Money: There's No Magic Number When Kids Enter the Picture
December 16, 2017
Before my children came along, money wasn't a major source of stress. While my wife and I have never been wealthy by any standards, we've always had enough. Enough to pay our bills on time. Enough to order Chinese take-out whenever we needed a good MSG buzz. Enough to spring for a round of shots when it wasn’t happy hour. Even enough to embark on the occasional adventure.
But things are different now. We have two kids, and money is on my mind a lot. I'd be crazy if it wasn't.
When you hit the lottery, you can opt for an annuity option where you receive installment payments for a fixed number of years – or forever, depending on how big the jackpot is.
Having a kid is like hitting the lottery and opting for the annuity payout. Only instead of getting paid, you're doing the paying. A little bit here, a little bit there, and the next thing you know, you've shelled out $4 million to feed, clothe, house, insure, educate, and entertain a human being you pray won't shove you in a home when you can no longer do those things for yourself.
Yes, $4 million is an exaggeration (unless you're a Wall Street banker or a successful reality TV star), but not by much. The Department of Agriculture estimates the average cost of raising a child born in 2015 from birth through age 17 is $233,610 or $14,000 annually for a middle-income couple with two children.
That's nearly a quarter of a million dollars before the kid even turns 18! It doesn't even account for astronomical college tuition bills that should be mailed out with a vial of Xanax for the recipient. Plus, if my children follow the trend of previous generations, I can expect them to live in our home until they're around 43.
I can't look at numbers like those without feeling my pulse rise.
Pre-kids, I never worried about living paycheck-to-paycheck. I never thought much about all the potential financial disasters that accompanied such a lifestyle. I genuinely thought that, if my luck took a turn, I'd simply drop off the grid, move to the mountains, grow a long beard, and live off the land.
People surely still do that type of thing in beautiful, exotic places like Canada or Vermont, I reasoned. Part of me longed for the opportunity. At least I'd have something to write about.
Then my daughter was born.
When that happened, I wasn't flooded with those feelings of instant love and inner peace you read about so often in people's Facebook posts. Nope, the warm and gooey feelings took months to surface in me. Instead, I was filled with an overwhelming urge to protect a helpless, loud, innocent little creature. Mixed in with that was a solid dose of terror and dread.
That protective instinct has changed my entire perspective on money, and the change was both instant and drastic. My wife and I hadn’t even been released from the hospital when I started making a list of all the bad financial habits I needed to change a.s.a.p.
These days, I can barely even order my beloved Chinese take-out without questioning whether the move was prudent. That’s the third time this week, Jared. If you put some of that Chinese food money into an HSA, then you’ll be able to pay for the heart attack that General Tso’s will eventually give you tax-free, I think to myself.
When I landed my first post-college job, I didn’t even enroll in the company’s 401(k) plan because I thought putting aside even three percent of my paycheck for later was absurd. Today, I consider not taking full advantage of the company match a form of financial suicide.
In the past, I mocked Tony Robbins and anybody who subscribed to that self-help garbage. Last year, I read Mr. Robbins nearly 700-page tome, “MONEY Master the Game: 7 Simple Steps to Financial Freedom”, cover to cover.
While I still occasionally daydream about going off the grid and living off the bare essentials, I’m firmly tethered to a world of bills and budgets and 529s and personal finance articles on the myriad things I need to be doing (Invest in Bitcoin RIGHT NOW or you’ll be sorry!).
My interest in money is more paranoia than passion. I don’t want my kids to miss out because I’m not paying attention. For better or worse, I live in a country where the already disturbing gap between the haves and the have-nots is widening at an alarming pace. Based on some recently passed legislation, it doesn’t look like that trend is going to change anytime soon.
That means I can no longer afford to be either naïve or idealistic in how I view or manage money. True, it doesn't buy happiness. But it can buy opportunity, and I want my children to have as many opportunities as I can provide without going to jail.
My family's financial security is one of the few areas in which I have some degree of control. In a world where I'm powerless to protect my kids from so many horrible things, I'd be a selfish asshole not to do everything I can to build and protect that security.
I guess the whole living-off-the-land fantasy will have to wait for my next life.