Can you afford another child?
People are really thinking about finances when they make decisions about conception, and many struggle with being a working mother vs. staying at home.
I hear this more often that you’d think: “I wish I could make more homemade foods, but I just don’t have time with working all day.”
How many people do you know who have children yet don’t see them 40+ hours a week because they “need” both parents to work to sustain the family income?
Will Princess Leah get fewer birthday gifts when baby brother comes along? And would she (gasp!) survive that downgrade?
Many working moms have guilt about the time spent away from their kids, and many also wish they could do more for the family’s nutrition but simply cannot balance it all.
It’s a tough spot to be in, but if the numbers released recently by the U.S. Department of Agriculture are correct, all those dual-income families may be right. They’ll need $12,000 a year per child to raise them for 18 years, not counting college savings. Three kids easily consumes a full salary after taxes.
In a move that is overwhelming parents across the nation, the government has estimated that it could cost $226,290 to raise a child born in 2010.
That figure intimidates me at first glance, particularly considering we’re having baby number three in a matter of days here. And I’m not alone: 2 out of 3 moms in a recent BabyCenter.com survey said that money concerns will affect how many children they have.
As a Catholic who is open to life and strongly believes children are a blessing, and that families should prayerfully discern expanding their family each month while using natural family planning, it hurts my heart that money is such a strong deciding factor.
Don’t hear me wrong here: I definitely don’t believe all people should have as many children as possible. Prayerful discernment should include such things as the parents’ ability to cope with one more, the best interests of the other children, the overall physical and emotional health of the family unit, and the family budget.
However, when I see outrageous numbers like a quarter million dollars per child, I’m ready to pick those figures apart in an intense discussion of wants vs. needs.
I was invited to interview Jean Chatzy, financial editor for NBC’s Today Show, who was dishing advice on “Can You REALLY Afford to Have a Baby?” based on these numbers. That subject line in my email certainly caught my eye!
I have to admit I was initially concerned that the advice would end up very in line with the culture: be prudent, wait to have kids, have a smaller family, etc., allowing children to sound like a burden. I was more than pleased to see that the focus was “Have the baby!” and then how to save money while raising a member of “the recession generation” being born right now.
Who Interviews Whom?
Is two enough?
As tickled as I was to chat with someone I had just seen on morning television, as I prepared questions for the interview I found myself wanting to share as much information as I wanted to ask Jean for hers! Our budget from 2005 demonstrates that we spent less than $600 on baby things for our first child, diapers included. The budget is mostly diapers, in fact.
If we add in the $105 in medical copays for him that year plus the added cost of the family medical insurance plan and the small amount I spent on baby food, since I made most of it from scratch, I feel confident saying that we spent less than $1000 in that baby’s first year of life.
That figure is such a far cry from $12,000 that suddenly I had plenty of questions:
- What in the world is included in the $226K to raise a child?
- Aren’t there about a bazillion ways to spend less than that?
- Why could I spend so little? Have economic times changed that much in five years, or do most middle income families included in the study simply spend that much differently than our family?
- How can we evaluate the value of a mother staying at home vs. working?
Are You Curious Too?
I’m guessing the readership here at Kitchen Stewardship, where we focus on saving money and eating such incredibly healthy foods that one pretty much has to make from scratch, also crunches their child-raising figures far below $12,000 a year per kid.
Jean Chatzky explained that the $226K estimation does include everything, even a portion of the home mortgage and car payment – which assumes that you’d need a larger house and larger car to fit the family.
Immediately one must pose the question of wants vs. needs. As someone currently living with her in-laws because we’re seeking a larger house, this may sound ironic coming from me. However. We are living within our means wherever we end up, so even though we want a larger house, enough so that we’re making some serious sacrifices to get the right one, I regularly clarify that we do not need anything more than we had.
We could have had a perfectly happy family life in our old 3-bedroom house with the tiny kitchen (and yes, some days I get scared of the unknown end of the tunnel on this journey and just wish we had stayed there in the comfortable “known”). Even four children would have fit just fine in two bedrooms, since children don’t need their own room and often actually benefit from the lessons learned from sharing their space with a sibling.
Are Two Babies Cheaper Than One?
This question of “Can you afford to have a baby?” seemed much more geared toward couples who already had a child or two and were considering expanding their family as opposed to the childless couple wondering if they should start a family or not. If numbers alone are the deciding factor in “kids or no kids,” it hardly seems to matter what the statistics say. Of course it will cost something to have a family; the real question here is how much per child?
Some of the figures included in the $226K are certainly legitimate – most middle class folks will choose to drive a minivan and have an extra bedroom in their house once they have one or two children. There is a cost there. However, the jump from compact car to minivan only happens once.
I maintain that for families considering expanding their family, it couldn’t possibly cost $12,000 per year, per child. Each child has to end up making less of an impact on the family budget, because you’re already driving the minivan, you already have the crib, changing table, car seats, bikes, swingset, ETC. And if you’re a frugal gal like me, you borrowed or found second hand all of those items except the car seats!
Jean Chatzky agreed that it’s possible that additional children will cost less but was quick to remind me that there is always a “breaking point” at which another child will require a step up in some of the big costs like house and vehicle. In fact, the statistics from the study that made her “open [her] eyes the widest” was the number of moms who said, “I would like three, but I feel like I can only afford two.”
If I really thought this child sitting on my bladder would cost $12,000 this year, and $12,000 the next year and so on, I’d probably be frightened into saying the same thing. Numbers like a quarter million dollars do little but incite fear in young parents’ hearts across the nation.
You can raise a child for less.
Particularly once you already have kids.
Keeping up with the Joneses: Wants vs. Needs
May I state for the record that children do not need very many toys? Children do not need piano lessons or hockey travel teams or yearly vacations to Disneyworld or YMCA memberships. Babies do not need all the gadgets in a Babies ‘R’ Us catalog.
As it turns out, Jean readily admitted that most people spend more than $600 in their child’s first year of life both because times have changed (prices increased), but mostly because most people don’t think like me. They don’t always borrow, buy secondhand, and seek frugality.
For example, I spent a mere $21 on Paul’s first winter coat, his high chair, and twin bed sheets and comforter that lasted from age two to five. We bought our baby gate new ($20) but only $13.25 on a pair of shoes and his first birthday gift combined. That high chair and baby gate will not need to be purchased again as we head into baby three. Children are simple, if you let them be.
We spent $45 this summer on tee ball for our 6-year-old. But if that money wasn’t in our budget or if we had to find a place to cut, I guarantee we would have chosen to simply play more catch in the yard, organize a few kids to practice skills, or get smart and realize the YMCA offers a free league just down the street.
I could choose to spend $50-100 a month to give my child the experience of Gymboree, or I could spend nothing and regularly attend library Storytime and Bright Beginnings, a free program offered by the school district twice a month.
I can see how many figures could add up quickly while raising a child, but these “wants” that many see as necessary also inflate the average that people spend. I’m not most people, and I’m happy about that.
The Value of a Stay-at-Home Mom
Hot, bedraggled, wearing all secondhand clothes – we’d never make a magazine shoot – but we’re having fun family time using our zoo membership that I ask for as a birthday gift each year.
I could dress my kids in gorgeous, matching, brand new clothing every time they change a size and spend a fortune, or I could shop second hand, accept hand-me-downs from friends, ask for clothing for Christmas and birthdays, and borrow from friends. I’ve purchased practically nothing for Leah to wear beyond a few packages of underwear because a mom in my Bible study is lending me her oldest daughter’s entire wardrobe, while I lend her Paul’s wardrobe for her second, a boy. (More on saving money on kids’ clothes.)
The value of having a network of other moms and time to hit a garage sale here and there is monumental to our finances, and I wouldn’t have time to do it if I worked part or full time outside the home.
I also wouldn’t have time to shop for food wisely, whether that means couponing or visiting various stores to shop sales or farms to find the best produce I can. I wouldn’t have time to make my own bread or cook nearly every meal from scratch. I might not have read about making homemade yogurt when Paul was 9 months old, a process that enables me to make 1-2 gallons of yogurt for our small family every week.
I save $9 every time I make a batch, and it takes 15 minutes. $36 an hour is a pretty good salary for a stay-at-home-mom, don’t you think?
You may have seen the studies that factor how much it costs to work outside the home: taking into account daycare, gas to commute, professional clothing, lunches out and convenience foods necessary to work 40 hours, many women are working for a few bucks an hour. I’ve even seen some figures that demonstrate that a mother would save more just staying at home than she would working.
When I asked Jean Chatzky how to quantify the value of the stay-at-home-mom’s “job,” she began by saying that “Stay-at-home-moms get all the credit in the world from me because their job is so much harder than my job.” However, she continued, unless one is looking at how much life insurance to buy for a mother to cover all the jobs she does at home, Jean didn’t think one needs to ask the question, “What is this contribution worth?” but rather, “Can we afford to do this?” and still afford our lives?
She recommends that during pregnancy, a couple should try to live off one income and bank the second as a good test of that question (and a great way to get that “just in case” nest egg as well). Here are a few resources if you’re contemplating making the switch from two incomes to one: BabyCenter.com’s Cost Calculator and Chatzky’s budget worksheet.
I maintain that a stay-at-home-mom who makes homemaking her profession, her vocation, can have a quantifiable “income” in the money she can save her family (considerably knocking down the $12,000 a year that other people are somehow spending on their kids!). The question then becomes, Jean reminded me, “How many moms are like you?”
“Are moms actually going to clip coupons or make from scratch, to make that their job? If that’s true, absolutely, you can attach a higher value on your life as a stay-at-home-mom. …You’re really saving your family significant money because that’s added value.”
Of course I told Jean I’d teach her to make homemade yogurt too. I tweeted the link to @JeanChatzky (follow her there for smart money tips, and even join the conversation on #thecostofraisingkids).
If you’re a regular reader, it won’t surprise you that I have MANY ways to save money, both on the food budget and everywhere else. Some of the more significant impacts include:
- Eating beans and cooking dry beans at least once a week (as I detail in The Everything Beans Book with 30 recipes)
- Making homemade chicken stock regularly
- Buying in bulk
- Using basic homemade cleaners
- Eating soaked oatmeal for breakfast
- Relying on leftovers for lunch
- Avoiding expensive pre-packaged snacks as I attempt to make homemade snacks to go
- Making homemade LOTS of things (See recipes tab for ideas)
- Menu planning to avoid last minute store trips and falling back on expensive convenience foods, as well as making sure I don’t waste food I buy because it’s all planned in.
Where’s the Silver Lining?
The real positive outcome of this recession generation may be in how the children grow up looking at money. The parents who are having kids right now are being forced to handle their finances differently than even five years ago. They are learning to save, to be frugal, to discuss things like wants and needs.
Jean says it will be interesting (and hopeful, I think) to see what kind of savers and spenders the children born today will grow up to be. We need a new renaissance of frugality, and this may be it!
Financial Advice to Have that Baby!
I thanked Jean at the end of the interview for encouraging people to “have the baby!” and not wait until they feel perfectly financially stable. If couples waited for financial stability, no one would ever have children!
As a parent of someone in the recession generation (or a grandparent who needs to pass this information to their children), here are Jean’s best tips for keeping your finances in order:
- “If I can get moms to do one thing, it’s save money!” she said emphatically.Go through your spending line by line and figure out where to make cuts in every single category. “The more stress your finances bring to your marriage, the more likely you are to get divorced. Families that save money – assets vs. debt – are so much stronger!” It’s not always fun to save rather than spend, but having that money allocated for the future ends up fun because it allows you to dream.
- Save for retirement over college. While it’s nice and generous to help your kids through college, they can get financial aid for that. There is no financial aid in retirement, and it will really hurt your kids if you have to end up turning to them for financial help just when they’re trying to raise their own family and save for their future.
- If you do have the $5/week or month to save for college, get a 529 savings account for sure. Savingforcollege.com will get you on the right path to the appropriate plan. And make the savings happen automatically so you don’t even miss it. As soon as the $5 feels easy, bump it up to $6.
- More from Jean Chatzky HERE at BabyCenter.
- And Katie’s personal advice: always consider wants vs. needs when studying your budget and discerning family size. Pray about your kids and your finances, offering them to God and trusting Him to take care of you as He does the birds of the field.
A Final Thought Nugget
When I read this philosophy on family size, it was a revelation to me.
Our children certainly impact the country and world we live in, right? One of the big problems in the news today is that Social Security is dying. Why? Partly because there aren’t enough young working adults to pay into the system to take care of the elderly generation.
If we have fewer and fewer children, there will be fewer people paying into Social Security, fewer taxpayers, and more needs for caretakers for the elderly as their health declines. Are we damaging our economic security by raising small families at less than the replacement rate nowadays? Just a little something to think about…
How about you? What are you best money saving tips for raising children? Do you think about finances when deciding whether to expand your family?
And how much do you think people really have to spend on a child from birth to 18?
If you appreciated this post, share it with friends or click the +1 button to tell Google I’m worth my salt. Thanks!
Keep up with the conversation and find money-saving food tips all the time! Sign up for a free email subscription or grab my reader feed. You can also follow me on Twitter, get KS for Kindle, or see my Facebook Fan Page.
If you missed the last Monday Mission, click here.
See my full disclosure statement here.
Join our Facebook community so you never miss an update!