how kids (can) make you poor

Raising a child can cost up to $250,000 – and that’s from a study done almost 20 years ago. That’s only the cost through high school – college is another problem entirely, unless you don’t plan on paying for your child’s education (and I don’t). Having a kid is expensive. Having a second is less expensive – hand-me-downs and shared costs can reduce the individual costs – but a larger family is going to cost a fortune. The simple fact is that you won’t become AS rich with kids.

I’ve seen the question of children play out a dozen different ways with friends and in my own life. My parents had kids (my brother and me) when they were barely out of their teenage years. I have friends who waited until they were almost 40 to have kids. One couple fervently and frequently insisted they would never have kids – and show no signs of changing their minds. In each case, the decision to have a child (or children) was deeply personal, and made for a number of reasons – but seldom considering the cost. The simple fact is that you’ll be better off financially without kids. Kids are expensive.

It’s a potentially sensitive topic … and most people don’t want to have that conversation. “Kids bring so much joy into your life!” “Kids are their own reward!” I’m biased – the cliches are all true. My son’s a supernova of energy, creative and amazingly verbal. My daughter’s charming and almost impossibly cheerful. They are joys. But to be realistic, I have to admit that because of them I will not be as wealthy as I could have been. I regret nothing, but I also understand that I’m going to have to work harder accumulating wealth than I would have without children.

So how do we plan to compensate? If you have kids, how can you avoid spending more than you need to? It’s not the nature of my blog to talk about ways to save money on Cheerios by buying the store brand – although you should. But I do have a few “big ideas”:

  1. I’m not paying for my kid’s PRIVATE college education. If Little Buddy or Pumpkin want to attend a private school, they’d better develop tennis skills or become world-class scholars. I’m not paying for Pumpkin to attend an Ivy. I’ll help, but if they can’t pay for a private college, they can go to a public university, just like Mama and Papa did. We did just fine.
  2. We will readjust our lives around their education early on, though. We moved to Florida to escape crappy public schools in Jersey, and made sure we landed in a school district considered one of the best in the state.
  3. I will strive to teach independence. This sounds stupid, but I have seen so many of my colleagues in corporate America talking about their mid-20 (or even mid-30) year old children living at home. I know I can talk big now, but I left home at 18 and my children will too. If  they can’t afford a home, I’ll tell them to move to a cheaper locale. An unmarried 35-year-old living with their parents needs to experience life.
  4. We will resist consumerism. A couple of years ago, one of my neighbors bought one of those big car-battery powered cars – with a working FM radio – for their daughters. Little Buddy loved it. I was tempted to get him one. He didn’t, and doesn’t, need it. I have fallen victim again and again to the urge to buy toys. Sometimes it makes sense: I bought him a farm set that he plays with daily.  Sometimes I fail: I have bought a half dozen balls (football, baseball, soccer) and he is utterly indifferent to all of them that don’t have Spiderman on them. But I see a sickness in most parents around me: the need to buy distractions. I struggle to remind myself that learning to pretend my wooden blocks were race cars taught me to IMAGINE things. My parents would have done me a disservice by buying me Leapfrog, or whatever the 70s equivalent was.  Learning how to live with less – at least as far as toys – is a gift, not a burden.

But none of these cost-saving ideas can compensate for the fact that a childless couple (or a single person) will simply be much better off than a couple with kids. I won’t recommend one choice or the other, because it’s such a personal choice. But don’t let anyone tell you otherwise: in the short term, having kids is no big deal. You can afford formula, diapers, baby clothes. But in the long run, having kids will change your career choices, affect your ability to save and limit your choices about almost everything. Make sure you’re comfortable with the long-term cost before you take the leap.

  • Dahlia

    Kids ARE expensive, that is true. I hemmed and hawed on kids, finally deciding in my late 30s that I’d skip it — and then got pregnant. HA! But I’ll tell you one way that the kid has changed me with regard to money … I was very irresponsible with money in my 20s and 30s; not because I spent tons of it, but because I was very cavalier with my career. I rarely stayed at a job a whole year, and my personal best until i was 40 was 18 months in one full-time job. I took underemployment “sabbaticals” where for a year or two at a stretch I’d temp, work in a bookstore part-time, pour coffee, etc. I was terribly depressed and seemed incapable of ever pulling myself together to be a real grownup.

    Now I’ve been at the same company for three years (not much, I know, but a long time for me) and all I can think about is what to do next to secure our future — retrain for something new and better paying? Start night classes to expand my software knowledge? Decision, decisions. I do know, though, that had I not had my daughter, I would likely have stayed foolish, irresponsible and trapped in underachievement for the rest of my life. I know it. So maybe for me, that half-a-mil is a wash … and I get to keep the kid! Win-win. :)

  • Big-D

    How dare you speak things that are … the truth. No matter what everyone says about having children, the amount of kids, you will be spending cash. I have always thought 1/4 million is high (but if you want private educations, school uniforms, the best clothes, etc. then yeah – I can see it). There are simple things that go with kids besides stuff: Insurance costs, instructions/lessons/tutoring, food, etc. There is also simple things like needing a bigger house, and stuff to fill that house.

    However there are hidden costs which apply. When kids are little or before middle school, you can travel a lot more and move more frequently. However when kids get older, like late middle, and high school, people don’t generally move to a new place because work wants to you leave. This is a career limiting move as now work won’t ask you for the promotions, etc. any more. This is a biggie. Plus sans-kids you are free to move to anywhere you like, and not based on other things. If you want 100 acres in the country, and you can make it work, that might not work with kids in the best schools (as they are rarely in the country), and if you want 100 acres in the cities, it will be too expensive to work.

    I have kids – so I am not advocating, just pointing out there is a lot to this discussion.

  • http://www.etsy.com/shop/kat989 SilverandBlue

    My husband and I discussed having children at length before we got married. We both came to the conclusion that we did not want to have children. A year later we discovered that I have a genetic blood disorder that would make pregnancy difficult and expensive. Not to mention that without spending the money on in vitro we can not guarantee that I will not pass on the blood disorder to my children. When facing spending that much and risking so much to have children, or just not having any kids came up, we chose to be childless.

    My husband and I make half the money that most of our friends with children make. Yet we enjoy a high standard of living because 95% of our income flows directly to us. And we can invest in ourselves instead of our children.

    For example, I plan to go back to school in the Spring to get a certification in occupational therapy. I already have a masters degree in Theatre. But I want to earn more income. So we moved and I’m going back to school. Not something thats easy to do when you have children.

    My husband works a ton of overtime. 65+ hours a week at times. This works great for us because ‘m an adult and I understand that he’s doing this for us. But kid don’t understand. A family man can’t work 65 hours a week unless, a) his wife is with the kids all the time, b)the wife works and they pay for childcare.

    We both work a lot at jobs we enjoy. And we take weekends to be together. And we take awesome vacations a few times a year. Can do that with kids.

    I’m sorry I could go on and on about child expenditures. I’m glad I have the medical excuse to tell people. Its hard for people to hear, “We just don’t want to have and kids.”

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  • http://www.firstpropertychoice.com/portfolio.aspx?portkey=1357 Marbella holiday rentals

    you are certainly not joking. I know that it would generally be regarded as wrong, calculating how much you children will cost you over a lifetime, but jeez few people have an idea before they embark into parenthood.

    For the uninitiated imagine a number and multiply that figure by 100. Then you are getting close to the expense of bringing up one child in todays consumerist society!

    • Greg McFarlane

      “imagine a number and multiply that figure by 100. Then you are getting close to the expense of bringing up one child in todays consumerist society!”

      Huh?

    • http://www.bripblap.com Steve

      I think it was just an exaggeration to make a point :)

  • Toby

    I think it’s responsible to think about financing your children, but once you get past the basics, how much they cost is, to a large part, up to you. Sure you can find people who’ve paid 250k on raising a child, it may even be the average, but there’s plenty of people who don’t spend that much, maybe because they just don’t have the money to spend.
    I think that children cost as much as you’re willing to spend on them; people perhaps spend more than they have to/should simply because they want to do the best for their kids, and we’ve been brainwashed into thinking that means more material goods and expensive education.
    My conclusion, then, is that you should decide whether to have kids simply on whether you’re mature enough to give them the support they need, willing to adapt your life to accomodate them and simply think your life will be more fulfilling with kids than without. Some people know they just don’t want kids, and that’s ok, but deciding not to have kids because you think they’re too expensive is illogical and possibly a decision you might regret.
    Disclosure: I have 2 kids, 3.5yr and 2yr, and I love getting them good, constructive, educational toys as much as the next parent. But we’ve decided to raise them on one income. We’re choosy about what we buy and we budget for their expenses:
    Swimming lessons, yes; building kit, yes; wooden train set, second hand; special Thomas branded engine shed, no.

  • http://www.moneycrashers.com Andrew

    Really interesting post. I think so many people these days just take it for granted that they have to have kids and do it while their younger. But as you mention, it is an unbelievable financial burden (and personal burden in some respects in that it limits your freedom). One really needs to do some hard thinking before taking the leap.

    Agree with you on private education. I say if my kid wants a private education, he can take on student loan debt if he can’t get a scholarship and pay it off like so many do.

  • Trish

    Kids are wonderful! We have 5, homeschool and live on ONE income (no we do not make over $100,000). My husband & I are NOT rich in money, but we are rich in family relationships. I am a certified teacher, so we realize that we could have more “material” success, but we CHOSE to have a large family instead. Do we cut corners? You bet, and love it. Our children play soccer, hockey, had piano lessons, swimming lessons and we go on family holidays. We have it all except not on a BIG scale. In our outlook, LIFE is about family,not about how materially rich one is. Would we do it again? You bet! Live, Love and Laugh!

  • Rozann

    Nobody seems to say what to me is obvious. Children bring a level of joy and growth that is found NOWHERE else. We have five children and I wish I could have had five more. We live on a single income and don’t have all the material trappings of others, but we have good times, laughter, joy and absolutely no regrets. We are so looking forward to having grandchildren too. Our two oldest children are adults now and they are our best friends! I wouldn’t trade our children for anything that money can buy. I heard recently that the only things we can take with us when we die are 1) our character, 2) our knowledge, and 3) our memories. Children are the best character building “things” to have; answering all their questions builds our knowledge; and making memories with them adds up to a lifetime of wonder and humor and joy. What more could you want?

  • Honey

    My partner and I have decided not to have children – for a variety of reasons but chief among them that we don’t want to spend money on anyone but ourselves. We’ve been, if not irresponsible, at least self-indulgent (we each have $100K in student loan debt – not from undergrad, I have a PhD and he is an attorney) so we will be paying that off instead of having a child :-)

    Other factors included genetic illnesses that run in our family, a desire for mobility, and the fact that the planet’s completely overpopulated and we believe it’s unethical to make choices that will detract from other people’s standard of living without their consent.

  • Melanie S

    There are many reasons to have kids, but studies have shown that despite what people say about children bringing deep happiness,people with children are no happier than childless couples.

    That being said, we have one on the way. It was the decision we felt was right for us.

  • Melanie S

    Oh I meant to link to this Maclean’s article: http://www2.macleans.ca/2009/07/24/no-kids-no-grief/

  • http://www.fincar.com.au/ FinCar

    I totally agree that kids are very expensive. Having to rise a child takes a lot of cost and financing them requires such great financial management. Facilitating all their basic needs is something valuable. being atleast prepared makes us viable to support the financial needs. Having to invest for their health and education is a great help considering the constant economic destabilization. Preparation will be the best tool to empower our vision to provide quality living for them.

  • http://www.unscriptedlife.com Ivy

    This is all so true. I think the emotional investment makes that estimate skyrocket. I changed me career to accommodate my child, we relocated, etc. etc. etc.

    But no matter what the cost, it is the best money you will ever spend!

  • Father

    My wife and I have two kids who are truly a blessing to parent. They look like us, (mostly me) act like us; well they are us. Spending money, changing careers, etc. to put family first is well worth it on so many levels. In my opinion, the idea of putting something or someone ahead of yourself keeps you from being self absorbed. The cost and committment required to raise a child or children can never be repaid which makes it even more worth while. Those of you who do not have children try (if you haven’t) doing something for someone who you know can never pay you back and see how it makes you feel. I’ll bet my last you’ll feel wonderful…

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  • http://www.moneybythenumbers.com/ MBTN

    I think the $250,000 figure is inflated by the consumerism that you talk about. In the past, families were much bigger than they are now. However, it is not like people were richer then. If anything they were poorer. As an example, my grandmother grew up with 5 siblings. They were not very well off by any stretch of the imagination. They lived through the depression and lived on very little. Yes they had a roof over their heads, so they were lucky, but their apt was tiny for 8 people. Kds slept in the same bed together. Clothes were washed in the sink and hung on the line. If a button fell off, it was mended, not thrown away. Eating out was unheard of. After school activities? Go play in the street with your brothers and sisters. Wanted an allowance? Go get a job.

    My point is that there is nothing which says that you have to spend $250,000 per kid. You can choose the spend less, a lot less, if push came to shove.