle can help teens and young parents successfully navigate these financial demands with the right resources and support.

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    Access to Education

    Young parents should do everything possible to stay in school, as continuing education can help you meet your growing family's needs. Earning a high school diploma can significantly improve your earning potential, and pursuing a bachelor’s degree can boost it even further. According to the Bureau of Labor Statistics, the median weekly earnings for those with a bachelor’s degree are $1,493, $594 more than for those with just a high school diploma.

    Various organizations and local services, such as Teen Parent Collaborative (TPC) and Florence Crittenton Services, focus on education for pregnant or parenting teens. Additionally, academic support for teen parents such as scholarships, grants and loans can help fund your education.

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    Child Care Costs

    Child care can be a significant financial strain for teen parents, especially if they have not yet entered the workforce. Data from the Census Bureau found that childcare prices for a single child in 2022 ranged from $5,357 a year for school-age home-based care in small counties to $17,171 for infant center-based care in very large counties.

    For those eligible, government assistance programs like the Credit for Child and Dependent Care can offer subsidized child care.

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    Earnings Gap

    Young adults may not have the work history or professional skills required for many jobs, which can hamper your ability to find and maintain gainful employment. However, there are employment and income support programs for young parents that offer job training, helping you gain the skills needed to enter the workforce and increase your earning potential.

Government Assistance Programs for Teens and Young Parents

Numerous government assistance programs are available to support teens and young parents in raising their children and meeting their families' needs. These programs can help cover basic needs, provide access to healthy foods and nutrition and offer health care coverage and subsidized child care.

Resource
Support
Eligibility
How to Apply

Temporary Assistance for Needy Families (TANF)

TANF provides financial assistance and support services such as child care, job preparation and work assistance through state-administered programs.

  • Must be a resident of the state of application and a U.S. citizen
  • Must be unemployed or underemployed with low income
  • Must be one of the following: have a child 18 years or younger, be pregnant or be 18 years or younger and head of household

Contact your local TANF office or visit the TANF website for application details.

Supplemental Nutrition Assistance Program (SNAP)

SNAP benefits are provided on a card similar to a debit card, which can be used at grocery stores and farmers' markets. The benefit amount varies based on income and family size.

  • Open to all applicants
  • Determined by monthly income and expenses

Contact your local food bank or SNAP office for state-specific requirements.

Women, Infants and Children (WIC)

WIC supports pregnant women, new mothers and young children by providing nutrition education, access to healthy foods and health care referrals.

Applicants must meet categorical, residential, income and nutritional risk requirements. Visit the USDA site for detailed eligibility criteria.

Contact and apply at your local state agency.

Medicaid and Children's Health Insurance Program (CHIP)

Medicaid offers health care coverage for low-income individuals and families, including prenatal and postpartum care for pregnant women.

  • Income eligibility: Determined using the MAGI-based methodology, which considers taxable income and tax filing relationships
  • Designed for targeted low-income children and targeted low-income pregnant women

Call 1-800-318-2596 (TTY: 1-855-889-4325) or complete an application via the Health Insurance Marketplace.

Child Care and Development Fund (CCDF)

This program helps low-income families pay for child care so parents can work or attend school.

  • Must be a parent or primary caregiver for children under 13 or under 19 if they are incapable of self-care or under court supervision
  • Must have a low or very low income
  • Must be employed or, in some states, enrolled in a training or education program

To determine eligibility and apply for child care financial assistance, use the locator tool to contact your state agency.

Educational Financial Aid for Teens and Young Parents

Several programs and resources can help teens and young parents pursue their educational goals while managing family obligations. Below are educational financial support options for teen parents.

Resource
Support
Eligibility
How to Apply

Federal Pell Grants

Federal grants for low-income students that do not need to be repaid. These can be used for tuition, fees and other education-related expenses.

For undergraduates with exceptional financial need, without a bachelor's or higher degree

Apply through the Free Application for Federal Student Aid (FAFSA).

Federal Supplemental Educational Opportunity Grants (FSEOG)

Additional grants are available for students with exceptional financial need. These grants do not need to be repaid and are awarded by the financial aid office at participating schools.

  • Eligibility for federal student aid is determined by completing the FAFSA annually
  • Must maintain enrollment as an undergraduate student and not have a bachelor's degree

Apply through FAFSA.

Federal Student Loans

Low-interest loans provided by the federal government to help cover education costs.

Eligibility and loan amounts are determined through FAFSA

Apply through FAFSA.

Scholarships for Teen Parents

Scholarships like the Patsy Takemoto Mink Education Foundation award and the Jeannette Rankin Women's Scholarship Fund provide financial aid to low-income women, especially mothers.

Varies, depending on the scholarship

Visit the respective websites for application details.

Employment and Income Support for Teens and Young Parents

Employment and income support programs are available to help teen parents balance their work and family responsibilities, providing the necessary support to achieve financial stability and care for their families.

1
Workforce Innovation and Opportunity Act (WIOA) Programs

WIOA can provide young parents with job training, education and employment services to help them develop skills and find employment. It includes programs for vulnerable populations such as Job Corps, YouthBuild, Indian and Native American Program, Reentry Employment Opportunities (REO) and Migrant and Seasonal Farmworker programs. These programs offer job search assistance, workforce preparation, career development and classroom and work-based training opportunities.

2
Earned Income Tax Credit (EITC)

The EITC is a financial incentive for low- to moderate-income working individuals and families, particularly those with children. It decreases the amount of taxes owed and can result in a refund, providing additional financial support.

To be eligible for the EITC, you must have earned income from employment or self-employment and have a valid Social Security number. You cannot file as "married filing separately" and must be a U.S. citizen or resident alien for the entire year. Additionally, you cannot be the qualifying child of another person, and your investment income must be $3,650 or less for the tax year. Specific income limits and credit amounts depend on your filing status and the number of qualifying children.

3
State and Local Employment Programs

Many states and local governments offer employment support programs for young parents, including job placement services, internships and apprenticeships. Eligibility varies depending on the specific program. Check your state's labor department or local job center for detailed information, as well as job search databases.

4
Career Counseling

Career counseling provides guidance to help young parents explore career options, set goals and create action plans. These services can help identify strengths and interests, improve job search skills and enhance employability. Some organizations or platforms provide it for free, such as 80,000 Hours, offering free one-on-one career advice to help teen parents plan their future careers.

Community and Nonprofit Resources for Teens and Young Parents

Various community and nonprofit organizations provide resources to help young parents, offering everything from parenting education to financial assistance. Below is a list of community and nonprofit resources for teens and young parents.

  • Baby2Baby: Baby2Baby is a nonprofit organization that provides children living in poverty with essential items such as diapers, clothing and other necessities. The organization supports children by distributing these critical items, offering disaster relief supplies to families affected by natural disasters and collaborating with local organizations in over 40 cities to ensure children in poverty receive the help they need.
  • March of Dimes: The March of Dimes supports research, provides educational resources and advocates for policies to ensure every family has a healthy start. It also offers programs like NICU Family Support and community-based health initiatives.
  • Nurse-Family Partnership: Nurse-Family Partnership provides home visits starting early in the pregnancy and continuing until the child's second birthday. The program aims to improve maternal health, child health and economic security by offering support, education and resources. Nurses help mothers have a healthy pregnancy, care for their children and work towards a stable future.
  • Parents as Teachers: This program offers in-home visits by trained Parent Educators who guide child development, parenting practices and early detection of developmental delays. They help parents understand each stage of their child's growth and improve the child's language, intellectual, social and motor skills.
  • YWCA Young Parents Program: The YWCA Young Parents Program supports pregnant and parenting teens aged 14 to 24 by offering various services, including educational support, to help participants complete their high school education through a HiSET preparation program. Additionally, it provides community-based assistance such as child care, case management, life and parenting skills training, job search assistance and career exploration.

Managing Finances as Adolescent Parents

Banking and financial services can help teens and young parents save money, build credit and ensure financial stability while budgeting for a growing family. Here are some essential financial steps to help new parents manage their finances effectively:

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    Open a Bank Account

    Opening a bank account should be one of the first steps in managing your finances. A bank account lets you deposit money, make payments and track expenses. Many banks offer special accounts for students or young adults with low fees and minimum balance requirements. Look for accounts that offer online banking and mobile apps for easy access to your funds.

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    Build an Emergency Fund

    An emergency fund can cover unexpected expenses like medical bills, car repairs or urgent baby needs. Try to set aside a small portion of your income regularly, even if it's just a few dollars. Over time, this fund can provide a financial cushion in emergencies, helping you avoid debt.

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    Use Credit Cards Wisely

    Credit cards can help build your credit score if used responsibly. As a young parent, choose a credit card with no annual fees and a low interest rate. Use it for small, necessary purchases and always pay your balance in full each month to avoid interest charges. Avoid using credit cards for nonessential items to prevent debt accumulation.

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    Understand and Build Credit

    A good credit score is important for future financial opportunities, such as renting an apartment or getting a loan. Building and maintaining good credit can significantly impact your financial stability as a teen parent. To build credit, ensure you pay all your bills on time, including utilities and phone. Keep your credit card balances low to avoid high-interest charges and maintain a good credit utilization ratio. Additionally, avoid opening too many new accounts simultaneously, which can negatively impact your credit score. Regularly check your credit report for errors and monitor your progress. Many banks and credit card companies offer free credit monitoring services to help you stay on top of your credit health.

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    Set Up Automatic Savings

    Many banks offer automatic savings plans where a fixed amount of money is transferred from your checking to your savings account each month. As a young parent, this can help you save consistently without thinking about it. Even small automatic transfers can add up over time.

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    Explore Insurance Options

    Having health insurance can protect you and your child from unexpected medical expenses. Newborn health insurance can help you avoid high medical costs, ensuring you're prepared for sudden medical bills. If you have a car, car insurance is also important for covering the costs of accidents, repairs and other unforeseen vehicle-related expenses. Always compare and shop for affordable health and car insurance to save money.

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    Invest in Your Future

    Once you have a stable income and some savings, consider investing in your future to ensure long-term financial stability. Furthering your education can lead to better job opportunities and increased earnings, so look for programs that offer flexible schedules or online courses to accommodate your parenting duties.

    Investing in retirement savings early is also important; even small contributions can grow significantly over time. Investing in your education and retirement can build a stronger financial foundation for yourself and your child, ensuring a more secure future.

Additional Resources

Here is a list of additional resources to help teens and young parents care for their families and manage their responsibilities:

About Nathan Paulus

Nathan Paulus headshot

Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.

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