Through some kind of hilarious misunderstanding, the universe has decided to give us another child. That’s right: my wife is pregnant, and when she gives birth our children will be somewhere between 14 and 15 months apart. As you can probably tell, we were surprised by the news, and as planners we don’t necessarily like surprises. We’re the type of people that make detailed checklists for how a day is about to go, and then laminate the checklist. But that said, though we’re realistic about how crazy our lives are about to become, we’re excited and positive about the future.
Most importantly, we’re not worried about money. This isn’t because we’re independently wealthy by any means. Instead, I’m sanguine about our financial future because I’ve found that almost every alarmist article about the high cost of raising children to be flawed at best and disingenuous at worst. Most throw out a gigantic, one size fits all number between $100,000 and $1,000,000 and conclude that it’s not even worth trying to make a plan, because you just can’t do it. This makes me laugh, because study after study shows that the average person has no such amount of money to spend, and yet there are children everywhere, most are fully clothed, and very few of them are being raised by wolves. None of these articles say what I’ve found to be true: that this number is not given from on high, but is one that you can choose based on your means, goals and philosophy. I’ll outline some reasons for this below.
People give you stuff
And I’m not even talking about the baby shower. The fact is, kids grow out of clothes and toys before they can wear them out. Once these objects are no longer of use, people want them out of their houses. Once my wife announced our first pregnancy, friends and family starting coming out of the woodwork with baby items. They wanted to help us for sure, but they also wanted to get rid of stuff. One friend dropped off a carload of toys and literally screeched her tires leaving our driveway. My wife and I have not had to purchase one toy or baby item besides the consumables: diapers, food, etc. If you don’t have friends or family in the area, check Craigslist or Freecycle for some of these items (realize that some items, like car seats, should be purchased new for safety reasons).
You can trade time for money
For six months, my wife and I used cloth diapers exclusively. In that time, we didn’t spend another dime on diapers save the cost of washing them. We didn’t mind the extra work, and appreciated the savings and environmental benefits. We also blended up our own baby food and used cloth wipes. Then my wife went back to work, our daughter went to daycare, and suddenly time became very scarce. Soon after that, we added disposable diapers to the mix and began storing baby food for emergencies. Looking back, what we were really doing was trading a little money for some of our time back. If money were tighter, we could trade in the other direction. Most of the recurring expenses of raising a baby can radically reduced at the cost of some convenience.
You need less stuff than you think
Since parenting is so challenging, especially in the first few months, whole industries have cropped up to sell unnecessary objects that make your life 1% easier. We found that half of the stuff we received barely got used. The funniest one to me was the bottle warmer, which seemed to do the same job as putting the bottle in a glass of warm water. Bottom line: think through what you actually need, and sell or bring back unnecessary items.
Estimating college costs are a fool’s errand. The big-ticket item in most of these articles is that perennial parental headache: college tuition. Whole industries are based around scaring parents about the cost of college, which if it increases at its current rate will cost somewhere between $300,000 and $1,000,000 by the time my children are 18. I advocate opening a 529 plan and trying to save as much as you comfortably can to help your children afford college. But I think foregoing your own retirement savings in order to chase what you think college could cost is like holding onto a rope made of sand. We don’t know what college will even be in twenty years or how much it’ll cost. We’ll do our children no favors by trying to pay their way through college and going broke in the process. Remember, our children can always get a loan for college. A loan for retirement: not so much.
It will not cost zero. Sorry, but I have to be honest. Your child is going to cost you more than not having a child. They eat food. They get sick. Some of the expenses cited in these articles are accurate. Personally, we’ve found that the cost of childcare is real and a bit scary. We currently pay $225 per week for our daughter’s day care, and with two children this will raise to around $400 per week. To me, this is a ton of money (almost $21,000 per year!!). But it will be reduced by some tax credits and a Dependent Care Spending Account (DCSA). And even this expenditure is, in its own way, a choice. We turned down far more expensive options in our area. And we could save every dime of this money by staying home with our children. But we’ve crunched the numbers, checked in on our feelings, and decided that this is the best choice for us.
There’s one quote in a CNN money article article that in my opinion gets to the heart of the problem: “The biggest price tag is for families in the urban Northeast earning $105,360 or more. They will spend $446,100, much more than the national average…”. If the people who actually make enough to afford the proposed cost of raising children simply spend more in classic “keeping up with the Jones’s” fashion, then no income will ever be enough. This is not a math problem; it’s a philosophy problem. We shouldn’t look around us and simply spend one dollar more than our neighbor. We need to understand our values and what we want our child’s life to be like and weigh it against what is possible based on our means. We choose whether we spend our time in parks or at expensive lessons. Whether we buy the biggest car to cart the most children to the most events, or whether we live walking distance to fun, inexpensive activities. My children’s lives will not be one big bonfire of hundred dollar bills unless I want them to be.