Updated on 06.05.14

The Financial Realities of Growing a Family

Trent Hamm

Anthony writes in:

My wife and I have two children, ages 2 and 1. We’d like to have more; we both think that four would be a great number, although there’s no particular logical reason for that number. The problem is the expense. With daycare costs, adding each additional child will cost another $260 a month. If we stopped paying extra on our student loans and cut our savings per month to $145, we could afford the daycare for the third child, but a fourth would require more painful cuts. We already live frugally: buy used clothes, drive used paid-for cars, make almost all of our food at home, etc. I’ve looked into second jobs, but there’s very little IT work in the area, other than what I already do. And with our county having the highest unemployment rate in the state, I suspect even paper-route jobs and that sort of thing would be hard to find.

My job pays decently and is very secure: her job also pays well and is less secure, but still not much in jeopardy. In Michigan, that’s significant. We can’t sell the house without taking a loss, but it is big enough—barely—for two more kids. If we need to upgrade the car to a mini-van, we’ll have enough in our car fund that we can pay cash, so that’s not an issue.

I hate to make children about mere numbers, but purely by the math it seems like more children is unwise. On the other hand, I constantly hear stories from other families about how they it “somehow just worked out.” Any advice or suggestions?

Much like you, my wife and I have two children – ages four and two – and another one due to arrive within the next few months. The issue of escalating child care costs is one that we’ve dealt with many times throughout our child-rearing process and, through it all, we’ve come to some conclusions about that very occurrence.

First of all, the idea that it “just worked out” is a bit misleading. What often happens in that situation is that people go through a period of re-prioritizing after the child (or children) arrives, and it’s often a shift that happens without a lot of conscious thought. You choose to eat at home more because it’s easier to corral children there. You don’t go out as often as you used to because of the cost of babysitting. Over time, these shifts just seem completely ordinary – parents adopt a new normal along the way and often feel like it “just worked out.” Our memories often work to make things seem smoother than they actually were.

At some point if you continue to have children, the cost of child care will likely eventually meet or exceed the net cash benefit of one of your jobs. If you have three preschool-aged children (as we will soon), your weekly costs are immense. If you, at the same time, figure up the true take-home of one of the people in the household – after taxes, commuting costs, vehicle upkeep, wardrobe upkeep, and son on – you’ll often see that working outside the home is a financial net negative. Add on top of that the financial benefits of not working (even less reason to eat out, more organized grocery shopping, etc.) and you create a compelling case for one partner to leave the employment scene for a period of time.

What if you can’t afford to do this because you’ll be burying your career path? At this point, it’s really a values thing – your career is more valuable to you than more progeny. It’s one of those value comparisons where there is no real right or wrong answer – however, because it’s such an emotional one, people often convince themselves that one answer or the other is absolutely right for them and thus absolutely right for everyone. It’s not. You have to decide for yourself what you value.

If you decide that more children are the real priority here, then plan for it. That may involve selling the house and moving elsewhere – even to another part of the country. It may involve selling a vehicle. It may involve leaving a job. If your children are your priority, then sacrifice those life elements that aren’t directly benefiting the children.

If you decide that your continued career trajectory is the priority for you, take precautions to not have another child.

Your situation – much like our own – is basically asking you to choose between the two paths. Choosing one path doesn’t necessarily mean abandoning the other one, but it does mean postponing it to a later point in your life and it may mean that you’re unable to pick it back up again.

It seems to me from the email that you’re having a hard time choosing between the two. Right now is the time to sit down, talk with each other frankly about it, and make a choice. Is it career maintenance as the top priority or is it more children?

Give the decision time. Also, perhaps most importantly of all, give each other respect here. There is no right or wrong way to feel about the question and if you disagree, that’s okay. You both have reasonable perspectives on the issue.

You don’t have to make a decision tomorrow on this, but whichever way you choose, it doesn’t hurt to take a serious look at your spending and find ways to minimize it now. Build an emergency fund. Learn to live on a little less. No matter which path you end up choosing, doing that now will help you with the ramifications of that choice.

Good luck.

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  1. Misty says:

    The couple doesn’t specify their ages so I don’t know if this could be a possibility for them, but I’ve known several couples that have 1-3 kids when they’re young, and then wait 10-13 yrs, then have 1-3 more kids. 2 & 2 seems most popular (and the couple already has 2) since then they grow up with a close sibling to play with, and then later they have the second 2 so again, one child isn’t growing up alone. I know this might not match up exactly with what the couple has planned, but if they really want to have alot of kids it might work for them. You also get the added benefit of the older kids being able to help out with the younger kids (some help, don’t turn them into mini parents please!).

  2. Anastasia says:

    It seems to me there might be other solutions than one parent quitting work to take care of the kids.

    Maybe the couple could wait a few years, pay off their student loans asap, and be in a better financial situation to have another child? If they are planning on using public schools, waiting until one or both older children have graduated from daycare to school is another possibility.

  3. Julie says:

    I don’t know. Having young children, especially if you want to double the number you already have, really requires a healthy nest egg. We toyed with the idea of three kids, but stopped at two–we just felt we’d always be stressed about money, quality time with the kids, couple time, and alone time.

    For us, it was the right decision. My husband (also in IT) went through a period of unemployment right after the birth of our second; I was a SAHM. We had 6 months of savings and we cut finances (not many, since we were already frugal), but still, we had to predict when/if I should go back to work–not as easy with kids needing childcare. Luckily my DH got a job, and now that my youngest in in school all day, I’m back to work.

    Our kids have always been healthy, and we don’t go overboard on activities & toys, but still, the cost of insurance, food, gasoline, etc. has gone up. We thought we’d travel a bit more with the family than we have, but those costs have gone up, too; so the extra money I bring in helps pay for expenses as well as going into savings and retirement.

    We’re now at a point where we can beef up the savings again (in time to replace windows rather than fly somewhere warm for vacation–sigh.) But it feels so good not to be stressed. Just offering you another viewpoint of the “maybes” that you might need to plan for. You have to decide what is best for your family. Good luck with your decision!

  4. This comes down to YOUR values. Trent was very clear on this in his response and I think it was right on.
    I have a friend whose been married 20yrs and no children (by choice). She’s very happy and although we have similar incomes she spends her money incredible different than I do primarily because mine $ goes to the kids!
    You don’t need to make this decision today- so keep mulling it over.

  5. Nicole says:

    Unless your wife is in her 40s, nobody says you have to keep having kids one or two years apart. At some point you won’t need to be paying daycare for the oldest two and at some point one of your cars will need to be replaced anyway so the marginal additional cost of getting a mini-van won’t be as high. Heck, at some point they’ll be old enough to bring in some of their own spending money if that’s important.

    Getting a second job to be able to afford more kids seems a false economy– working full time there already isn’t enough time to enjoy the current kids (at least in my experience, as much as I love my job).

    If you do decide to have 4 kids all at once, you may be able to save on daycare by hiring a nanny rather than having 4 separate daycare bills.

  6. Maureen says:

    Another consideration is your future children’s education costs (assuming that you will wish to help out so that they don’t face the same student loan debts you do). The degree to which you want to help out is a personal decision (don’t really want to reopen the debate.)

  7. Mike says:

    We have three kids 5, 3 and 1. With the last child my wife stopped working(full time) because of the child care issues mentioned in this article. We have found that her working outside of the home one evening a week is far more benficial than a full time job. Because I am home when she works, no child care cost. We don’t budget her earnings, so its and 80 to 100 dollars a week above and beyond our basic needs. It doesn’t sound like much, but it makes a huge difference.

  8. triLcat says:

    If you’re not pressured (biological clock), I would definitely consider the option of waiting until the first starts kindergarten or first grade to have the third.
    The nanny option has the disadvantage that preschool does have a level of value over and above just keeping the child safe and fed, but is worth considering.

  9. Michele says:

    Just a note- if you plan for one spouse to go back to work after the kids are in school, you WILL continue to have daycare costs. There are always teacher meeting days, or teacher training days, or parent-teacher conference half days, late starts, furlough days (at least here in Oregon and in California) spring and Christmas break, state and federal holidays that most employers don’t give off (Columbus Day for example or Veteran’s Day) and your kids will get sick.. and of course, summer vacation.
    So unless you have local grandparents who will fill in the gaps, you have to take that into consideration. My husband and I had an au pair from Europe for this reason when the boys started school.
    I work with a woman who has 4 kids under the age of 9 and she is out for school days off or a sick kid at least once or twice a month. Since her husband has the bigger salary, she is the one who has to leave early anytime one of her kids gets in trouble at school or acts up or has a headache. Since the public schools in our area cut nurses or even parents in the nurse’s office, they call parents to pick up their kids if they have a headache, or a scratch or are crying for no reason! These type of occurrences are something to consider and you should not assume you will be able to return to the exact type of job you left before having children- or that you will have an understanding employer who will allow this type of flexibility.

  10. Sam says:

    While #9 (Michelle) has a good point, I don’t know if I’d totally agree with her. Our school district has the most inservice days (teachers report, kids stay home) in our state.
    And while yes, I do have to take a day off here & there… it in no way compares to full time childcare. When mine were in daycare full time I paid 5k annually for care (I claim it on my taxes so I actually add up the cashed checks). Last year my kids didn’t go for any summer visits to anyone and so the school age care tab got the highest it’s ever been, I paid about 2k – that’s a big, big difference from the 5k when they were in diapers. This summer they are staying a week with my brother & a couple weeks with some grandparents so the bill will be lower.
    Also, they do get to a point where they will want to spend some of the inservice days at friends houses. The last two service days my son has hung out with a buddy whose Grandmother watches them for free. So that cuts down on childcare a smidgen too.

    Personally, I’d wait till the youngest is in all day school and then have the rest of the kiddos. After school daycare here is 35 a week compared to 100 to 125 a week for full time baby care so the savings is significant. Then, to even it out for service & break days I budget for two full time daycare days at 20 each.
    Also if you have the kids with that type of age gap, that means that when the oldest is 13 they could possibly watch the younger ones once in a while (depending on maturity & such)which could be more savings.
    I’m only looking at the childcare aspect since that seems to be the main concern (and for good reason).
    One other idea – and this is just pure brain storming… depending on the couples skill sets, I know a few people who found jobs at the school system (as secretaries & teachers helpers) so they have most of the same days off as their kids. Same thing for most Federal employees – they get many of the same holidays.

  11. mellen says:

    I wish more people would make it more about the numbers, there are far too many people in this world who have more children than they can care for and that is not only irresponsible but it’s not good for the children. If you have 4 children and can barely make ends meet, what happens in the case of a catastrophic event like illness, job loss, etc.? I’m one of five and my parents definitely couldn’t afford to have 5 children. We always struggled; why would you do that to your (current) children? Consider the needs of the children you have, not your or your hypothetical future childrens’ needs. Isn’t that what we agree to implicitly when we decide to have children, to put their needs before our own for the rest of our lives? From what I see, not everyone does that but I think they should.

  12. Tami says:

    My husband and I both work full time and we have four kids — all born within six years. My oldest was just starting kindergarten when my youngest was born. The cost of daycare is killer and has been a real challenge. There were several years where we paid more than $25,000 per year. Now I only have one in full time daycare and the others only in daycare during school breaks (no before or after care for us) but it still runs about $9,000 a year.

    An even bigger challenge for us has been sick days, snow days, doctor visits, dentist visits, and sport/school activities that start before we normally get home from work. Spreading the distance between kids would have made the monthly daycare a little easier to handle, but now that my oldest is 11 I am finding that his activities/sports are getting more expensive.

    We did have to buck up for the minivan, but we stayed in a smaller house (mostly because we loved the neighbors and didn’t want to change schools) because I was too nervous to make the jump to a bigger payment. We opted for public school instead of Catholic because while I knew we could afford the grade school tuition we would never have been able to afford the $10,000 a year for high school and still save for college.

    Financial challenges aside, I would not trade having a family with four kids for anything. This is the kind of family we wanted — lots of kids, lots of friends around, and never a dull moment. Our life is full and fun, but it is hardly every quiet and in control. Deciding how many kids to have is more than financial and there is nothing wrong with having a small family (or a large one for that matter).

  13. I’m pregnant with our first child and looking at the expenses we currently have with our income and what we could pare down on majorly we decided that I would stay home. I never wanted to have a child while working because I feel like the responsibility of raising a child should be on the parent, not a random daycare worker. I understand other people’s choice to work but for us, the sacrifice is worth it.

  14. Honey says:

    My partner and I are completely opposed to having children for a variety of reasons, but I am always fascinated by how other people manage, especially if they have multiple kids. Interesting post.

  15. Claudia says:

    I agree with #11, it may sound mercenary, but when considering having more children, it does need to come down to numbers as in $$, I would have loved to have had another child and was very jealous when my sister did. But, we knew we could not afford any more and provide for the ones we did have.

  16. vern says:

    My wife and I agreed to stop at ZERO children. ;)

  17. Steve says:

    Good one, “Live on a little less” is something that every family should think about…

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