Previous research on the association between parenthood and life satisfaction has shown that parents of minor children are not more satisfied with their lives than childless people. This study addressed the question of why children do not enhance their parents' life satisfaction. A major objective of this study was to determine whether and to what extent the costs of raising children act as suppressors of life satisfaction. The empirical analysis applied fixed-effects models and used data from the German Socio-Economic Panel (1994–2010, N = 16,021). The 3 primary findings of this study were that (a) parenthood by itself has substantial and enduring positive effects on life satisfaction; (b) these positive effects are offset by financial and time costs of parenthood; and (c) the impact of these costs varies considerably with family factors, such as the age and number of children, marital status, and the parents' employment arrangements.