High costs shrink size of families: The price of raising kids
Many of the people who raise questions and send emails the “In Depth With Dan” segment with WRAL anchor/reporter Dan Haggerty want to talk about how costly it is to simply get by.
The overwhelming cost of living can be stressful, cause anxiety and make people feel helpless.
A group of people known as D.I.N.K.s (dual-income, no kids) think they’ve got a part of it figured it out. Several have gone on social media to explain their spending habits without having to worry about the cost of having children.
In December 2023, The Atlantic published a story called “The Great Cousin Decline.” It reveals that couples are having fewer kids. With fewer children per family, it means fewer cousins too.
World Bank data shows the average American family had 3.65 children in 1960 compared to about 1.64 children per family in 2020.
Sociologists blame the declining birth rate on a variety of factors, like the decline in mom-and-pop businesses. People often had kids so they could help run the business.
There’s also the emergence of birth control pills. The U.S. Food and Drug Administration [FDA] first approved the birth control pill in May 1960.
In July 2023, the FDA approved the birth control pill to be available over the counter. Birth control access can lead to fewer unplanned pregnancies.
When the National Center for Health Statistics looked at the decline in family size, one of the top reasons people gave for having smaller families wasn’t access to birth control. It was the cost.
State data shows the average cost for child care is around $9,200 per year.
A WRAL News viewer named Keith said his day care bill for two children will be more than $36,000 per year.
A 2020 study from the Berkley School of Business found 78% of millennials and 73% of Gen Xers are dual-career couples, meaning both people work full time.
While this statistic demonstrates wonderful advancements in equity, equality and opportunity in the workplace, it also omits some unforeseen ripples to the American dream.
U.S. Sen. Elizabeth Warren, D-Massachusetts, and her daughter, businesswoman Amelia Warren Tyagi, wrote a book released in 2004 entitled “The Two-Income Trap, Why Middle-Class Parents Are Going Broke.”
An excerpt of the book reads, “As millions of mothers marched into the workforce, savings declined. And not, as we'll show you, because families were frittering away their paychecks on toys for themselves or their children. Instead, families were swept up in a bidding war, competing furiously with one another for their most important possession, a house in a decent school district.”
The book states that, in many cases, it's no longer a perk to have two earners in the family. Rather, it's a necessity.
The market for big-ticket items like a house, cars or college has adjusted.
Last year in the Triangle, housing affordability was at an all-time low. In August 2023, the Triangle’s home affordability index dropped to a score of 71. It means the typical family only earns 71% of the income needed to buy a typical home.
Triangle MLS data shows the median sales price for a home in January 2024 was $381,000.
Plus, if you can’t afford a house, how can you afford everything else?
Home ownership is a starting point, not the end of the financial stability equation. What about emergency savings?
A Bankrate survey found nearly one in four U.S. adults have none. In 2023, Fortune reported that 57% of Americans can’t afford a $1,000 emergency.
Emergencies can happen at any time and can include a medical emergency, car problems, a dishwasher breaking, or the HVAC going out.
People have turned to credit cards. At the end of 2023, according to Experian, Americans were carrying a total of $1.129 trillion in credit card debt.
According to LendingTree, the average credit card debt in North Carolina is $6,700 with the current average interest rate of 20%. It would take the average person 17 years to pay it off and cost nearly $10,000 in additional interest. Almost half of millennials have student loans and are about $40,000 in debt on average.
Investment management company Vanguard estimates millennials are on better track for retirement than Baby Boomers or Gen Xers because of automatic enrollment in 401Ks. However, all three generations are behind.
The less money Baby Boomers (born between 1946 and 1964) have for retirement, the more they will rely on government assistance. A report last year found Social Security is expected to be depleted by within about a decade.
It means unless Congress does something, Social Security will shrink or worse.
Congress could make cuts to the benefits or grow the pot, which means taking more money out of paychecks from employees.
