Well, the good news is that as kids get older, costs become more optional.
When they're little, you either pay for daycare or sacrifice one income; they need diapers; if you can't/don't breastfeed they need formula; etc.
When they're older, sure, you still need the basic food/clothing, but they can stay on their own, AND they can earn their own money to pay for things. Activities, the type of food/clothing, phones, hobbies, school trips -- all that stuff is optional. You can keep your costs down as much as you want by just saying no or making them pay for it.
That said, pay attention to shawndoggy, because just because you *can* do something doesn't mean you will *want to* when you get there. E.g., I was extremely anti-phone for kids -- and then our after-school babysitting fell through when DD was halfway through 6th grade, and she was coming home to an empty house, and I wasn't comfortable with that. So we got her a phone. E.g., I was also VERY strongly anti-kid-car, as sort of the epitome of entitled twit-ness. And yet I just gave DD my old car, so she can start driving DS to their shared religious activities, and so she can pick him up from after-school activities when he can't take the bus. None of this was remotely "necessary" under any possible meaning of that word -- but I was still happy as a clam to spend that money given our specific circumstances.
Beyond that, if/when your kid gets really, really excited about something, it is hard to say no when you know you have the money in the bank to cover it. I didn't have many choices like that growing up, because we didn't have money -- I played the violin, not the cello, because my mom owned a violin already; I did swimming, even though I hated it, because that's what was super-cheap through the local Y. So for me, it is a priority to give my kids more opportunity to do things they really, really love doing. So we have set limits (e.g., one activity at a time), and we start with the cheap/free things, but I am not going to say no unless it is truly ridiculous (e.g., private flying lessons are not exactly on the list).
But, to repeat: that's all completely optional. You can make any choice you want, and you can be as frugal or spendy as you want within those choices.