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As a parent I've found that "kids are pricey" can easily stem from financial illiteracy as well. It's easier than people think to have kids and not blow the bud

by Clanan 11y ago

As a parent I've found that "kids are pricey" can easily stem from financial illiteracy as well. It's easier than people think to have kids and not blow the budget. Don't go crazy on Christmas gifts, limit eating out, buy secondhand clothes (which are usually in great condition), etc. We always chuckle when our friends talk about how expensive their kids are, right before mentioning their three cross-country trips. Financial literacy can apply to child-rearing too!

draz 11y ago
Agreed on all the of above. However, when the going rate for daycare in NYC is $3K/month per child, you need to make an extra $50K/year (pre-tax) to just cover that (if you were to maintain your pre-kids lifestyle). Then there are other expenses. Point it, kids aren't free. That's where you need to start making choices (less eating out, etc.)
__abc 11y ago
THIS! I have two kids, and it's fairly easy (at least before starting school / sports) 1 - Second hands clothes, toys, etc are super cheap 1.1 - Hand me down across the extended family and your family (seriously, they grow out of it in minutes, try not to buy it new) 2 - Your kids don't need a lot of toys and crayons and paper are cheap 3 - GO TO THE LIBRARY 4 - Parks are really fun, and really cheap, as in free Where it adds up, at least for me, is I now have a 2 & 4 year old in school and that's $1K a month (drops to zero once they hit public schools), but for a few years that's hefty. However, that's also a choice 1 - I chose private school for preschool, so that's costlier 2 - I moved to a specific area for the 10/10 public schools to save money
- ashark 11y ago
  Most places, the areas with the "10/10" public schools cost more to live in, between property taxes and higher purchase prices for houses (because the schools are good, so demand is high). They may also be farther from where the jobs are (more often than not, I'd guess), unless you want to pay even more for both prime location and good schools, assuming such a thing even exists where you live. Higher transportation costs, more time commuting. You pay either way. Picking the nicer location is probably cheaper, but I wouldn't bet on that always being the case. It's difficult to quantify the costs of location to compare the two.
  - __abc 11y ago
    I am probably an outlier here, but I stalked my neighborhood and pounced on a house that was WAY on the low end for the area thus in my budget and literally has lowest prop taxes. My ONLY point being, my family wanted a house sooner, but we waited, and waited, and waited it out to find one that met our financial needs in the area we wanted. IF you do that (knowing it the stars may not line up) it's incredibly helpful.
ashark 11y ago
Yeah, all that stuff isn't a big deal, but health care and (especially) child care are a huge expense. For child care, either a parent stays home (cost = what that parent would be making, including retirement and benefits) or you pay (around here) ~$600-$1200/month per kid for day care, depending on the quality/reputation of the place. Tax credits help a bit, but not much.
geebee 11y ago
I'm not going to disagree, since your advice is good. If you're having trouble financially, don't go crazy on Christmas gifts, eat out all the time, or buy expensive clothes. But keep in mind, in SF, a 3br house or apartment south of 280 (a bit blighted in spots, but far safer than its reputation) starts at 800K, and really, unless you're at the outskirts and buying a property in need of considerable work, you're probably going to shell out over a mil. Child care is easily over $2k a month, so 50K a year. So at least in SF, you're probably looking at about 90k+ on housing and child care. Health care is another huge cost, but it's hidden. What percentage of that is really spent on creature comforts like expensive travel or christmas gifts? New clothes? You're a parent, you've seen what things cost at lower cost spots like Old Navy or payless shoes. It's not a big expense. I do a lot of hand-me-downs (I have 2 kids myself), but in the end, I'd estimate very generously that clothing costs about 0.5% of the yearly budget. Now, one could certainly reasonably say that living in SF is a financially illiterate thing to do (though if this is the case, then many of the employers claiming a shortage of software developers are actually claiming that there is a shortage of financially illiterate developers, since these companies are generally located in SF or Silicon Valley). But is Boston, New York, Washington DC, Seattle, or LA really that much better? I think it just goes from impossible to difficult. The reason I mention this is that I believe the middle and working classes in the US are eroding, and while some of this can be self-indulgence (look at the way some people treated houses as piggy banks, for example), I wouldn't write off middle class struggles as financial illiteracy or excessive self-indulgence.
- Bahamut 11y ago
  In Northern Virginia, you can get a pretty nice house in Fairfax for $500k - the SF and Silicon Valley market is special for its terribleness (NY too).
  - Yhippa 11y ago
    I thought you were BS-ing me but you are absolutely right (especially if you go up to $600k): http://www.zillow.com/homes/for_sale/Fairfax-VA/house,mobile,land_type/4655_rid/500000-600000_price/1855-2225_mp/days_sort/39.040653,-77.093983,38.715117,-77.40984_rect/11_zm/0_mmm/ http://www.zillow.com/homes/for_sale/Fairfax-VA/house,mobile.... For some reason I thought houses up there had gotten crazy expensive. Not too far from Reston and Tyson's and some of the best schools in the country. Can't beat that.
Dirlewanger 11y ago
"right before mentioning their three cross-country trips." You do realize that those are luxuries you are not taking because they're going to other priorities i.e. your family? It has nothing to do with not having kids and being financially irresponsible. Kids are very expensive and have incredible amount of all kinds of risk attached to them.
dionidium 11y ago
People in this thread keep using the word literacy to criticize mildly questionable spending. Financially literate people overspend on vacations, too! Let's not start applying the illiterate label to everyone who has ever spent more than they should on something.
wch 11y ago
There are people who waste money on toys, eating out, clothes and all that -- but those expenses pale in comparison to the really big costs: - Child care (necessary if both parents work or there's just one parent) - Larger apartment/house, in an area with good schools My wife and I live in a large midwestern city. Prior to having kids, we had more than enough space in a 2-bedroom apartment. We had in the past (as students) lived comfortably on less than $20k each a year. Putting an infant in a day care costs between $1200 and $1600 here. It drops a few hundred when the baby moves into the toddler room, and a few hundred more when the toddler moves into the older kids' room. With two kids in day care (an infant and an older kid), that still costs in the ballpark of $2000-2500 per month. The 2-bedroom apartment is too small for 2 adults plus 2 children, plus visiting family members who help with kids, and moving to a bigger place in an area with good schools also increases monthly costs substantially. Even if you're not spending money frivolously, having kids is expensive compared to not having them.

by Clanan 11y ago

draz 11y ago

Agreed on all the of above. However, when the going rate for daycare in NYC is $3K/month per child, you need to make an extra $50K/year (pre-tax) to just cover that (if you were to maintain your pre-kids lifestyle). Then there are other expenses. Point it, kids aren't free. That's where you need to start making choices (less eating out, etc.)

__abc 11y ago

THIS! I have two kids, and it's fairly easy (at least before starting school / sports) 1 - Second hands clothes, toys, etc are super cheap 1.1 - Hand me down across the extended family and your family (seriously, they grow out of it in minutes, try not to buy it new) 2 - Your kids don't need a lot of toys and crayons and paper are cheap 3 - GO TO THE LIBRARY 4 - Parks are really fun, and really cheap, as in free Where it adds up, at least for me, is I now have a 2 & 4 year old in school and that's $1K a month (drops to zero once they hit public schools), but for a few years that's hefty. However, that's also a choice 1 - I chose private school for preschool, so that's costlier 2 - I moved to a specific area for the 10/10 public schools to save money

ashark 11y ago
Most places, the areas with the "10/10" public schools cost more to live in, between property taxes and higher purchase prices for houses (because the schools are good, so demand is high). They may also be farther from where the jobs are (more often than not, I'd guess), unless you want to pay even more for both prime location and good schools, assuming such a thing even exists where you live. Higher transportation costs, more time commuting. You pay either way. Picking the nicer location is probably cheaper, but I wouldn't bet on that always being the case. It's difficult to quantify the costs of location to compare the two.
- __abc 11y ago
  I am probably an outlier here, but I stalked my neighborhood and pounced on a house that was WAY on the low end for the area thus in my budget and literally has lowest prop taxes. My ONLY point being, my family wanted a house sooner, but we waited, and waited, and waited it out to find one that met our financial needs in the area we wanted. IF you do that (knowing it the stars may not line up) it's incredibly helpful.

ashark 11y ago

Yeah, all that stuff isn't a big deal, but health care and (especially) child care are a huge expense. For child care, either a parent stays home (cost = what that parent would be making, including retirement and benefits) or you pay (around here) ~$600-$1200/month per kid for day care, depending on the quality/reputation of the place. Tax credits help a bit, but not much.

geebee 11y ago

I'm not going to disagree, since your advice is good. If you're having trouble financially, don't go crazy on Christmas gifts, eat out all the time, or buy expensive clothes. But keep in mind, in SF, a 3br house or apartment south of 280 (a bit blighted in spots, but far safer than its reputation) starts at 800K, and really, unless you're at the outskirts and buying a property in need of considerable work, you're probably going to shell out over a mil. Child care is easily over $2k a month, so 50K a year. So at least in SF, you're probably looking at about 90k+ on housing and child care. Health care is another huge cost, but it's hidden. What percentage of that is really spent on creature comforts like expensive travel or christmas gifts? New clothes? You're a parent, you've seen what things cost at lower cost spots like Old Navy or payless shoes. It's not a big expense. I do a lot of hand-me-downs (I have 2 kids myself), but in the end, I'd estimate very generously that clothing costs about 0.5% of the yearly budget. Now, one could certainly reasonably say that living in SF is a financially illiterate thing to do (though if this is the case, then many of the employers claiming a shortage of software developers are actually claiming that there is a shortage of financially illiterate developers, since these companies are generally located in SF or Silicon Valley). But is Boston, New York, Washington DC, Seattle, or LA really that much better? I think it just goes from impossible to difficult. The reason I mention this is that I believe the middle and working classes in the US are eroding, and while some of this can be self-indulgence (look at the way some people treated houses as piggy banks, for example), I wouldn't write off middle class struggles as financial illiteracy or excessive self-indulgence.

Bahamut 11y ago
In Northern Virginia, you can get a pretty nice house in Fairfax for $500k - the SF and Silicon Valley market is special for its terribleness (NY too).
- Yhippa 11y ago
  I thought you were BS-ing me but you are absolutely right (especially if you go up to $600k): http://www.zillow.com/homes/for_sale/Fairfax-VA/house,mobile,land_type/4655_rid/500000-600000_price/1855-2225_mp/days_sort/39.040653,-77.093983,38.715117,-77.40984_rect/11_zm/0_mmm/ http://www.zillow.com/homes/for_sale/Fairfax-VA/house,mobile.... For some reason I thought houses up there had gotten crazy expensive. Not too far from Reston and Tyson's and some of the best schools in the country. Can't beat that.

Dirlewanger 11y ago

"right before mentioning their three cross-country trips." You do realize that those are luxuries you are not taking because they're going to other priorities i.e. your family? It has nothing to do with not having kids and being financially irresponsible. Kids are very expensive and have incredible amount of all kinds of risk attached to them.

dionidium 11y ago

People in this thread keep using the word literacy to criticize mildly questionable spending. Financially literate people overspend on vacations, too! Let's not start applying the illiterate label to everyone who has ever spent more than they should on something.

wch 11y ago

There are people who waste money on toys, eating out, clothes and all that -- but those expenses pale in comparison to the really big costs: - Child care (necessary if both parents work or there's just one parent) - Larger apartment/house, in an area with good schools My wife and I live in a large midwestern city. Prior to having kids, we had more than enough space in a 2-bedroom apartment. We had in the past (as students) lived comfortably on less than $20k each a year. Putting an infant in a day care costs between $1200 and $1600 here. It drops a few hundred when the baby moves into the toddler room, and a few hundred more when the toddler moves into the older kids' room. With two kids in day care (an infant and an older kid), that still costs in the ballpark of $2000-2500 per month. The 2-bedroom apartment is too small for 2 adults plus 2 children, plus visiting family members who help with kids, and moving to a bigger place in an area with good schools also increases monthly costs substantially. Even if you're not spending money frivolously, having kids is expensive compared to not having them.