By Craig Erwin, Ph.D.
My friend’s daughter just had twins. Although they say two can live as cheaply as one, children are terribly expensive no matter how and when you have them. Daycare and college costs are likely to be brutal whether you have one child or ten.
A century ago families might have up to a dozen children, but today raising a dozen children costs a fortune. Sharply rising child-rearing costs have likely contributed to a sharp decline in both birthrates and family size in the past century. A 2017 U.S. Department of Agriculture study concluded that a middle-income couple with two children spends $233,610 to raise just one of their children from birth to the age of 17. Obviously, that doesn’t even include the cost of college. Clearly children don’t come cheap, even if you only have one or two.
One of the biggest ways children affect their families is the impact they have on retirement planning. If you have children later in life, it is very unlikely that you will retire early and much more likely that you will retire later than your friends. Putting one or more children through college may really throw a wrench into your retirement plans. If your friends are beginning to retire, but you are still borrowing money to pay for college, it’s not likely you’ll retire anytime soon.
If it’s likely that you’ll have children, plan early and often. Nothing is likely to be as expensive as children and nothing is likely to have a bigger impact on your life and retirement.
#children #savingmoney #retirement #tuition
Are you planning to have children or do you already have some? If so, how have they affected your life and your finances?
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