Having come of age during the Great Recession, millennials have become among the most money-conscious of generations. But as they become parents, juggling financial priorities becomes more challenging. For young families also trying to save for college and retirement, it can lead to some very tough choices.
Tracy and Matt Merrell are building a family in suburban Washington. With two-and-a half year old Jake, they planned for an addition. What they didn’t plan for was an addition times two.
(Matt Merrell said “I was just knocking my head against the doctor’s office like, ‘Oh no!’ And it’s the worst thing to feel, because it’s like awesome having kids, two kids, but it’s also horrible to think the first thing I can think about is money.”
“Now with the twins, as it relates to daycare, that’s terrifying because we know how much it costs now,” said Tracey Merrell, “and I know that we both want to continue to work.”
The U.S. Dept of Agriculture has tracked basic expenditures on children like housing, food, transportation, clothing for more than 50 years. It says the total has increased every single year, now topping $245,000 from birth to age 18, not including college.
USDA economist Mark Lino said one cost has pushed the total significantly. “One of the big increases on the cost of raising children is on child care and non-college education. When we first did the study in 1960, child care accounted for about two percent of the overall cost of raising a child. Now it’s 18 percent.”
That’s because the number of families with both spouses in the workforce has also increased.
But the Merrells know that staying at home would carry a price tag, too. So as they prepare for child care times three, they’re looking closely at their budget, for other areas to cut costs. The ability for Jake to share toys and hand-me-down clothing with his brothers will actually reduce the average cost per child — well, at least until college.
“You just get through it,” said Matt, “and I think we’ll get through it. It’ll be a fun ride, I guess. if we make it.”