Myth #9: Only The Best Will Do for My Kids

Do you have any idea what it costs to raise a child? Are you sitting down? It’s a shocker.

According to the U.S. Department of Agriculture, a middle-class couple will spend almost $275,000 on a child born today and raised to age eighteen. Add in four years of college expenses and the total is more than $415,000 (assuming you will send your child to an instate public university). More affluent parents, whose combined income is over $72,480 a year, will spend more than $358,000 to raise a child to age eighteen. If they send the child to a state university, the total reaches nearly $500,000.

For a middle-class family, this averages $1,289 a month per child over those eighteen years, excluding the cost of college. For a more affluent family, the cost is $1,658 a month per child.

These costs include prenatal care, delivery, childcare and education, housing, food, transportation, health care, clothing, and other miscellaneous expenses. They do not include the cost of lost wages or income as a result of having a child and I’m not sure the amount assumed for childcare and education is realistic.

Having or not having children is a personal choice that defies a purely economic analysis. However, having embarked on the path of having a child, you would do well to understand the economic implications of the decision.

My clients have a pervasive attitude that their children deserve the very best. They rarely look at the day-to-day cost associated with this attitude—which can be staggering.

Underneath the belief system of having to give their children the very best is a theme mentioned earlier in this blog about parents automatically paying for college: I cannot deny my kids anything—otherwise I’m a bad parent.

Baby boomers believe they need to give their kids everything, and everything needs to be brand spanking new.

When my younger daughter Annie turned two, her best friend owned one of those little plastic cars that the kids can get in and propel around. Whenever Annie went to visit this friend she climbed in the car and wouldn’t get out. She just loved it. So for her birthday, the obvious choice was her own little car. I was about to head out the door to buy a new one, when some friends told us that they had a toy car their child had outgrown and that Annie could have.

But they didn’t drop it off at the house when they said they would and Annie’s birthday was approaching fast. Finally, I said, “Tomorrow, I’m going to buy a new one.” I didn’t really want her to have a crummy used car anyway. A new one would be better. After all, Annie is my daughter—she should have the best.

On the front porch the next morning was the used toy car. We gave it to Annie on her birthday and she loved it. It was perfect. And guess what? It rained every day for two weeks after Annie’s birthday. As I saw the car sitting outside in the rain, I realized that it wouldn’t have taken long for a new one to look just as used as the car we got from our friends.

Because we love our children, we think we have to spend whatever it takes to get them the best. And we don’t question this attitude. We also make the association that “best” means the same as “new.” It’s ridiculous!

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