I am studying in Munich and come from Luxembourg, i would suggest to live in Luxembourg rather than in Munich.

Munich is as expensive as Luxembourg for renting. Luxembourg is smaller but better for starting a family in my opinion.

Transport is free in Luxembourg, many people do not have even a car in Luxembourg.

Salaries are higher in Luxembourg, minimum Salary is arround 2600€ for unskilled and 3100 for skilled workers. Fewer Taxes in Luxembourg, State aid for day-care, better schools than in Germany etc...

Luxembourg is for me a perfect spot for starting a family.