If you were playing a word association game, it wouldn’t take long for somebody to put the words “children” and “expensive” together. According to Time Magazine, the average cost of raising a child born in 2007 to age 18 is $204,000. And that doesn’t even consider the fact that few parents cut the financial strings at 18. So we can all agree that the cost of having children is astronomical.
This thought dawned on me after (thankfully, not before) my first daughter was born. As a matter of fact, we were living and working in Israel at the time. It was then that I learned how expensive children were. I was working two jobs and quite literally could barely afford to pay for diapers after rent and food.
I was at my evening job when a nice man walked in and we started talking. After a while, he asked me how many children I had. I told him we only had one daughter and he asked why. I told him my diaper saga. He smiled and told me something I’ll never forget.
“Birds don’t starve because G-d loves them. You think G-d loves you less than the birds? Go have more children.” I’m a man who knows how to take direction. We went on to have two more lovely daughters.
Is faith a financial plan?
Regardless of your religious status, this man had a very powerful argument. At some point in all our lives, we have to have faith (and something else which I’ll get to). Because of my background growing up very poor and financially insecure, I was never willing to spend money I didn’t have. As a result, I was very reluctant to start having lots of kids before I knew I could afford them.
The need to be financially prepared may be absolutely correct in most aspects of our lives. For example, you may have great business ideas. But if you don’t have the money to launch the business, you better wait or find the money fast. You may really want to go to Paris, but if you are in debt up to your eyeballs, it would be a huge mistake to go. Is having a child before you can afford one any different?
Yes and no. If you decide to have kids even though you don’t all have the money right now, I’m all for it as long as you don’t rely on someone else to pick up your tab. And once you make that decision, you have a de facto new set of priorities in your life. You’ve declared that your children come first. That means you work out a plan to make more money if you need to. You may not have the dough right now, but you better have a strategy to get that money. Maybe it’s time to change your career. You think it through. You figure out how much money you’ll need and you work out how you’re going to get it. That becomes your priority above your other personal financial goals.
Everything in Proportion
I’m not talking about having enough money to send your brood to the most expensive prep schools and colleges. And I’m not suggesting you owe your children a high-end life style either. I know many wonderful families who still struggle financially. Just because you struggle doesn’t mean you can’t have kids.
I’m saying that when you have children, they become your financial priority. As long as that is true and you have a plan to support your family, go for it. Even if you are underwater now and need to get out of debt, I’d still go for it so long as you have a plan to fix the problem and you can execute that plan.
Where do you stand? Did you wait to have children until you knew you were financially stable, or did you go for it? Why or why not?
Ronald Dodge says
June 25, 2012 at 10:47 AMYes, I also believe in God. I can’t say enough about God as God has blessed me from birth on, despite all of the things I had to deal with starting from the age of 10 months old, when I ended up getting epileptic seizures and a learning disability primarily in language as a result of the combination of the high fever of 102F and right ear ache damaged a part of the temporal lobe area on the right hand side of the brain to cause both issues. While we may go through some very tough situations, he never gives us more than what we can handle. In many cases, we are to learn from these tough situations too.
Like you Jerry, I also believe in the fact, we are to take care of what we can, plan for what we can plan for to a reasonable extent, but then leave the rest up to God. Of course, I wouldn’t expect children to be able to do that, and according to the OT, God didn’t expect children (Those under the age of 20) to do these things either.
Given I been on unemployment for the last 13 months and I went back to college to finish out my Accounting degree (Currently have an overall GPA of 3.89 for 57 quarter credit hours), and I am also getting a minor in Information Systems to be completed with the degree in December (Will have earned a total of 95 quarter credit hours from UC to take my total credit hours of all 3 colleges combined to be 341 quarter credit hours), our networth has not been able to move up, but rather it’s moving down. However, it’s not moving down as much as one may think it would with all of this and having 5 girls to take care of.
While some may say things happen by chance, luck, or by coincident, I don’t believe in these things happening over the long-haul. While these things can happen occassionally, remember, when they do happen, it can be in either direction, good or bad. As such, I believe in the fact, you create your own luck.
One of my former co-workers told me, no matter what happens, I always seem to come out on the rosy side of the situation. That does seem to be the case. I believe that to be the result of the combination of 2 general reasons. First, I have done things to a much further extent with regards to planning and helping myself out as much as I can (Learned that lesson in 2 parts, the first part being I can’t depend on others back in the 4th grade, and the second part, I must strategize, stay within the rules of the game including the unwritten and untold rules, turn the rules around which others are using against me to beat me down, and beat others at their own game, which that part was learned in the 8th grade). Another words, you must do what you can to help yourself and your family, if you have one to take care of.
The other part is God himself. One thing I have found over the years, there are times when God has other plans for you, which you may not realize it until after you been through it and reflected back on it. However, while you are going through what God wants you to go through, he also provides for you as you go through it. You still have to be smart about it and not squander away, but none the less, you will still make it through if you do your part.
Many people at the university are wondering how I am doing it with raising 5 girls, and I simply been replying back what I deal with today is minor compared to the things I had to deal with as a child growing up. At least other than just God, today, I have a support unit while as a child, I really didn’t have much of any support outside of my physical needs being provided, but that still didn’t stop the daily beatings on school grounds or school officials treating me like I couldn’t learn anything. It was only God who carried me through it all.
My wife has been working on night shift, which that in itself is not easy to do. She only bring in about $15,000 annually, which doesn’t come close to covering all of the cash flow demands we currently have. However, that is still a significant help.
In some ways, I have had to use part of my student loans to cover necessary living expenses as a result of the various hassles the unemployment office has given me including looking for ways to cheat me out of the unemployment benefits.
I have also gotten additional help from the university which they didn’t have to provide that help, but they have. Some of it just by way of student aid, some of it brought on by the situation that happened, thus they corrected it, and some of it as a result of my hard work and thinking outside of the box.
Like the old saying, God help those who help themselves. I would only add to that, God also help out the little ones who don’t know any better because they are only learning and have no real reason to know better. I personally had to grow up and learn really fast compared to no kids, but still, God pulled me through that horrendous situation I had to deal with while being a ward of the state of Michigan for so many years. As such, I know I have been blessed by God all of my life.
Neal says
June 25, 2012 at 11:17 AMInspiring. Thanks for sharing Ron and Jerry…
Kelly says
December 12, 2011 at 12:00 PMWe kept putting of having a child until we were “ready” whatever that truly means and finally realized we would never be ready. I wish we had made a couple more financial changes but I’m happier being a mom.
Neal Frankle says
December 12, 2011 at 12:16 PMI am with you. For this kind of thing, usually it falls into place if you are willing to make it happen.
Ronald Dodge says
December 14, 2011 at 10:24 PMI also didn’t want to have to be scrimping so much either, but you know, you do what ever it takes to make it through. Currently, we are in a bit of a tighter spot cause of the fact I’m on unemployment. However, I’m using this time to finish out my Bachelor’s degree in Accounting, since I have not been able to locate reasonable employment. I figure, my job is either to be working or to be bettering myself.
I just completed my fall quarter at University of Cincinnati with a GPA of 3.72 for 18 credit hours, which this is my first time back in college in more than 15 years. For this winter quarter, it’s planned for me to take 20 credit hours with 12 of them in Accounting and the other 8 in other business core courses.
Some people thought I was crazy for taking 18 hours right away, and some people thought I was crazy for taking Calc 2 (Got an A- in that 3 credit hour course) and Business Stats 2 (Got an A in that 4 credit hour course) at the same time. For either of these 2 courses, I learned very little of them in the classroom itself, but rather I learned the stuff from reading the text book, pulling the process out of each step of the examples given, and then applying them to other problems, just as how one teacher at a residential school taught me how to learn for my own self. This is my primary means of learning as that’s how I learned to overcome the learning disability primarily in Language. But then again, this LD forced me to learn the art of memorization, which took 10 years to conquer it as a child, and I also had to apply my gifted skill of thinking logically. As such, with all 3 of these things combined, that’s how academics went from nearly impossible (failing in everything except for math in lower grade school years) to practically easy in most cases (graduated from high school with a GPA of 3.62, 10th out of 115 students academically with 25 credit hours instead of the normal 24 hours on my transcript, and college education only being higher than 3.62 after that). But then again, a lot of the courses I have had in college ended up being repeats of what I had in high school including the Accounting courses I had at Genesee Area Skill Center in Flint, MI for my junior and senior years of high school also covered the college courses of Computer Literacy, Accounting Information System, Financial Accounting, Managerial Accounting, Cost Accounting and Taxation. Sad thing about it, colleges won’t recognize it, and they say I must still take those courses as it’s part of the major with no option to test out of such courses. As such, I had to repeat those courses.
I would not say it’s easy as our networth is no where near going up with me having to go to college to finish out my degree. Unemployment don’t cover near as much (less than 50%) than what my income had covered prior to the lay off. Even with my wife working, her income added to the unemployment income both combined still don’t make up the money I had when I was working prior to the lay off.
As a result, I had to temporarily delay putting money into either the emergency fund or the retirement fund. My student loan payments automatically went into forbearance as a result of me going to college full time, which I wasn’t counting on that, but it happened, so it helped to some degree there. I ended up getting the rest of our court settlement money which was more than what I expected, so I used that money to pay down the mortgage to get rid of the MIP, and we are no longer paying for that, which reduces not only financial expenses, but also reduces cash flow demand in this case.
So while we have been in a tight spot, I still have been able to take steps to make the best of what we have to work with.
Rick says
December 5, 2011 at 8:21 PMWhen you have done all you can by your own efforts, God will make up the difference. He will not leave you comfortless.
Neal Frankle says
December 5, 2011 at 8:35 PM@Rick – that has been my experience — even though often (at the time) I didn’t recognize it.
Ronald Dodge says
December 8, 2011 at 1:04 PMYou are right about this fact of God helping us out for those of us who help ourselves out. Hence, one of the reasons why I have always said the following with regards to finances:
1) Do what you can for those items you can control
2) Plan to a reasonable extent for those things you can’t control, but can plan for such as current economic situation. One should know things will happen over time, just don’t know when or how.
3) For those items beyond your reach and beyond your capacity to plan for or to cover for with reasonable efforts, you turn all of those items over to God and let him deal with it.
This very model is what has gotten me through life as far as I have gotten through. I have seen God’s work in my life in so many different places and points of time. But one thing I know, we must do our part to the extent we reasonably can do as you can see from Matthew 25:1-30 with both parables, the one of the 10 virgins and the one with the 3 servants.
Neal Frankle says
December 8, 2011 at 1:20 PM@Ronald We don’t share the same religious faith but I absolutely agree with your 3 points. Well said sir.
Ronald Dodge says
December 5, 2011 at 8:03 PMBe careful what you are treading on. Incidents do happen like what my own mom has said, “People create accidents and accidents create people”. What that means, we as humans do end up having kids earlier than we planned on having the kids, thus make things that much harder for us.
I’m not saying this to make an excuse as we still have to take up ownership to having done this sort of thing, but there are times when families need outside help while at the same time, other families can afford to give additional help.
One thing I can’t stand is when people use others just for their own good and not attempting to help themselves out. For me, I figure my job is to be either working or to be bettering myself. Since I have not been able to land on employment, I went back to college bettering myself. This week is finals week for me, which I am half way through already. I am taking up 18 credit hours this term, and it looks like my GPA for this term will be better than 3.5.
Ronald Dodge says
December 5, 2011 at 7:43 PMI’m with you Rick. Like, you I also have 5 kids, though not in high school yet. I like to know what they factor into that $204k for the first 18 years of life. That works out to be about $11.3k per child per year. For me having 5 kids, that wouldn’t leave any money for my wife or myself with the income I was making prior to the plant shut down in mid May earlier this year.
My total actual expenses over the course of the year for this household size of 7 works out to be about $40,000. Currently, I am getting additional help, but this help is only temporary, not permanent. Even though the system is a broken system, I’m not letting the system to get me into thinking just short-term as most people would be. Instead, I am doing other things like right now, I’m taking up classes towards my Accounting degree, so as I can see about getting that higher paying job with the credentials under my belt. Bad thing about it and counting the 18 hours for this first quarter term, I will have 264 quarter hours under my belt (93 of them vaporized into thin air cause of the first college went belly up and the state board has no record of my credits from that college, even with me having gotten my Associates in Accounting degree from that college). I’m guessing I’m going to need about another 45 to 57 quarter hours more just to get that 4 hear degree in Accounting.
After all of the things I went through with the education system including all of the BS from this higher education system (Ultimately will have in about 320 quarter hours for a degree that’s typically about 190 quarter hours, yes, you read right, 190, all cause they don’t take credits from other schools and force one to retake those courses as they have done with me in years past even though there’s nothing new to learn), people wonder why I don’t like the education system. Hint, it isn’t the education itself, but rather how its ran that makes it bad.
Anyhow, for my actual annual expenses to be $40,000 annually for a household size of 7, it’s a far cry from the $11.3k annually per child. That would be more like about $6,000 per child annually. Of course, maybe some of the expenses may be on economies of scale as taught in economics.
Rick says
December 5, 2011 at 8:29 AMWe ended up with five children. Most of the time we had just one salary to raise them with. When it came time for college all five either got scholarships or worked their way through.
We found out that you do not need much in the way of luxuries though over time they come your way anyhow.
Children are not as expensive as many “experts” claim. Just be prudent with your finances and only borrow when absolutely essential. Remember, debt is worse than the plague.