Thursday, October 7, 2010

The Kids are Alright

As somebody who happens to have kids, I can tell you first hand that kids don't come cheap.  Kids require lots of "stuff".  Diapers, cribs, swimming lessons, and 529 college funds are just some of the things that consume your money when you have little ones.  So when I read this article in US News and World Report entitled To Retire Early, Don't Have Kids, my initial reaction was to agree with the article.  According to the article, it will cost you a million dollars to raise the U.S. average 2.3 kids.  That's money that could be put aside and used for a comfortable retirement.

However, I started to think about the premise and started wondering if there wasn't a paradox lurking in here.  In today's modern American society, it is normal for most families to have about two children.  It is rare when a family has more than four.  However, if you rewind 100 years, you will remember that families back then were often much, much larger.  It was common for a couple to have five, six, seven children or more.  All of my grandparents had large numbers of brothers and sisters, and my parents grew up with an army of first cousins.  The paradox is that all of my grandparents grew up in families that did not have a lot of money.  Most of their parents were immigrants from other lands, and they came here with literally nothing.  Despite this, they still had more kids than parents today who have an infinitely higher standard of living.  How is this possible?  Is it true that kids are inherently a drag on the family finances, or can they be an asset rather than a liability?

The first thing is that when you have nothing you don't miss what you don't have.  If you have to share a bed with your brothers and sisters, if all of your clothes are hand-me-downs, if eating out is a rare treat, if soccer practice consists of playing in the street with your friends, you don't expect or need a lot of things that cost money.  Raising kids in this environment is just cheaper.

The second thing is that kids were expected to "work" at a certain age.  This could mean that you help clean the house (no need for a maid), or you help take care of your younger siblinds (no need for child care), or you actually get a job to help support the household.  You can see glimpses of this if you watch the show 19 Kids and Counting (or is it 20 - I lost count).  Yes, that family doesn't appear to be destitute by any stretch, but what you will notice is that the older kids help quite a bit taking care of the younger kids, helping out with the cooking, cleaning, chores, etc.  The kids add lots of manpower/womanpower to the household to keep it going.

The last thing is that retirement wasn't something that was considered as an option.  Back then, people worked until they couldn't.  When they couldn't, having all the kids to help and support you was a blessing not a curse.  The kids were your retirement plan.

The point is that, in the not so distant past, kids were not expensive.  If anything, they were an asset to the household.  It only through the lens of today's society that they are perceived as a liability.

All that being said, no matter what the century, the merits of having children go way beyond the monetary!

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