Can I Afford to Say 'Yes' Another Baby?

Okay, welcome everyone. We are back again. Phil Francois, Foundation Wealth Planning.

We are talking about some money, some money things related to you and your family. And I got Darren joining me again. Thanks for coming on, Darren. 

Hey, Phil, thank you. 

We are talking a little bit about something that is probably relevant to a lot of you, and it's a topic that's talked about in secular society a lot, and that would just be the cost of having children, and specifically kind of taking on the frame of can we say yes to another one? Right? I mean, we obviously see them as a blessing from God, and like, can we, but can we afford it? Right? Obviously, life's expensive these days. Inflation's gone, but we're going to talk a little bit about how that works in today's environment, things that we can say yes to, maybe we don't say yes to if we're having more kids, and just kind of how that works on a practical basis within our budgets and our lives, and hopefully provides a little bit of value. There's a couple of dads kicking it. We obviously are both financial planners, so we come at it from a financial angle, but we also have multiple kids. I personally have four with a number five on the way. Darren, how many kids you got these days? 

I've got five kids with number six on the way. 

All right, so we got a little personal experience with this and some professional experience with this, and I hope it's an enjoyable conversation. So definitely, yeah, go ahead. We got kids. What do you think is, what do you think is kind of the when you hear, yeah, we just, we're not going to have any more. It's just too expensive. You know, we got our two kids, but that's kind of all we can do these days. What goes through your mind? What do you think about that phrase? 

Yeah, I, so I enjoy CrossFit, and I have my friends at the CrossFit gym, right? And they're not in this Catholic world that I'm in for the most part. And I remember telling one of my buddies there that I think it was when number five was on the way. He just looked at me and said, "Dude, are you crazy? Like, are you rich or something? Like, how?" And you know, I kind of understand what you're saying, but it just didn't ring true to my experience. I said, "No, I'm not rich at all, but somehow it just works out." I think, you know, we can look up numbers on how expensive is it to raise a child, you know, annual expense. I saw one survey or study that said on average in the United States about $29,000 a year per child. Now, I've got five, and I'm not paying, I mean, I'm not paying $29,000 per child per year. So anyway, in my experience, this general sense of how expensive it is, it seems to be inflated in the general public opinion. What do you think? 

Yeah, those stats that come out there are always interesting. And I've seen some that take more of the lifetime cost of a child. You know, it's a couple hundred grand or whatever it is to raise a child 18, and then of course you have the cost of college beyond that. And it, you know, the numbers are staggering, and I, I don't know if it's some sort of biased fear tactic to try to get people to have less kids. I don't know, but it doesn't seem to me that it costs that much to raise kids, although it is, they do cost additional funds. So we'll prevent that between various doctor's appointments or hospital visits or, you know, as they get older, the food bill does get bigger. And so there, there are things like that that are real, but some of them are also imaginary. Right? Like, you're going to have a car. Most people are. And so instead of having a, you know, a mid-size sedan or something, you know, you have the minivan. And that's just like, you have, you're going to pay for a vehicle regardless. And maybe one is slightly more expensive than the other, but you're going to have a vehicle. You just get a little bit bigger one, and maybe it's slightly less fuel efficient, although minivans are pretty good on gas mileage these days. And so, you know, you don't end up having a net, net not as extreme a cost. Right? I think we sometimes have this, I'm sure there's probably a name for this bias, but I don't know it, but it would be we always kind of look to the extreme or like, what's the worst-case scenario on things? Right? That's just kind of our brains always work in that, in that sense. Yeah. And then of course, any news article that pops up that reinforces that, right? You see the headline of like, it costs $30,000 to raise a child per year, and we just kind of always lock in on some of those, and we get these reinforcements on things that maybe aren't necessarily true, but on the maybe on the most extreme end, maybe they're true, but that's not the case for the majority of people in most situations. Does that seem fair? 

Yeah, for sure. For sure. And then so of course, there's the monetary aspect of this, which I think is overinflated, but then there's the intangibles, which, you know, as Catholics, we know from scripture and just our experience that children are a treasure, and they'll you'll receive much more than you ever give. I'll share this story, this experience I had. It was Ash Wednesday of last year, and we're a little late to mass, and so it's already started. All the seats are taken except for the front row. Wait, you have young kids, and you show up late a little bit late to mass. I know, amazing. And that does happen from time to time, right? So a little embarrassed, but whatever, I'm a little used to it. I marched my family up there, get in the front row. My oldest is nine for a little context. At the time, my oldest was actually, at the time, my oldest was seven. A little embarrassed about the commotion going up there, getting everybody seated, taking the big old backpack off. But I sat down and I just looked down the pew just to see my kids and I was just overcome with this feeling of gratitude. And I always, you know, I'm always grateful for my kids, but this was different. And you know, this is just an experience. I think it was a grace from God. No, it was not like a mystical experience or anything. It was just, I think it was a grace that I was overcome with so much gratitude. The only way I can describe it is I felt like I had $100 million in the bank. I just felt enormously rich, like I could have anything I wanted. And it was something beyond more than just like the regular kind of gratitude for your family. And I knew that this feeling I had wasn't going to last the rest of my life. I was like, "Oh my gosh, I'm going to just kind of savor this while I have it." And it was amazing. And sure enough, after mass, we're driving, or we're walking back to the van, and I can feel it starting to fade away. I'm still grateful, but anyway, to this day, a year and a half later, that even just the memory of that experience is such a huge consolation to me. And I don't think of it as, oh, I was kind of given this extraordinary kind of feeling that and now I'm back to reality. I feel like no, that what I experienced during that hour was actually the reality. And now I'm kind of back to my like kind of fallen instincts of, well, I'm kind of clouded by all these other kind of concerns, you know, worrying about money and things like that. So I just felt like, you know, we're here talking about how expensive is it to raise a child, to have another baby? And but for that hour, I kind of felt like, oh my gosh, I mean, it's it's like winning the lottery. It is just kind of completely different way of looking at it.

Yes, and I think that's a real grace that you had received there. And it just seems that there's, yeah, we look at everything like it's in a spreadsheet, right? And when I'm talking to clients, a lot of times it's like, there are decisions that would be optimal within the spreadsheet, but life lives outside the spreadsheet, right? And this one is, it couldn't be, it's clear as day, right? Like, the optimal answer for a spreadsheet is to just get married and have two incomes and no kids. That is your spreadsheet and your balance sheet is going to look incredible after 15 or 20 years. But, you know, I know there's some people that choose to live that way, and there's unfortunate people that don't choose to live that way and they're not able to have kids, so I'm sensitive to that topic. But there are people that just choose to live that lifestyle, and you're missing out on so much grace and ultimately like you said, real wealth. The wealth that goes beyond the spreadsheet and the balance sheet is, you know, our kids and our faith and even our health, right? Our physical health, but you don't realize how great you have it there until that's gone. And so, but obviously we're focusing on kids today, but there are things that are just lifestyle things that we just, yeah, okay, we're going to, we probably save a little bit less for retirement. And so maybe that means because you're going to have an extra kid or two or three or whatever from whatever the number you thought it was going to be, maybe that means you have to work a few extra years. You know, you don't get the sail off into retirement date at 62 or 65. Maybe for you that means it's 70 or 72 or whatever. But again, the trade-off, you're getting to have a full house, potentially a full house of grandkids coming over on Christmas 30 years down the road. Those things are, you can't really replace those. And so these are a lot of these are conversations I have, not specific to this discussion always, but it's a broader conversation about finances in general. But there's always trade-offs in life. And so there might mean because they do cost a little extra money, not to the extreme that some of these articles would say, but they do cost some. And so maybe that means that you have to work a little bit longer or whatever, but that's part of life, right? I just see that as this is life and this is the best part of life is having this family that's growing. And to give that up just so you can retire a little bit earlier just seems like it's a little bit of a misaligned priorities of what's the most important thing in life and how we're living our life.

I think that's well said. Nobody goes into marriage and family life saying, "You know what, this is going to be so easy and I'm going to get so much out of this," right? It takes a spirit of self-sacrifice. It's going to be hard and it's going to be worth it to do that to raise these kids and to incur the expenses that come along with that. It's worth it. Yeah. Exactly.

And once you've got, we've talked about this in the past, off camera, but just how, you know, practically speaking, and I'd be curious kind of maybe some of your practical tips around a bigger family. But just, you know, things do scale, right? So some of this is like, once you've upgraded to the minivan, like I've already talked about, you know, that's going to hold, I don't know, five or six kids or whatever, how big of a van you have, where you've got a six or seven or eight passenger van, maybe you have to upgrade to a bigger van at some point. But you can get the van, it's going to haul everybody. Worst case scenario, there's actually this point in this book called "Hannah's Children." I'm going to give a shout out, my wife's been reading this book, and it really gives a very economic overview of large families and really kind of demystifies the cost of this. And so my wife has been reading it, she's loved it, raves about it. I would highly encourage people to read it. But it looks at big families across different spectrums and religions and things. But it talks about, you know, for example, you can upgrade to the van, but say you get to the point where either you don't have a van or you can't afford the upgrade to the van, but you have two cars. Well, of course you could sell one and then have one big van. Or as she was saying, you could even just take two cars to certain places, right? In a lot of and a lot of times you're driving within 20 minutes of your house or whatever. And if we need to, if you're not in this season able to afford the upgrade to a larger vehicle or maybe you just drive in two cars to one place, right? So there's kind of some practical things you can do that again, we always think about this worst case, we've got to buy the biggest van, the best van, the this or that. But you know, maybe we either consolidate to one car and upgrade that, or we just take the two cars we have and we just take all the kids in one thing. So it doesn't have to be like this all or nothing. We can find these solutions as we're growing our family and we're maybe not the highest income that we'll ever have. That's kind of the fun of it though. You're usually young, you're not your peak earning years, and you're just figuring it out. And that's one of those things that you can, you can kind of have a stopgap of, we don't always have to buy the biggest, best, nicest thing, and you can make it work in that regard. 

Some friends of ours actually have just recently done this. They've for about a year, they've been doing the caravan thing. And you know, they made it work. It wasn't ideal, but they made it work. And then now finally they're in a position where they can get the sprinter van or what I like to call the airport shuttle, right? The airport shuttle van. Some of those new ones are really nice. Sidebar, some of those are really nice. Obviously, there's some ones that are just get the job done, get you made to be, but some of those new ones, you can spend a lot of money, but man, some high quality travel in some of those vehicles. Yes, for sure. But yeah, I mean, there's all kinds of things that you can scale like that. We look around our house and we're amazed at how much mileage we've gotten out of these things, like a high chair or a car seat. I mean, we still have our original diaper bag that we got when our oldest was born. Some of these are pretty much like one fixed expense and then they'll last quite a while.

And another thing is, if you're blessed to have your parents still around, I mean, grandparents, especially if they're like mine, where they don't live in the same town as we do, they love to show love by sending gifts. So if there's something we need for the kids, for us, that kind of goes on a list and then next time grandma or grandpa says, "Hey, what do the kids need? So-and-so's birthday's coming up," we kind of say, "Well, actually, it would be great to have this or that." So some of our needs are met that way too.

Absolutely. And there are going to be trade-offs beyond some of the tangible things, but it's a lifestyle thing. So again, when we're talking about this with some clients, it's, "Well, okay, maybe you're not able to go take this high-end trip to Disney or whatever, but you can go and get a cabin at a lake nearby or something." And the kids are going to remember that, they're going to love that, and they're not necessarily going to feel like they were taken out of this other trip that may have been cool. They're going to remember the cool trips that you did take, and you can take them locally, and maybe it's camping or maybe it's a cabin or whatever, obviously still costs some money. But you have to pick and choose a little bit.

Same with sports, right? Maybe just do the rec league and you're not getting into these competitive travel leagues that cost an arm and a leg, but you can still play sports, right? You don't have to give up all these things. It's just making some of these sacrifices, you can make it work. You just have to be intentional with it. And for those that are desiring bigger families, or even just trying to follow the Catholic ideals of having the kids that God has blessed us with, you can make it work in this day and age, but it's got to take some intentionality. Because if you're not intentional and you kind of flow with what society says, then maybe it really does cost $30,000 a year or $200,000 to raise them until they're 18, or whatever the numbers are that they've thrown out there. And it easily could cost that much. I guess maybe that's a thing to throw out there, that it certainly could cost that much, but there are ways certainly to navigate it that it doesn't need to, and that shouldn't be the thing that stops you from having another child. Is that a fair way to say that?

That's totally fair. It probably could cost even way more than these estimations. But that's what we tend to think of children as an expense today. Back in the day, before the Industrial Revolution, children were really thought of as a blessing, of course, but also an asset. To live on the farm, a few years of investment of growing that baby, and then before too long, they're putting in meaningful work on the farm. And in some sense, your family's financial future was in a large part dependent upon having these children, and the more the better. Our society is so different now, it's just kind of like viewed as, "Okay, money out. This is a thing in my life now that I'm going to enjoy, but that's money out of my pocket." I think that affects people's mentality deciding whether or not to be open to more children.

No, I totally get that. And now it's looked at a little bit more in a, if you're thinking of it as a benefit to society, not necessarily in the agrarian sense of being a labor on the farm, but to have kids and to have them, that you're raising them in the faith. And now you and your wife have five, six, seven kids, whatever the number is, and they now go out in the world and they can have families. And you can think about how the culture can ultimately change through one or two generations of great Catholic families having kids that go out in the world, and maybe there's more priests that come from these large families, more religious sisters that come from these families, and just great mothers and fathers that come from these that will produce more.

So it's also a bigger thing when you're thinking about it's not just our personal finances and our big trips, but as we talked in the last video, the family is the base of society. The good of the family ultimately benefits the good of society. And we can think about that if we have two kids, that's good, but to then have four or five or six or whatever the numbers are, and we can push a little bit more out into the world, how much extra the more graces we can have and the more good we can have. And ultimately, thinking about grace, God is going to fill that void. It's challenging at times, but we lean on God in those hard times and trust that it's all going to work out. But trying to have the faith and the trust in Him in the process about raising these kids, and ultimately what that can do for our family and then just society at large. That's a legacy that's hard to quantify, and we don't really know the legacy and what we're leaving behind until probably we're gone, because a generation or two from now, it's going to keep building and going. But that is going to persist, the value you instill in your kids and the big family that you had, and that's better than an extra trip to Disney in my mind.

For sure. And also, I would like to make clear that we're not giving blanket advice to everybody that it would be good for you to have more children. There are definitely cases where a couple, it is legitimate to decide not to pursue a conception of a child at that time. So we're not saying every family has to be like a baby factory. But children are a gift, and I think that core fact, children are a gift and a blessing beyond any kind of higher bank balance. And I think people don't generally put enough weight on that.

No, that's a great comment and a fair distinction, that we're not here to be the arbiters of your family life. But I will say that the couples that I've had come talk to me when I'm meeting with them, it's a certain profile of couples that are doing really well. They make well over what most people are making, they've got a lot of money saved and invested. And they'll sit down and say, "Can we afford to have kids?" And you're looking at it like, "Yeah, you're overthinking this." But that's a common thing, again, some of the societal things that we live in, and how much it costs and all that. And so maybe this is just a little bit to quell the fears of, you know, you can do it. It takes some sacrifice, but there are certainly people out there that maybe want to have more kids but they think that they can't. And so maybe this is for you, that you definitely can, and maybe in many cases should, maybe not all cases but many cases should. And in a lot of cases, you're overthinking it. We have these over-analytical brains and we always overthink some of these decisions. But the gift that they are outweighs the challenges that we have. But I've seen this numerous times with people I sit down with that don't have kids and they're like, "Well, when we hit this certain milestone of income or net worth or whatever," or just even don't even have that number fleshed out but just saying, "Can we afford this?" And pretty much every time it's like, "Yes, many times over in fact."

So you ever heard the saying, "Every child comes with a loaf of bread?"

No, I don't think I have actually.

I can't remember where it comes from, but my wife said that to me when we had one of ours on the way. And I think there's something true about that. Our faith tells us God is not outdone in generosity. I think it is an act of generosity to bring a child into the world and to care for that child, an act of generosity for the siblings, you're giving them a sibling, possibly the greatest gift you could give a child. And to the world too. Like you were saying earlier, this child, form them well, and they'll go out and be a blessing to the world. So that act of generosity, I think our faith tells us God will respond in kind and not be outdone in generosity. So not saying all your bills are going to be paid no matter what you decide, but there's something to that.

Absolutely, I couldn't agree more. And I think as we're kind of wrapping this up a little bit, I'm curious if there's any words of wisdom you'd have to newly expecting parents or parents that are maybe

crossing that threshold, sometimes there's just that big threshold of going from that two to three, a societal block almost, about, you know, most things are catered to families of four. Now you're into five total family members. So I'd be curious if you have any thoughts on breaking through that barrier just mentally, societally, or if you have any words of wisdom for people that don't have kids yet that are wanting to and are expecting.

I'll tell you what, I got a relatively late start. I got married when I was 35, which is not unheard of these days, but compared to the past 100 years of regular practice, that would be a little late. And I'll tell you what, I've heard some friends of mine say, "You know, I'm getting married, we are going to just kind of enjoy life for a couple years and then we'll start having kids." And I would challenge that mindset. It's an adventure and one that's going to be amazing, and just start it. Just be open to starting it. Consider the intangible, non-spreadsheetable benefits. I don't think you're going to regret starting that when you have a little more energy.

No, that makes sense. And I would definitely echo that as well. And also on the two to three kid jump, because sometimes people will say that maybe it's not financial. There's the financial aspect, there's just a lifestyle aspect, but just the challenge of having two kids. Sometimes that second one most people will find is more challenging than the first in a lot of ways or having a second. But if we're talking about things that scale, getting past the two-kid mark, that does scale as well. So we're talking about reusing high chairs and cars and things like that, and beds and cribs. That is a financial thing that scales. But the jump from two to three in terms of managing it is not maybe what society would say that it is. And so I always tell people, your time is already maxed out. Anybody, you have no more time to give in a sense. So everybody just learns more patience and is forced to learn a little more virtue. We're just learning virtues and gratitude. Learn a little more independence, and it works out. You just learn more patience. And some, I've heard other people say, "You know, going from seven kids to eight kids is easier than going from two to three." Two to three is a big jump. You're outnumbered, but these kids help take care of each other as they grow. They become their natural playmates, they teach each other, and I think it helps with their growth.

Absolutely, I think that makes a lot of sense. And I guess one thing we didn't really address would be the actual medical costs associated with the birth of a child. That is also a real thing. It's shocking how much a night stay at a hospital costs. Most people have insurance or some sort of health share, so maybe it makes sense for you to evaluate having a lower deductible or something to help offset that. Or I've never done a birthing center, but certainly you can explore some of those alternative ways to have a baby if money's really tight or if you just enjoy that experience. But there are also ways to mitigate just really being proactive with what your medical plan situation is and trying to help offset some of those costs the best you can. And it is doable, but you do have to have a little bit of preparation on some of that. Do you have any thoughts on that front?

Yes, it definitely is worth talking to somebody to make sure you have the right kind of medical coverage in place. My firstborn, after he was born, he had to be in the NICU for a couple weeks. I looked at the bill, the total bill after insurance or before insurance, it was like, as far as NICU goes, we were best-case scenario, we were very blessed. It wasn't a severe scenario, but two weeks in the NICU was something like $14,000, and my share of the bill was $750. I have never been so happy to pay $750 in my life. So it is definitely worth making sure you have the right coverage in place.

So that definitely is a practical thing that is real. There are real dollars that go into that. So definitely if you're not comfortable selecting that, I would definitely work to engage a professional reviewing your insurance, whether that be a financial planner or an insurance specialist. But get someone in your corner to evaluate those and just make sure you're making good decisions on that front because that is a cost that is coming, and trying to make sure that you've got a handle on some of those things is important. You have to be a little, you learn when you have kids, you just have to be much more proactive. Before kids, you can tend to be more reactive and just kind of take life as it comes, and a lot of people are like that. But you have to be a little more proactive with kids, and no time like the present to get a jump on that before you have your first child and make sure you have the right medical coverage in place.

Okay, well, this is good stuff. I think there's a lot of offshoots we can have on this. I think we're planning to have other topics about family, maybe the cost of Catholic schools, things like that. So I think we'll have some really good discussions and kind of build on this, and then other financial discussions in future meetings that are not family related at all, but just specifically due to financial planning and some basics. So hopefully everybody tunes in for some of those future discussions. But otherwise, Darren, I think we've got it kind of wrapped up. Any final thoughts on this topic today before we sign off?

No, we covered a lot, and there's a bunch more we could cover, but we'll save that for another time.

Very good conversation. Thanks for coming on, Darren. I enjoyed the conversation as well.