Saturday, June 16, 2012

The Cost of Doing Business

This just in, just in time for Father's Day, kids cost too darn much! 

By now you've seen the article that explained how expensive kids are today.  I went to the government report to dig inside the numbers that created the sensational headline, "Ouch, that bundle of joy will set you back 234,900.00!"

Don't tell me I'm not worth it.

It's the number that always makes the story buzz along. 

The first thing that makes the number high, is the equation.  Whether single or married, the formula uses Pre-tax income as the starting point.  We all know that our pre-tax income is an imaginary number.  This slight of hand alone inflates the figure regardless of where one shakes out in the economic scale.  

Statistical analysis took regional locale into account as a factor of housing cost, calculating the price of a bedroom to a house+utilities as indicative of the cost of housing a child.   If you double up your kiddos in a bedroom, some of that cost is halved.  However, the scary number still looms dangerously close to 1/4 of a million. 

So let's look at that number for raising a child. If we divide 234,900 by the 17 years, we discover it comes out to...$13,817.64 a year.  

Not so scary.
Not so sexy a headline either. 
And remember, the number is inflated by using the pretax number as the starting point.

The scariest thing of this study was not the numbers, not the cost, or even the fact that our government spends time doing this annually.  The scary thing was the why of this analysis, and the subtext commentary in the study itself:

The time involved in rearing children is considerable and has a cost attached to it. A recent study found that the imputed value of parental time spent on children exceeded the direct cash expenditures on them (Folbre, 2008). In addition, to care for children, current earnings and future career opportunities may be diminished because of job choice or reduced time in the labor force for one or both parents. These situations also have a cost attached to them.
The direct and indirect costs of raising children are considerable, absorbing a major share of the household budget. On the other hand, these costs may be outweighed by the benefits of children.

Here's the report if you want to go in and calculate the numbers yourself: Cost of a kid as estimated by the government.

Implication of that final concluding sentence of the report: The benefits of children MIGHT NOT outweigh the economic costs. 

So remember folks, the government is here to keep you on the economic up and up.  Free birth control and abortion for everyone!   

Oh...and the picture for the article has been modified so that it only shows a shot of the cute baby.  It used to have the cute baby adjacent to a photo of this:

Cost of a Ferrari (2009) F430 --up to $217,310.  That doesn't include interest cost on the financing...can you finance a Ferrari?  Is that even possible?  Can a Ferrari last 17 years? Would you want to make car payments of $1065 a month every year for 17 years without ever getting even so much as a Happy Owner's day card in return? Will the car run as well when it is paid off?  A 17 year old runs much better than a 1 year old, so a kid grows as an investment...whereas a car...well, my newer car is a 2008.  I'm still paying for it. My newest son is also a 2008, but I think my four year old is much better looking and cooler too and worth every penny.

Yeah...I like cars too...but this little Italian is MUCH better than a Ferrari.

But since tomorrow is Father's day, Dad's ten would be super sports cars are going to be mulching and weeding and trimming the trees. 

Wonder how the government weighs/calculates the values of being charged in the morning in a mad scramble to hug my husband's legs, or the run to the table if mom and dad say, "Let's play cards." or the grins they give when they get solo time for whatever reason doing whatever it is...I know what I call time with my dad...the same thing my kids do with theirs....priceless.  

Living large...but not in a governmental sense.  What would we do with ten cars anyway?


RAnn said...

I don't think there is any denying that children are expensive. However, as I read the way they calculate those huge numbers, one biggie is that they more or less charge the kids rent--they allocate a percent of the household bills to each kid. Frankly, in my experience, the price of the house in which a family lives has much more to do with the income of the family than the size.

kat said...

Different kids require different expenditures. The first child is expensive because you have to buy a bunch of stuff you had no need of before: crib, car seat, stroller, tiny clothes... The second and third child require almost no new expenditures until they begin school (or in our case homeschooling) and piano lessons are expensive. For us the 5th child was costly as we had to purchase a full size van to replace our minivan because children were losing circulation due to being squeezed between car seats. Then once we got above 6 children a larger house was really necessary, as well as another few bathrooms. So... Baby #1 costs about $1000 a year, #2,3,4 cost about $600 a year, while #5 costs $25,000, and #6 costs $350,000.

TerentiaJ said...

I don't know all the government figures in, but parents' magazines also come up with these numbers. It's interesting to see what they consider normal expenses: a $500 jogging stroller instead of a $14 umbrella stroller. $1500 for a designer crib and don't forget the matching dressers. I don't know anyone who pays $80 dollars for a pair of newborn crib shoes but apparently these are must haves also. The point is that children, like all other expenses, cost what you are willing to pay. Unlike other things we pay for, children are eternal and priceless.

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