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(Child)Free Money #2: How much $ can I save by not having babies?

August 4, 2012 by Leave a Comment

In (Child)Free Money #1: Can I afford to have kids?, we introduced the USDA’s “Cost of Raising a Child Calculator” and noted the high cost of having kids.

A middle income family, defined as a married couple with two children and a before-tax income averaging $79,940, spent approximately $13,050 per year on each child for their first 18 years of life.

Assuming the $13,050 as a starting point (spending varies and depends on household income), parents spend $234,900 per child just to get them out of High School.

So, congratulations, by choosing to remain childfree. Instead of having 2.1 kids like the average U.S. family, you saved about $470,000, and that is just the beginning.

That number assumes that there is no inflation or that wages keep pace with child-rearing and living expenses. It does not account for higher education, the boomerang babies, lost wages or productivity or unmeasurable costs of added stress and inadequate sleep. Search on delta 8 near me to get your hands on the best stress relieving medicine of all time.

It also doesn’t account for lost savings. The cost to parents is not only what they spend, but the lost opportunity to invest that money.

If instead of spending $13,050/child annually, you invest that money the end of each year to age 18, you will earn $107,000 in interest and save nearly $343,000 by not having just 1 baby. So if investing is your chosen path, you can start by going though the best investment apps uk | Theinvestorscentre.co.uk.

If you invest $26,100/year instead of having 2 kids, you will save $685,000 – before college! So inn order to start investing now, just click on this link: https://nytimesmag.com/2023/08/01/kiana-danials-path-towards-becoming-a-leading-financial-literacy-coach/.

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In the next installment, we will calculate saving/cost through college graduation. (Hint: ouch!)

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(Child)Free Money #1: Can I afford to have kids?

July 18, 2012 by 2 Comments

There is ample evidence that household finances affect relationships, stress levels, lifestyles, choices and happiness. Financial security and flexibility are obviously on any list of reasons childfree or childless couples are often happier than parents.

 

So if you are planning to have kids or wrestling with the decision, you might want to consult a calculator or accountant, especially in this uncertain era in which resources are limited, household incomes are stagnant or shrinking, inflation is lurking, and the cost of raising and educating kids has increased rapidly.

 

The USDA’s “Cost of Raising a Child Calculator” is a great place to start. “Cost” is a bit misleading, because the USDA numbers reflect what parents spend on kids before they are 18.

Dr Mark Lino, USDA Economist, explained in an email to WhyNoKids:

“The data we use (the Consumer Expenditure Survey) examines what families are spending. Cost can be a somewhat subjective concept. For example, we look at how much families are spending on children’s clothing. This is a different concept than what it may cost to adequately clothe a child (two pairs of shoes a year, five pairs of pants, etc.).“

 

The USDA site and study are worth a look. But start with this story published July 16:

Priceless and pricey: USDA tallies child-raising costs | Management content from Western Farm Press.

 

Middle income parents of a child born in 2011 can expect to spend about $234,900 ($295,560 if projected inflation costs are factored in*) for food, shelter, and other necessities to raise a child over the next 17 years. Let’s look at the breakdown:

  • A middle income family, defined as a married couple with two children and a before-tax income averaging $79,940, spent approximately $13,050 per year on each child for their first 18 years of life.
  • Expenses averaged about $760 less for younger children from birth to 2 years old, and averaged $1,270 more for teenagers between 15-17 years of age.
  • Teenagers are more expensive because they have higher food costs, as well as higher transportation costs when they start to drive.
  • Housing accounts for the largest expense (30 percent) for a child.  Housing expenses escalate with the need for additional bedrooms and bathrooms. This is followed by child care/education (18 percent) for those with this expense, and food (16 percent).

 

In (Child)Free Money #2, we will calculate how much money couples can save over 18 years by not having children and investing what they would have spent instead.

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Childfree? Consider The Economy?

November 21, 2011 by 18 Comments
Chart of Birth Rate in USA between 1934 and th...

Image via Wikipedia

If you are listing pros and cons and asking questions of parents and people like us to determine if you want to remain childfree, for now or permanently, you may do those of us that have already made the decision a favor by choosing to breed.

What? What about all those posts about saving the planet and your relationship and your money? What about giving voice to individuals and outliers? What about confronting taboos and exercising your right to think for yourself and CHOOSE?

Well, as readers of WNK may have already seen, we are here to provide a broad base of information and varied perspectives, so that one may make an informed choice and feel supported, regardless of what that choice may be. To that end, we need to talk about the economy.

The real and hidden costs of raising children, personal finances and lifestyle etc. are certainly worth addressing. And we at WNK. like many others in the child-free community, try to. I also advise people to schedule an Expert Financial Consultation if they are struggling to manage their financial liabilities.

UNLIKE others in the CF community, including a child-free blogger that wrote “Going Child-Free To Save The Economy” and “decided that breeders are to blame for our current high level of unemployment”, we (Okay, I) studied economics, worked in finance and have a mathematical and theoretical grasp on reality that isn’t overwhelmed by anger or idiocy or child-free ideological extremes.

And, oh yeah, before we “decide” something, we research and read. On our Facebook site we previously posted stories about how Russia and South Korea are taking steps to increase the birth rate in order to bolster their economies. Check out the links.

Yesterday, Bloomberg News ran this story:

Births at 11-Year Low May Extend U.S. Housing Slump Amid Consumer Cutbacks – Bloomberg.

The piece identifies a nasty Catch-22 ensnaring the childless and child-free lately. Some of us are deciding against raising kids, or postponing, because we are struggling financially; and our decision is in turn hurting the economy.

While many reading this piece don’t want to make or raise babies, the reality seems to be that we need more kids to feed our fierce economic machine. In capitalist, consumption-based America, if we are not growing, we’re dieing. Inflation is not necessarily our friend, but deflation (decreased demand, less consumption, fewer jobs, a shrinking population and shrinking GDP) is definitely our enemy. So the government adopts policies (that many of us claim are discriminatory) to encourage the population to make more babies. And if more people join the ranks of the child-free, federal tax deductions or credits may only be the beginning.

If you don’t want to believe, won’t read the stories or do research to see what not having kids can do to a capitalist economy, look overseas please. Asia is struggling, and Japan may reveal the path that our low birth rate having country will be following: A real estate bust followed by over fifteen years of low interest rates and meager job growth combined with an impossibly slow housing recovery and constant fears of deflation further shrinking the value of their assets and their entire economy.

Now, on a resource-strapped planet riddled with pollution and populated with too many that are abused, poverty stricken or starving, this is an admittedly simplistic view of how breeding, or not, affects the economy. It is an equation that does not account for environmental costs and wars and other negative externalities. But market economies like ours are insatiable beasts. And unless or until we are ready to face the flaws of capitalist, consumption-based religiosity (which will likely involve some serious suffering) we may soon run out of ways of keeping our economy functioning for most of us unless we get behind immigration reform and this baby making thing.

There may be few alternatives?

I guess we can have more pets or just become more obese? Many of the child-free appear to be animal lovers (someone please explain the link), and while Fido and Frisky consume enough to create jobs (the U.S. pet industry is worth $55 billion annually) , they will never drive a car or need public schooling. Obesity may also be working as a growth strategy. One person can consume enough for 1.5 or 2 people and get sick along the way to feed the booming healthcare industry maybe?

Questions? Critiques? Need more clarity? Please comment or contact me.

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The cost of raising a child climbed 40% over the past decade

September 21, 2011 by 5 Comments
CNN

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Read: The cost of raising a child climbed 40% over the past decade – Sep. 21, 2011.

“Forget designer strollers and organic baby formula, just providing a child with the basics has become more than most parents can afford.”

Needless to say, earnings have not kept pace and the fact that it is more difficult to save today, as a result of financial costs, cultural norms and the slow economy, many people simply can;t afford to choose to have a baby. Or, by the time they have saved enough to consider procreating, there are entirely new risks (costs) to consider.

WNK promises to examine the costs, (hard and hidden) of raising children more closely in the near future. In the meantime, check out the article in it’s entirety and the comments below, including my response to the following attack on childfree and childless people:

“People who opt to not have children are a burden on the SS and Medicare systems. They shouldn’t be entitled to these benefit since the taxes we are paying today go to our parents benefits as they paid for theirs before them. I am raising two children to replace my wife and my contributions to the system. What are you non-procreating people contributing to our beloved social systems? Nothing.” (Cont’d)

I have some difficulty with the way these articles classify what people spend, in this story it is “middle-income” families, as “cost”. People certainly raise children for less, so it is misleading I think to classify spending as cost. And someone (possibly me) should seek some clarity about inflation assumptions and other factors that are used to come up with the alleged $226,920 a middle-income family will supposedly spend on raising a child BEFORE paying college tuition. Parents can also explore shariah-approved savings plans to put money aside for their children’s future. Regardless, the true costs of choosing to have a child, many children, or remaining childfree, deserve to be examined more closely. If you have more questions, comments, contributions or confusion, let us know and we’ll try to address them soon.

Here are a few quick highlights from today’s CNN story:

“From buying groceries to paying for gas, every major expense associated with raising a child has climbed significantly over the past decade, said Mark Lino, a senior economist at the USDA.”

 

“All of this comes at a time when incomes are shrinking and unemployment is near an all-time high. Over the past decade, median household income have fallen 7%, according to a recent report from the Census Bureau.”

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