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Every time I hear parents complain about kids being expensive, I inwardly roll my eyes. Trust me, kids aren't that costly, it's the expensive choices parents make that put a hurt on the wallet. Given that the government gives you tax credits and exemptions just for having kids, those families living cheap can virtually turn their kids into a profit center, especially when you consider that children can work starting in their early teens. Run the math, if you have 3 little ones and have AGI under $110,000, you get nearly $7,000 in money back from the government in the form of reduced taxes and credits. That kind of money can pay for a lot of food and healthcare and make it cheap for kids. Below are the first five of ten things that people always point to as reasons why kids are expensive and my thoughts as to why it just aint so.
Parents bemoan the cost of a private education. If you have 3 kids in private school, each of them could cost you $12,000 a year or more in tuition. But there is another option that you may want to consider and it costs exactly nothing: public school. I know that there are parents who will tell you that the public schools are awful, and many of them are, but there are thousands of good public schools and many of them are within a 20 mile radius of where you're living. Sure, those districts often come with higher housing prices, but you want to live in a nice place anyways, right? For an additional $500 on your mortgage payment, you should be able to cover the cost of a good school district. Not to mention that there is this novel concept called renting which saves you from having to pay a dime in special school assessments or property taxes.
Parents look like a deer in headlights when financial advisors project how much a four year university education is likely to cost in 15 years. It's a great incentive to hurry up and sign onto that horribly underperforming and fee-laden college savings plan that the financial advisor has been kind enough to set up for you. But the cost of college is vastly overstated when you consider all the options out there. First off, if your kid is really bright or if he can run the mile in four minutes, there are tons of scholarships. And if they manage to get into a top tier school like Harvard and you make under $180,000 a year, you won't pay a dime in tuition. Not that bright or talented? Then maybe its time to think about community college for two years where you pay a pittance for tuition and the kid can continue to live at home and mow the grass. When they are done with their two years, they can always head over to state school and get themselves a low cost Bachelors. If the kid can't get community college grades to qualify for a good state school from community college, then you might want to think about why they are going to school anyways. At least they'll have a two year degree in hand instead of walking around with the stigma of being a college drop-out. If you want to invest serious change in their education, wait to see if they're graduate school material.
Besides, some of that college cost is likely to be defrayed with your child's income both in high school and college. There is such a thing as summer jobs that help build character and usher the young into the real world - you know - the one the rest of us have to live in. Do a little research on the availability of a host of grants and low interest student loans and you'll see for yourself that if a kid really deserves a college education, the absence of ready cash in a trust fund is not what's going to keep him from getting one.