Does a Bad Economy Dictate Whether You’ll Have Children or Not?

by Darwin on August 19, 2012

I followed the path of (what I thought was) the traditional American life.  I went to college, got a job, got a house, got married and started having kids in my twenties.  This is what my parents did and their parents before them, and what’s always been portrayed in pop culture as a typical American life.  Now that I’m in my thirties, I’m seeing that some of our friends followed a similar path and some didn’t.  Some will never have kids, and are probably better off that way since they didn’t actually want kids.  But then there are the people in between that probably planned on a similar life path but things didn’t pan out the way they planned.  Divorce, health issues, job loss, and myriad other reasons why they didn’t have kids by the time they thought they would.  But would a lousy economy alone dictate whether or not you have children?  According to some recent data, the US fertility rate is now so low that we can’t even maintain the current population size without considerable help from immigration.  Apparently, a fertility rate of 2 children per woman is required in order to maintain the current population and we’ve now dropped to 1.9, which has been attributed to the economy.  Now that I’m a father of 3, have a relatively stable and happy home life and have some wisdom to share, here are some random thoughts on having kids and how finances and the economy may influence your decisions if you haven’t committed one way or the other:

My Thoughts on Children and Money If You Care:

  • Children Are Expensive. But So are iPhones, Nice Cars and a Vibrant Social Life – A lot of people complain about having no money yet they have pretty expensive hobbies.  As you grow up, really, it will be OK if you don’t have the latest line of shoes, True Religion jeans and iPhones.  Driving a car that’s a few years old instead of leasing something you can’t afford will not draw the scorn of society.  Maybe in the circles you run in, but if that’s the case, maybe it’s worth reconsidering your social circles.
  • No, You Don’t Need a Dual Income to Live These Days (usually).  Affluent Working Parents Use This Self-Justification to Assuage Their Guilt – There’s nothing wrong with working moms and dads.  My mom worked on and off when we were growing up while my dad worked full time.  My wife’s parents both worked.  And many of our friends are dual working parents.  We just chose to make it work with one income.  But if you can’t see yourself staying at home with the kids because they’ll drive you nuts, just admit it.  I work with many people at my level and higher where both spouses are working and they proclaim, “These days, you just can’t get by on a single income!” and the heads nod in unison.  I’m sorry, but that’s crap.  We do it on one salary.  But we keep our cars 8-10 years, kept our modest home instead of buying a McMansion, spend less than we make and, well, live on a reasonable income.  For people who make double what I make or more (easy to extrapolate knowing we’re at the same company, same level or higher), instead of admitting that neither of them actually wants to be a stay at home parent, just say, “We enjoy a certain level of income and a certain lifestyle and the only way to maintain that is for both of us to work”.  That’s fine.  Nobody will judge you for that since a good portion of the country is in that boat.  But let’s just call it what it is.  If you haven’t yet had kids and you constantly hear that you can’t make it in today’s society on a single income, don’t be discouraged if you had been hopeful for a single income life while the kids are young.  Just look around and do the math.  There are also plenty of people who make it work with some sacrifice.
  • If You’ve Hemmed and Hawed Over Having Kids for 15 years, You Probably Won’t be Happy Having Kids – A lot of people feel societal and family pressure to have kids these days.  Being childless for life isn’t as taboo as it used to be, but some people still judge.  Let’s face it, some people just don’t want kids.  That’s fine.  That wasn’t me, so I can’t relate, but when everything tells you parenting isn’t for you, don’t do it just to please someone else.  You’ll be miserable or make a horrible parent or both.
  • Children Bring Lots of Government and Legal Benefits – There’s a lot of help for people with kids.  Since kids can be expensive, and it’s not the kids’ faults if they’re not getting what they need, family members, social circles and the government all feel inclined to lend a helping hand.  In no particular order, here are a few places people get assistance solely because they’re parents: Child tax deduction, child care expense deduction, educational cost deductions and any number of other federal tax credits and deductions; free primary education K-12 (and sometimes, free pre-K and free college based on a number of factors); often free sports programs and social outings through religious organizations; grandparents and family members are often willing to babysit for free; free clothes, toys and other hand-me-downs from friends and families with older children; many free gifts for holidays and birthdays and the list goes on.  So, when you hear that it costs X to raise a kid, that’s an average, and includes things like paying for childcare, housing and transportation, which you may not have to pay for at all or would have paid for anyway kids or not (my wife and I would probably live in the same sized house even if we didn’t have kids).
  • I Assumed I’d Never Be Laid Off – I’ll be the first one to admit that when we decided to start having kids, a layoff was not something we ever even contemplated.  I was on fire at work and getting headhunter calls all the time.  My colleagues were jumping ship for better gigs rather routinely and I always thought if the going got rough, I could easily do the same.  I never thought having work would be an issue in our lives.  My wife was a teacher in a great district and we also assumed she’d have no problem getting back in when she decided to go back to work.  Fast forward a few years and my industry’s shrinking and states and local governments are finally starting to face up to the fact that they’re broke so teachers, cops and firefighters are being laid off (or at least they’re not hiring new ones), which is much different than when we decided to have children.  So, based on what’s changed since we decided to have kids and today, I can see why some people are worried about their economic future and may want to save more, solidify their career more or put off that kid for another year and ride out some uncertainty.  But how long does that cycle perpetuate itself for a couple?  Indefinitely?  At some point, it becomes biologically impractical to start a family regardless of modern medical interventions.

We’re in a so-called recovery.  In theory, people should be more optimistic about jobs, money and starting families, right?  If we’re truly in a recovery and we have this great hope and change president up in the polls for another 4 years, why are the economists saying Americans are having fewer children as a result of the economic outlook?

Are You Putting Off Having Kids Due to the Economy?

{ 10 comments… read them below or add one }

JT August 20, 2012 at 12:00 am

If the economy and child bearing are related (I do think they are), I’m happy to know that people are actually capable of putting off pregnancy. While the economy has deteriorated for 5-6 years, the trust cost of living has exploded. Food, rent, education, etc. are so much more expensive than they ever were. Not to mention, virtually every 20-something is nursing a child of their own named Sallie Mae. If you’re worried about the future, it’s probably not a good idea to have another person’s future to worry about.

I do think part of it is part of a larger societal change. My mom jokes that her generation went to college to get married. It’s not that way any more. With women more frequently chasing after their own education and careers, kids and families are pushed aside. I can’t say I blame them.


Darwin August 20, 2012 at 10:33 pm

When people talk about cost of living increases, it’s interesting to note what has changed. In many studies, food and housing comprise a smaller portion of total pay due to more efficient supply chains and mass food-farming and low interest rates; contrast that though with things we have as expenses that didn’t exist before. A few decades ago, there was no internet bill, no cell phone bill, people weren’t leasing cars, etc. Overall, I think the employment outlook is a big issue for many these days.


101 Centavos August 20, 2012 at 6:02 am

A bad economy is directly tied to societal hope in the future. When times are middling or worse, humans don’t generally choose to procreate. The Roman Empire had fertility issues in its waning days. Americans are doing quite well demographically compared to Europe, Japan, or China…. or even Turkey.


Darwin August 20, 2012 at 10:35 pm

America has immigration going for us. While we get plenty of duds, we do rely heavily on immigration for growth and it seems to have worked over the years. I just wish we were more judicious with the skills and criminal records of who ends up here. There used to be a day when you needed a skill to enter the US. Now, you need a family member living here or an anchor baby. It’s not perfect, but without immigration, we may well become Japan.


Joe @ Retire By 40 August 20, 2012 at 11:29 am

It’s all about how you are doing personally with your finance. If you don’t have a job and not much saving, then you don’t want to have a kid. It’s only natural to avoid extra responsibilities until you can take care of yourself first. We came though the economic downturn relatively unscathed and had a kid last year.
I agree with all your points about having kids. It took me over 10 years to convince the Mrs. to have a kid. She is happy with our kid now, but I’m more in tune with him.


Darwin August 20, 2012 at 10:36 pm

Glad you guys turned the corner! Thinking of having more or is one enough?


krantcents August 20, 2012 at 7:38 pm

My kids are grown and out on their own. My kids were born when I was 27 and 31. My wife was a year younger. The economy was not great, but my wife and I had good careers. I think the best time to have kids is when you are ready financially and psychologically.


Darwin August 20, 2012 at 10:37 pm

Agree; we’ve seen our fair share of immature and irresponsible parents as well. Often end up in divorce or being lousy parents.


Gillian @ Money After Graduation August 21, 2012 at 8:25 am

I am putting off kids until I can get myself out (or mostly out) of student debt, and my partner and/or I make some more money.


Darwin August 21, 2012 at 10:34 pm

That’s probably the right move. curious though, if you didn’t have any debt, would you have had kids at this time?


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