I stop by every household on rotation. I have all settings that would allow EA automatically to touch my game turned off. I want no surprises like story progression or random stuff like my favorite family "had to leave this region in a hurry".
When it comes to adding a new generation, I use a dice. All couples will normally have 1 child, then I'll use the dice to decide whether they should have more. Those families I don't play much might not even have beds for their kids, they are more like background fillers, I'll only deal with births, birthdays and graves.