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College for my kids is projected to be $110K each in today's money ($240K each at the time). A home for a family of four costs $550K+. Plus me AND my wife had t

College for my kids is projected to be $110K each in today's money ($240K each at the time). A home for a family of four costs $550K+. Plus me AND my wife had to pay off OUR college loans for years to even get to $0 of wealth. Each kid's birth was $10K and more for all the appointments before/after that. Food is incredibly expensive, vehicles have gone through the stratosphere, and wage increases haven't kept up with inflation let alone gone up in real terms. We're also told we're meant to save for retirement and my question is: With what leftover money? I'm in the top 20% of income earners, and we're barely getting by. You want to know why people aren't having kids? That's a start of why. But we have a record number of billionaires and millionaires, so I guess that makes up for it...

rayiner 4y ago
I find this reasoning incredibly hard to believe. My moderate income neighborhood with lots of people who don’t have college degrees has tons of kids. By contrast many of the people I know who have very high incomes don’t have kids. I think the truth is that being a dual income no kids professional couple is a pretty fun life and lots of people don’t want to sacrifice that by raising kids.
- rafaelero 4y ago
  I agree. GDP per capita is inversely correlated with fertility rate, so it looks like the richer people are the less likely they are to have children.
- scottLobster 4y ago
  As a single income family, he's more right than wrong. My wife and I have one infant, and want another. I make around 117k/year pre-tax. Rent for a 3 bedroom townhome is 2500/month, that's roughly half my monthly take-home pay. Everything else comes out of the other half. I contribute enough to my 401k to get my employer match, but no more. I'm putting $250/month into my daughter's 529 based on similar calculations for what a decent 4 year degree will cost (a little north of a 100k). I max out our HSA to make the high deductible health plan worth it. We don't eat out that much. I drive a 23 year old hand-me-down Toyota. Things still add up fast if we don't keep track. There's not much left over at the end of the month. And there's going to be another $250+/month when the other kid comes along. We're not living in poverty by any stretch, have no debt, and can afford some minor luxuries. But it's a lot tighter than it was for my dad working essentially the same job at the same age. I'm curious as to the levels of credit card debt in your moderate income neighborhood, and how prepared they're going to be for retirement at their current savings rates. Or perhaps they just don't expect to pay for their kids' college at all, and are just hoping they don't get sick. We've already sacrificed the vacations and expensive restaurants. Should we sacrifice our HSA and kids' college funds as well so we can have 3 instead of 2?
  - xyzzyz 4y ago
    Yes, sacrifice college fund, obviously. Why do you feel this is a requirement? Your kids can get a loan for college in their due time, and 20 years from now, you will be in a much better position to help them financially anyway. Saving your wealth to give it to your kids when they older is good and noble, but not having kids just because you cannot furnish them with enough wealth for when they are adult, is really silly and counterproductive. Similarly, you might reconsider maxing HSA, depending on how much you spend. HSA has two benefits, a direct one which is tax savings, and the indirect one being actually forcing you to save money, which is useful for many people who are bad at planning and looking ahead. The latter doesn’t apply to you, obviously, if anything you’re overthinking it. On the other hand, with your earnings, and assuming two kids, using HSA gives you around 20% discount on actual healthcare spend. Take account as to how much you actually spend on healthcare, and consider whether saving 20% on that is worth not having extra kid.
    - scottLobster 4y ago
      It may have been silly and counterproductive before the cost of tuition went through the roof, and a 4 year degree became a de-facto requirement for almost all well-paying careers. My dad paid his own way through his PhD working part-time at Friendly's (fast food chain) while my mom was a public school teacher. Good luck doing that these days. It is my responsibility as a parent to ensure my children are as equipped to prosper as possible. They should not have to endure decades or potentially a lifetime of un-forgivable debt for what has become an almost fundamental requirement to be middle class. Expecting 18 year olds to get a job and pay their own way is no longer realistic unless you are fine with your kids being shut out of most economic opportunities. I hope it'll be more realistic in 18 years, but I can't count on that. Call me silly if you want, I'm just adapting to the way things are. I'd rather have two kids with full opportunities than four kids with 20% opportunities. As for the HSA, having seen my mom fight cancer for over a decade I'm well aware of how much healthcare can cost. Even with out-of-pocket max limits, it'll be a while before I feel comfortable not maxing it out.
      - xyzzyz 4y ago
- camgunz 4y ago
  I agree, and I think it's pretty bad news. Governments are generally trying to increase incomes, and as this happens you can see birth rates declining. I think there are other things that factor in (basically reproductive rights and literacy--both of which decrease as you descend the income scale), but governments are--mostly--trying to improve those too. I'm not really mollified by liberals arguing that we need more immigration to address this. I'm not anti-immigration by any stretch, but it feels less like a policy to fix low birth rates and more like a bullet point on a list of "good things about immigration". The EU has generally tried to incentivize getting pregnant and having kids with social programs, but if it's having an effect it's pretty slow going, and my guess is that spending will have to increase pretty significantly to get back up to replacement rate. Even so, I think this is the correct policy because I buy what the World Economic Forum wrote about this [0]: urbanization and women having careers puts pressure on having kids. Your choices here are: make it even harder for people to live in cities and for women to work so they give up, or make it easier so they feel less pressure. The US politics here are weird. Liberals are trying to do things like write a right to day care into the Constitution, conservatives are doing the same with the 50s housewife dynamic, no one's sure urbanization is an unqualified good but it seems unstoppable. I think the EU is making progress because they have broad agreement on socialism; the US can't move forward because they have this mostly unresolvable argument about what kind of society the government will invest in. But, and now I'll get on my partisan horse for a second, the kind of social engineering conservatives are engaging in is pretty odd. In a liberal, democratic society your government ought to support your lifestyle unless it's demonstrably damaging, and I don't think things like being a same-sex couple or being a woman in the workplace are demonstrably damaging. I guess someone somewhere might make religious arguments or something, but being gay is super accepted in the US as is working as a woman, so those arguments seem pretty fringe. Consequently, I don't really see any justification for trying to achieve this kind of social engineering through public policy. It feels deeply anti-liberal, and downright homophobic and misogynistic. [0]: https://www.weforum.org/agenda/2021/06/birthrates-declining-globally-why-matters/ https://www.weforum.org/agenda/2021/06/birthrates-declining-...
dragonwriter 4y ago
The problem with this theory is that it doesn’t match up at all with who is having kids. Rich people are far less likely to have kids than poor. It’s kind of hard to square that with “kids are too expensive” being the main driving force. https://www.statista.com/statistics/241530/birth-rate-by-family-income-in-the-us/ https://www.statista.com/statistics/241530/birth-rate-by-fam...
- bradlys 4y ago
  Unplanned pregnancies and willingness to go through with the pregnancy is also much more common at lower incomes. We have a single mothers epidemic. It’s common to have kids from multiple partners at those incomes. There’s nothing stopping them from shoving more kids into a tiny dwelling or moving back in with their parents or cohabitating with other people. People at these lower incomes tend to not be the best judgment makers - otherwise they likely wouldn’t be at as low of an income. They don’t think about the quality of life hit that comes with raising the kid because they’ve never known anything else.
  - toomuchtodo 4y ago
    50% of both US and global pregnancies are unintended. Back out the total fertility rate if those unintended pregnancies don’t occur. To cheat a bit, I’ll share the US is at 1.6. https://www.guttmacher.org/sites/default/files/factsheet/fb-unintended-pregnancy-us.pdf https://www.guttmacher.org/sites/default/files/factsheet/fb-... https://www.unfpa.org/press/nearly-half-all-pregnancies-are-unintended-global-crisis-says-new-unfpa-report https://www.unfpa.org/press/nearly-half-all-pregnancies-are-...
cudgy 4y ago
You can’t have it all. If you are top 20% of income and still have problems saving money, then the issue is most likely your spending patterns. Kids don’t have to be incredibly expensive; it is not necessary to pay for their college, send them to private primary and secondary schools, provide them with expensive activities, buy them a car, give them allowances, take them on vacations, go to frequent movies and concerts, and generally fall victim to doing what all the other parents are doing, especially in high income circles. It takes careful thought and consideration of what kids really need, which is love and attention. Picking the right spouse that understands this as well also matters a great deal!
- Someone1234 4y ago
  > If you are top 20% of income and still have problems saving money, then the issue is most likely your spending patterns. My "spending habits" are homes that cost $550K and upwards. The majority of income does to non-discretionary spending by a lot. I honestly thought I made that point quite clear above.
  - cudgy 4y ago
    You did. I am just not buying it.
tptacek 4y ago
Where does a home for a family of four cost $550k? The median home price in Berwyn, IL is $237k. Berwyn is nice, just outside the city of Chicago, and has CTA train connectivity (it's the village directly south of my own). If the argument is that it's too expensive to have a kid in SFBA or Austin, I'd buy that, but: don't raise kids in SFBA or Austin?
- nkurz 4y ago
  Homes in Illinois cost considerably less than the median for the US. I don't know quite how the "family of four" modifier affects things, but the Federal Reserve Banks says the US median home price is $429k, while Illinois is at $270k. A whole bunch of states have medians above $550k. While it can be argued that more people should move to Illinois, or to other states with reasonably priced housing, I'd the OP is quite possibly right for wherever they are. Glancing down the list, here are a few standouts: Hawaii: $1.05M DC: $826k California: $816k Washington: $640k Massachusetts: $612k Colorado: $604k Utah: $589k https://www.fool.com/the-ascent/research/average-house-price-state/ https://www.fool.com/the-ascent/research/average-house-price...
  - tptacek 4y ago
    I don't trust those numbers. You can just go look up counterexamples. Colorado, for instance: the median home price in Aurora (a huge suburb of Denver, Colorado's largest metro) is $475k. 2 of the top 10 metros (the leaderboard is obviously NYC, LA, Chicago --- Chicago, again, where home prices are what they said they were upthread) are in Texas, where home prices are actually lower than the Illinois prices I cited. Atlanta's are under 400k.
RestlessMind 4y ago
In spite of all the excuses you provided, US birth rate is 1.64/woman. IIUC, Norway, Finland and Germany have free colleges, universal healthcare and excellent welfare and yet their birth rates are 1.48, 1.37 and 1.53. India and Bangladesh have pretty terrible social welfare and yet their birth rates are ~2.0. Clearly there is something else at work here.

rayiner 4y ago

I find this reasoning incredibly hard to believe. My moderate income neighborhood with lots of people who don’t have college degrees has tons of kids. By contrast many of the people I know who have very high incomes don’t have kids. I think the truth is that being a dual income no kids professional couple is a pretty fun life and lots of people don’t want to sacrifice that by raising kids.

rafaelero 4y ago
I agree. GDP per capita is inversely correlated with fertility rate, so it looks like the richer people are the less likely they are to have children.
scottLobster 4y ago
As a single income family, he's more right than wrong. My wife and I have one infant, and want another. I make around 117k/year pre-tax. Rent for a 3 bedroom townhome is 2500/month, that's roughly half my monthly take-home pay. Everything else comes out of the other half. I contribute enough to my 401k to get my employer match, but no more. I'm putting $250/month into my daughter's 529 based on similar calculations for what a decent 4 year degree will cost (a little north of a 100k). I max out our HSA to make the high deductible health plan worth it. We don't eat out that much. I drive a 23 year old hand-me-down Toyota. Things still add up fast if we don't keep track. There's not much left over at the end of the month. And there's going to be another $250+/month when the other kid comes along. We're not living in poverty by any stretch, have no debt, and can afford some minor luxuries. But it's a lot tighter than it was for my dad working essentially the same job at the same age. I'm curious as to the levels of credit card debt in your moderate income neighborhood, and how prepared they're going to be for retirement at their current savings rates. Or perhaps they just don't expect to pay for their kids' college at all, and are just hoping they don't get sick. We've already sacrificed the vacations and expensive restaurants. Should we sacrifice our HSA and kids' college funds as well so we can have 3 instead of 2?
- xyzzyz 4y ago
  Yes, sacrifice college fund, obviously. Why do you feel this is a requirement? Your kids can get a loan for college in their due time, and 20 years from now, you will be in a much better position to help them financially anyway. Saving your wealth to give it to your kids when they older is good and noble, but not having kids just because you cannot furnish them with enough wealth for when they are adult, is really silly and counterproductive. Similarly, you might reconsider maxing HSA, depending on how much you spend. HSA has two benefits, a direct one which is tax savings, and the indirect one being actually forcing you to save money, which is useful for many people who are bad at planning and looking ahead. The latter doesn’t apply to you, obviously, if anything you’re overthinking it. On the other hand, with your earnings, and assuming two kids, using HSA gives you around 20% discount on actual healthcare spend. Take account as to how much you actually spend on healthcare, and consider whether saving 20% on that is worth not having extra kid.
  - scottLobster 4y ago
    It may have been silly and counterproductive before the cost of tuition went through the roof, and a 4 year degree became a de-facto requirement for almost all well-paying careers. My dad paid his own way through his PhD working part-time at Friendly's (fast food chain) while my mom was a public school teacher. Good luck doing that these days. It is my responsibility as a parent to ensure my children are as equipped to prosper as possible. They should not have to endure decades or potentially a lifetime of un-forgivable debt for what has become an almost fundamental requirement to be middle class. Expecting 18 year olds to get a job and pay their own way is no longer realistic unless you are fine with your kids being shut out of most economic opportunities. I hope it'll be more realistic in 18 years, but I can't count on that. Call me silly if you want, I'm just adapting to the way things are. I'd rather have two kids with full opportunities than four kids with 20% opportunities. As for the HSA, having seen my mom fight cancer for over a decade I'm well aware of how much healthcare can cost. Even with out-of-pocket max limits, it'll be a while before I feel comfortable not maxing it out.
    - xyzzyz 4y ago
camgunz 4y ago
I agree, and I think it's pretty bad news. Governments are generally trying to increase incomes, and as this happens you can see birth rates declining. I think there are other things that factor in (basically reproductive rights and literacy--both of which decrease as you descend the income scale), but governments are--mostly--trying to improve those too. I'm not really mollified by liberals arguing that we need more immigration to address this. I'm not anti-immigration by any stretch, but it feels less like a policy to fix low birth rates and more like a bullet point on a list of "good things about immigration". The EU has generally tried to incentivize getting pregnant and having kids with social programs, but if it's having an effect it's pretty slow going, and my guess is that spending will have to increase pretty significantly to get back up to replacement rate. Even so, I think this is the correct policy because I buy what the World Economic Forum wrote about this [0]: urbanization and women having careers puts pressure on having kids. Your choices here are: make it even harder for people to live in cities and for women to work so they give up, or make it easier so they feel less pressure. The US politics here are weird. Liberals are trying to do things like write a right to day care into the Constitution, conservatives are doing the same with the 50s housewife dynamic, no one's sure urbanization is an unqualified good but it seems unstoppable. I think the EU is making progress because they have broad agreement on socialism; the US can't move forward because they have this mostly unresolvable argument about what kind of society the government will invest in. But, and now I'll get on my partisan horse for a second, the kind of social engineering conservatives are engaging in is pretty odd. In a liberal, democratic society your government ought to support your lifestyle unless it's demonstrably damaging, and I don't think things like being a same-sex couple or being a woman in the workplace are demonstrably damaging. I guess someone somewhere might make religious arguments or something, but being gay is super accepted in the US as is working as a woman, so those arguments seem pretty fringe. Consequently, I don't really see any justification for trying to achieve this kind of social engineering through public policy. It feels deeply anti-liberal, and downright homophobic and misogynistic. [0]: https://www.weforum.org/agenda/2021/06/birthrates-declining-globally-why-matters/ https://www.weforum.org/agenda/2021/06/birthrates-declining-...

dragonwriter 4y ago

The problem with this theory is that it doesn’t match up at all with who is having kids. Rich people are far less likely to have kids than poor. It’s kind of hard to square that with “kids are too expensive” being the main driving force. https://www.statista.com/statistics/241530/birth-rate-by-family-income-in-the-us/ https://www.statista.com/statistics/241530/birth-rate-by-fam...

bradlys 4y ago
Unplanned pregnancies and willingness to go through with the pregnancy is also much more common at lower incomes. We have a single mothers epidemic. It’s common to have kids from multiple partners at those incomes. There’s nothing stopping them from shoving more kids into a tiny dwelling or moving back in with their parents or cohabitating with other people. People at these lower incomes tend to not be the best judgment makers - otherwise they likely wouldn’t be at as low of an income. They don’t think about the quality of life hit that comes with raising the kid because they’ve never known anything else.
- toomuchtodo 4y ago
  50% of both US and global pregnancies are unintended. Back out the total fertility rate if those unintended pregnancies don’t occur. To cheat a bit, I’ll share the US is at 1.6. https://www.guttmacher.org/sites/default/files/factsheet/fb-unintended-pregnancy-us.pdf https://www.guttmacher.org/sites/default/files/factsheet/fb-... https://www.unfpa.org/press/nearly-half-all-pregnancies-are-unintended-global-crisis-says-new-unfpa-report https://www.unfpa.org/press/nearly-half-all-pregnancies-are-...

cudgy 4y ago

You can’t have it all. If you are top 20% of income and still have problems saving money, then the issue is most likely your spending patterns. Kids don’t have to be incredibly expensive; it is not necessary to pay for their college, send them to private primary and secondary schools, provide them with expensive activities, buy them a car, give them allowances, take them on vacations, go to frequent movies and concerts, and generally fall victim to doing what all the other parents are doing, especially in high income circles. It takes careful thought and consideration of what kids really need, which is love and attention. Picking the right spouse that understands this as well also matters a great deal!

Someone1234 4y ago
> If you are top 20% of income and still have problems saving money, then the issue is most likely your spending patterns. My "spending habits" are homes that cost $550K and upwards. The majority of income does to non-discretionary spending by a lot. I honestly thought I made that point quite clear above.
- cudgy 4y ago
  You did. I am just not buying it.

tptacek 4y ago

Where does a home for a family of four cost $550k? The median home price in Berwyn, IL is $237k. Berwyn is nice, just outside the city of Chicago, and has CTA train connectivity (it's the village directly south of my own). If the argument is that it's too expensive to have a kid in SFBA or Austin, I'd buy that, but: don't raise kids in SFBA or Austin?

nkurz 4y ago
Homes in Illinois cost considerably less than the median for the US. I don't know quite how the "family of four" modifier affects things, but the Federal Reserve Banks says the US median home price is $429k, while Illinois is at $270k. A whole bunch of states have medians above $550k. While it can be argued that more people should move to Illinois, or to other states with reasonably priced housing, I'd the OP is quite possibly right for wherever they are. Glancing down the list, here are a few standouts: Hawaii: $1.05M DC: $826k California: $816k Washington: $640k Massachusetts: $612k Colorado: $604k Utah: $589k https://www.fool.com/the-ascent/research/average-house-price-state/ https://www.fool.com/the-ascent/research/average-house-price...
- tptacek 4y ago
  I don't trust those numbers. You can just go look up counterexamples. Colorado, for instance: the median home price in Aurora (a huge suburb of Denver, Colorado's largest metro) is $475k. 2 of the top 10 metros (the leaderboard is obviously NYC, LA, Chicago --- Chicago, again, where home prices are what they said they were upthread) are in Texas, where home prices are actually lower than the Illinois prices I cited. Atlanta's are under 400k.

RestlessMind 4y ago

In spite of all the excuses you provided, US birth rate is 1.64/woman. IIUC, Norway, Finland and Germany have free colleges, universal healthcare and excellent welfare and yet their birth rates are 1.48, 1.37 and 1.53. India and Bangladesh have pretty terrible social welfare and yet their birth rates are ~2.0. Clearly there is something else at work here.