July 3, 2012
From the Desk of Carol Soelberg:
In response to a recent article in the Wall Street Journal, United Families International used as its poll question: “Do you believe that it costs a middle-income family $234,900 to raise a child through age 17?”
Here’s how our readers responded:
“No Way” 63 Percent
“Yes” 23 Percent
“Maybe” 11 Percent
Because most of us perceive situations from our own perspectives, it isn’t surprising that the management of large families is often misunderstood and controversial. Tom Christensen’s article for this month addresses the question from his personal experience as a father of a large family (15 children). Because I – and MANY others I know – have also raised a large family on much less than the “experts” say is required I must side with Mr. Christensen. My family size (13 children) often draws rolled eyes and dropped jaws either in admiration or disgust which tells me that the joy, fulfillment, and REAL cost of a large family is one of the best-kept secrets out there!
We at United Families International are dedicated to sharing a perspective that promotes the cultural and personal advantages of families. Fighting the cultural war aimed at the destruction of families demands that correct information be shared. We offer special thanks to Tom for sharing his wealth of experience and love for families–especially large ones!
Whatever your family size, spend time today enjoying them. If you’re a U.S. citizen, we wish you a wonderful Fourth of July full of family tradition and fond memories!
Sincerely,
Carol Soelberg, President
United Families International
The Exaggerated Costs of Raising Children
Tom Christensen
For as long as I can remember, major news services report on the frightening cost of raising a child. It would seem that only the wealthy can afford to have children. If such “per child” cost estimates held true for a larger family, we would have gone bankrupt years ago.
For example, the Wall Street Journal projected a few weeks ago (based on data from the U.S. Department of Agriculture) that middle-income parents can expect to spend nearly $300,000 per child during the first 17 years. Annual child-rearing expenses range between $12,290 and $14,320. Monthly expenses per child amount to approximately $1,000 to $1,200 per month.
According to the Wall Street Journal report, the biggest expense is housing at 30%, followed by child-care and education at 18%, food at 16%, transportation at 14% and health care at 8%.
The problem with such projections is that they fail to note that a childless couple may pay the same amount or even more for luxury housing, education (all individuals are taxed equally for public education), food, vehicles, health care, and recreation. They also fail to account for the significant tax advantages, i.e. child tax credit and dependent exemptions, available to larger families.
More significantly, the reports fail to note the economies of scale and fixed costs for a large family that do not increase incrementally per child as the family grows. For example, if the housing cost for one child is $500 per month, the housing cost per child for five children in the same house is $100 per month. Reports also fail to note the cost savings and financial benefits of family members who can garden, shop, mentor children, sew and do laundry, clean house, chauffeur, teach lessons, cut hair, etc.
If we had heeded the advice of economists and even our own parents back then, we would have delayed having children and limited the number of children. Now years later, having raised a number of children successfully on one modest income, we believe the decision to welcome the children has been the best decision we ever made. It has not hurt us financially but has blessed our lives as we have learned the principles of service, thrift, self-reliance, good health, and industry.
Here are our secrets to becoming child rich but not cash poor:
1. Education/employment. We had our first child early when I was a 26 year old second year law student at the University of Arizona. My wife was employed at a public school with maternity benefits. We made just enough income from her job, managing apartments and from my part-time jobs to get by without loans until I could obtain a stable full-time job with an average salary, pension and great benefits.
2. Housing. This is listed in the Wall Street Journal story as the biggest expense. We first rented a house from a relative at low cost for five years, saved our money, paid cash for a lot, and used sweat equity to build our first home. We paid off the original 12% interest mortgage in ten years by refinancing and paying extra principal each month. We needed a larger home and rented out our first home to pay the mortgage on our second home. Last year, we leveraged both homes to move into our current beautiful and affordable 6000 square foot home.
3. Child care and education. The next highest expense listed for families is child care and education. Not in our family. With a full time mother supervising the children, we pay virtually nothing for child care. By volunteering in the school during the first year, my wife was able to enroll our elementary children in the finest publicly funded charter school in the state (with a waiting list of 5000). Our children have excelled and been able to pay for their own college expenses with the help of scholarships and by working summers and during school.
4. Food. We feed our large family ample, delicious, nutritious meals for less. We raise our own beef and poultry and grow and preserve fruits and vegetables at home. We shop sales and buy in bulk. We rarely take the family to restaurants, do not buy expensive and unhealthy alcohol, tobacco products, coffee, etc. and rarely purchase processed foods. We maintain a year supply of food storage for everyday use as well as emergencies. I prepare breakfast every day for the family and my wife dinner. The cost to double or triple the recipe or add a few plates to the family dinner table is not that much. On weekdays, while I make breakfast, my wife prepares economical sack lunches.
5. Transportation. We buy quality used vehicles and attempt to maintain them ourselves. We have bought only one seriously discounted new car since we have been married. We buy fuel at a significant discount using grocery “rewards points” and limit use of our gas guzzlers. I use mass transit. Car insurance is a big expense, but we shop around and obtain multiple driver and other discounts.
6. Health Care. We exercise, eat healthy, and abstain from drugs and harmful substances. My job provides excellent medical and dental benefits. We keep our insurance costs down by opting for high deductible insurance with an HSA and a flex account. The cost of health care does not increase per child.
7. Lessons and Sports. This category is not listed in the Journal, but is for us a significant one. We believe music lessons and participation on various sports teams are worth the cost. They promote teamwork, leadership, discipline, hard work, and character development.
