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Feeling jobless this morning. Here is a scatter plot of the data on this thread...Ommitted some data points.
Great chart, thanks for sharing!!
I'm very embarrassed of my net worth vs my income over the past 3-4 yrs. I'm young enough to recover and it's a short enough amount of time. If my 27 year old self could talk to my 19 year old self I could have 2-3x the net worth I have now. That being said, I had some great experiences over those years that I'll never be able to put a dollar amount on.
A lot of people on here are all "kids destroy your net worth!" and I have to wonder if they really do or if it's because they choose to spends gobs of money on their kids?
I don't have kids so am not speaking from experience...but seriously, what are your kids doing, eating gold-plated corn flakes?
Let's say you already have a 3/2 house, so the space for up to 2 kids is a sunk cost. Kid-furniture and other infrastructure needs they have... maybe 2-3000 every few years as they grow, so... 150 a month at worst and possibly much less? You already pay property taxes on the house which covers their schooling up to grade 12, another sunk cost. If you have a half-way decent job their health care will subtract maybe a few hundred a month to add your new dependents on employer-based health care? How much food do kids eat? Last I checked babies were small. I get it that diapers, etc... cost money but not that much. Is it toys? I bought one of my nephews a train set one Christmas for about $80 and it was a huge mistake - what he really liked playing with was the box it came in. I could have bought him a $3 large size moving box from Lowes and he would have been just as happy.
The main issue I see with kids is opportunity cost from either one partner having to take off from work for child-care or paying someone for day-care... which can also be found more affordably if, for example in my area, you are okay with your kid being with other kids and maybe a couple of the child care workers who only speak Spanish.
I have some friends that complain about how much their kid costs them but they also refuse to send their child to anything less than the town's most prestigious pre-school and have plans to send her to a very expensive private school after that, so I have to wonder how much of it is the actual kid and how much is them. I find it especially ironic since the mother I'm referencing here got expensive private school education herself, I got public school, and yet we have similar job titles with similar pay so at least in the parents experience it wasn't that much of an advantage.
1. You are assuming that the housing cost is a given, and that is a HUGE assumption. For me on the other hand, having a child, required me to buy a bigger house. And in the bay area that was more expensive . You do need larger space for a family, especially a child's things take up space. The toys themselves are not too expensive. But the desire to house a child can be.
2. Clothes, they can be expensive and don't last too long.
3. Time, as you pointed out. or Child care. In my case, my wife is a SAHM, but he still goes to pre-school part time. We pay ~400/ month. Thats expensive. For those who go full time it can be easily 1000-2000/ month.
4. Love, you do want the best for your kids and likely to pay a premium for every thing. thats why you have kids.
5. Recreation - you pay for other kids to play with your kids after school. Or you pay for them to learn things that you believe will enrich their lives.
6. Food. If kid has any food allergies, formulae costs can be painful. As they get older they add a linear cost to your food.
7. Travel, can't quite love them in the house. Tickets are now 1+. Entry to museum 1+
8. Want to go out on a date . Money up more change .
You are essentially supporting another person, albeit a little person. So there are costs.
Some of what I said is bay area spiel. ie. if cost of housing is not that high for great schools, costs can reduce.
An infant is maybe 200-300 USD/month extra
A toddler with daycare is 1000+/month
A school going kid to public school can become cheaper again. However private schools can be 15-25k/yr.
Without a kid you have more time and more money and an evolutionary dead end
and finally you mentioned, you and another person, ended up at the same point in life. despite a difference in education. good for you, but to me its crystal clear that children of wealthier parents have FAR greater chance of success.
A lot of people on here are all "kids destroy your net worth!" and I have to wonder if they really do or if it's because they choose to spends gobs of money on their kids?
I don't have kids so am not speaking from experience...but seriously, what are your kids doing, eating gold-plated corn flakes?
Let's say you already have a 3/2 house, so the space for up to 2 kids is a sunk cost. Kid-furniture and other infrastructure needs they have... maybe 2-3000 every few years as they grow, so... 150 a month at worst and possibly much less? You already pay property taxes on the house which covers their schooling up to grade 12, another sunk cost. If you have a half-way decent job their health care will subtract maybe a few hundred a month to add your new dependents on employer-based health care? How much food do kids eat? Last I checked babies were small. I get it that diapers, etc... cost money but not that much. Is it toys? I bought one of my nephews a train set one Christmas for about $80 and it was a huge mistake - what he really liked playing with was the box it came in. I could have bought him a $3 large size moving box from Lowes and he would have been just as happy.
The main issue I see with kids is opportunity cost from either one partner having to take off from work for child-care or paying someone for day-care... which can also be found more affordably if, for example in my area, you are okay with your kid being with other kids and maybe a couple of the child care workers who only speak Spanish.
I have some friends that complain about how much their kid costs them but they also refuse to send their child to anything less than the town's most prestigious pre-school and have plans to send her to a very expensive private school after that, so I have to wonder how much of it is the actual kid and how much is them. I find it especially ironic since the mother I'm referencing here got expensive private school education herself, I got public school, and yet we have similar job titles with similar pay so at least in the parents experience it wasn't that much of an advantage.
There was an extensive thread about this...I think earlier this year. I think started by one of the "Devils Advocate" type of posters...(maybe "Eddie Haskell"??) Regardless, it was very interesting to hear people's experiences on spending/saving with kids.
Kids can be raised on the cheap. Absolutely. But it's similar to how life can be lived on the cheap, but few people really desire to live a bare bones existence. And most parents want better for their children than they had (or have) themselves. And I would argue "expensive" doesn't mean someone can't afford it, or doesn't want to spend the money. I mean: someone can pay cash for a brand new Ferrari like its a pair of jeans, and it doesn't mean the car isn't "expensive" or that the money could have been spent for wisely from a "building net worth" perspective.
Housing: Your theory is accurate if you happened to buy a 3/2 in a great school district and you have a great commute. And not many overnight guests. And no surprise 3rd babies (happens all the time!) And aside from the number of bedrooms, the common areas comfortably accommodate your family. Schools and commute, though, are big game-changers for many parents.
Childcare: Quality childcare is so important (as any parent knows) It can be gut-wrenching to hand your child over to anyone (even Grandma!) but my heart breaks for the families that have to send their kids to those pitiful childcare centers that look run down and the signs have misspelled words, and the outside is decorated in poorly done versions of cartoon characters. Around me, bargain basement nannies are about $500 a week. I personally can't fathom using a bargain nanny that I can barely communicate with... Clean, reputable childcare centers are $1700-2500 a month. Now add in: many new parents find they don't want to send their baby to someone else for 8-12 hours a day, and decide one parent should stay home.
A huge issue is the "unknown" factor: Will the kids have special needs? Develop medical problems? Have learning disabilities and needing tutoring or private school? Glasses? Medication? I'm amazed at how much we spend at the beginning of each school year! Every year, yet every year surprises me!!
Then, finally, throw in the very complicated emotions involved in raising brand new human beings--knowing you are shaping their adult selves with every choice you make...
So, yes, most of the money spent is by choice, but most people choose to do the best they are able to do for their kids.
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