There are lots of things that worry me about becoming a parent. Will I be a good mom? How will I juggle work and family? How will my relationships change? My husband has his own set of worries, and among his many concerns is the cost of raising a kid. Diapers are expensive, he likes to remind me. Most of the time, I just brush him off: People who make a whole lot less than we do make it work. But if I really start to crunch the numbers, I get nervous, too.
Today, the Wall Street Journal reported that it costs the average American family nearly $250,000 to raise a child from birth to 18. That’s a quarter million dollars — or as the Journal explains, the average family’s total income for five years. It makes for a clicky headline for sure, but when I took a closer look at the cost breakdown, I realized that’s probably a low estimate, especially if you live in New York City. If you break down $250,000 over 18 years, it’s an annual cost of around $13,000, but in NYC, day care can cost an average of $16,000 a year, according to a New York Post story published last fall. We’re not even talking about diapers and food and health care or all those cute onesies and leather moccasins and $600 strollers (you know, the essentials). And all the help the federal government offers is a $1,000 tax credit per child, if you make less than $110,000 combined income. Ouch.
Child care is expensive nationwide, costing families more than housing expenses in many big cities. Hillary Clinton’s presidential platform includes the promise that she’ll make sure families aren’t spending more than 10% of their income on child care (Donald Trump hasn’t discussed the issue). That sounds like a decent plan, but when you take into account the other expenses facing most U.S. households, it seems that 10% is still too high.
As millennials begin to start our own families, many of us have to factor in high student loan payments along with the cost of child care. It’s not unusual for us to shell out more than 10% of our income just to make those monthly payments. Then there are all the growing housing costs (Who actually spends just 30% of their income on rent or mortgage? Not I.) and stagnant wages. Not to mention the skyrocketing costs of health care. When the cost of living gets more and more expensive, it makes it more difficult to actually afford even the basics, let alone save for the future. No wonder 47% of Americans don’t have access to $400 for emergencies.
How much should you save before you start having babies? That’s a really personal question, and I’m sure everyone has a different answer. I asked Refinery29 financial expert Priya Malani for a ballpark figure, and she came back with all sorts of different questions she would ask her clients: Are they planning on taking unpaid time off after the baby is born? Do they want to send their kids to private schools? Are they planning on having more than one kid? At the very least she recommends having an additional $5,000 set aside to cover unexpected costs (and this should be different from your emergency fund) and to help you get used to your new expenses. I can’t help but wonder if it should be more? I’m looking at spending more than $1,000 a month on part-time day care, plus higher housing costs (around an additional $400 monthly) because we decided to move into a bigger apartment. Already, our monthly outlay will be significantly more once the baby arrives. And no, I’m not including the diaper budget.
My husband and I will figure out a way to make the money work (I hope), though I’m sure it will require some tough conversations and compromise. In the end, we will pay a lot for day care, because finding a high-quality option is really important to us. And it’s also crucial that we both keep working full-time. Refinery29 recently wrote about the Center For American Progress’ calculator that shows the hidden cost of our country’s failing child-care system. It predicts how much money men and women would lose if they took time off to raise children. The numbers are even more frightening than the $250,000 the Wall Street Journal is throwing around. If I were to take off five years from my career to raise a baby, I’d lose close to $900,000 over a lifetime. My husband would lose $700,000. So being a stay-at-home parent isn’t really an option. In reality, we need both incomes to afford to live in NYC. Plus, I love my career, and I’m not ready to put that on pause, even if a big chunk of my paycheck will go to child care. Seeing how much I’d be losing if I did take that pause really reinforced for me why it’s so important to figure out a way to make it work.
I wish there were a solution to this problem — a way to provide the quality and affordable day care parents and kids deserve. We read about the state-provided benefits in France and Sweden, and it’s hard not to be jealous. And while I’m intrigued by Clinton’s promise of more affordable options, I’m not sure I believe they will happen — at least not while I’m raising my baby. There are so many factors, both political and financial, that make me doubt the plausibility of a future in which the U.S. offers quality state-run day-care programs. But, to put it simply, most days it doesn’t seem like people in this country — politicians and regular citizens alike — care about the financial challenges that so many families face. It’s every man for himself.
My husband might be right to worry. It’s hard out there for a baby, and even harder for the parents trying to make ends meet.