Inflation Is Taking Its Toll On Growing Families

Having a baby should be a joyous occasion not a financial curse.

Photo by Rajiv Perera on Unsplash

When I was getting married in the late 1990s and was thrown bridal showers, the old traditions still existed. Women would tie ribbons tightly around the packages. As bride-to-be, my job was to get the ribbons off without breaking too many, for each broken ribbon meant a child I’d be having. I, honestly, don’t remember how many I broke, but I know it was more than one. My elders really knew how to tie those ribbons tightly!

It was fun and got a lot of chuckles from guests. Though my husband and I wanted two or three children, the fates provided us one, wonderful daughter. As we dreamed of our life together as a married couple, never once did either of us research the cost of providing for our child. Never once were we dissuaded from our dreams.

Today, however, things are different.

According to LendingTree’s Matt Schulz, the cost of raising children in Biden’s America has risen. Inflation is making the costs of everything from childcare to housing increasingly expensive, which explain why many are delaying marriage and having kids. As per Megan Henney’s report for FOXBusiness, the average cost to raise a child from birth to age 18 is close to $240,000. Honestly, is that a lot over 18 years? Compare that to four years of college and $240,000 seems like a bargain.

Nevertheless, one of the contributors toward this price tag is childcare. In her article “How the Cost of Raising a Child has Changed Over Time,” Dr. Francesca Otregren writes that the 2020 U.S. Census showed a third of “parents with children 5-years-old or younger in regular care arrangements had children in non-relative care (which likely costs money).” The average cost of childcare in 2021 was $200 per week. Today, Business Insider estimates that the per annum cost of childcare is $12,883.

Notice that as the cost of childcare is increasing along with most other items, only one-third of mothers is using paid childcare. What are the majority of mothers doing? Dr. Otregren states that most are using relatives as babysitters. Seems like a sensible option, especially when by age 5 children go to kindergarten. Thus, childcare costs for 33% of the population of mothers in the United States should end or at least be reduced when school begins.

However, when you figure that the average salary in 2024 is $59,428, the cost of childcare is seen in a different light. Amongst married couples, those who both work is 67% (Bureau of Labor Statistics). This means that for a combined average salary of $120,000—which is most likely high—over 10% of their combined salaries goes toward childcare.

Can sacrifices be made? Sure. If you calculate one person’s cost of a drink at Starbucks at $5 and multiply that cost every day over 18 years, you’ll have spent $32,850. Do the same for fast food and you’ll be amazed how much you are spending. Everything adds up and keeps going up due to inflation. Additionally, with the mandates of a $20 per hour “living wage,” prices rise, customers complain that Big Macs are too expensive, and McDonald’s figures out a way to curb costs—more kiosks and less actual workers.

If shedding workers doesn’t ease the burden, businesses file for bankruptcy. Look at California’s Rubio’s Coastal Grill, which established itself in the 1984. They closed 50 locations across California and filed for bankruptcy because of the “rising cost of doing business” (KTLA5). Neither McDonald’s approach nor Rubio’s approach is beneficial to those needing a job. Government mandates once again fail to understand business.

Adding to financial uncertainty is the cost of housing. During inflation two things are at play. The rise of interest rates means that those who have a home will be reluctant to sell, thus creating a shortage of available homes in the area. For builders, the costs of material and labor increases means that those costs must be passed on to consumers. Forbes has calculated that the average home price in the United States is currently $495,100. Remember this figure is not inclusive of property taxes, maintenance costs, and utilities.

The lack of supply for rentals affects prices, too. In 2023, Statista listed the median rent for a one-bedroom New York apartment as the highest in the nation at $4,300 per month. So whether purchasing existing homes, building one, or renting with an average salary in the United States under $60,000, then people are paying well above the 30% housing rule.

My husband and I can attest to the money crunch others are feeling. As you are aware, my husband is an electrician who is only a few years away from retirement. We have owned our modest, 2,300 square foot home for over 20 years, have taken advantage of refinancing, and currently have a low mortgage rate, most likely, never to be seen again.

But when his retirement day comes, we will be forced to leave our home. For, we calculated that it would take two months of his pension just to pay our property taxes at the amount we pay this year. Seeing as though our property taxes have risen $1,000 each year for the past three years, we see no stagnation in sight. The only way we could get a reduction in property taxes (or a leveling off ) is if, at 65-years-old, our annual pension payments equalled $65,000 or less, which is far under where we are going to be.

Since the leading cost of property taxes is the funding of public education, why should people without children or people whose children have graduated high school continue to foot the bill? Our school district is closing two schools due to a lack of enrollment, yet our taxes keep rising. It doesn’t make sense.

Moreover, there was a time when we valued those who worked hard to provide a better life for their families. Fathers may have worked two jobs or picked up overtime, so mothers were able to stay home to raise their children. Alternatively, some parents had two incomes from working alternate shifts, so someone could be home with the children. Or, mothers stayed at home but started a side hustle like selling Avon or Tupperware. But consider where we are today. Workers are being punished for earning more. Our tax system is training middle-class workers to become less motivated and productive.

For example, my husband’s blue collar, union job provides a good living with health benefits. Yet, knowing that our property taxes are high, I wanted to return to part-time work as a substitute teacher. So, we spoke with our tax advisor asking how much I could earn before reaching a higher tax bracket. We were told that if I worked just one day a week, earning $130, we will be above our current tax threshold. Trust me, we are not the Rockefellers.

It is true that inflation is causing strife. People are living paycheck to paycheck. But when is there going to come a time when we demand lower taxes? The call to tax the rich at 100% will not solve our problems, no matter what Bernie Sanders says.

Instead, we need to demand less government “assistance” and rely on ourselves. Our federal government can’t continue printing money to fund overseas wars in the name of democracy, illegally pay off student loan debt, and provide endless give away programs to garner votes. Furthermore, states can’t lie about having a balanced budget when they are woefully in debt—yes, I’m talking to you J.B. Pritzker. Political promises during election season sound great if you are clueless that anything deemed free ends up increasing taxes.

Though business analysts tell us that we should save 15% of what we earn, only 44% of Americans have enough set aside for an emergency costing $1,000 (bankrate.com). We can’t keep expecting government agencies to bail us out, leading to socialistic dependency. Furthermore, governments certainly are not role models of fiscal restraint.

Rather, what we need is to wise up and vote for those who will tell us the hard truths and will act on them. As voters, we need to stop kicking the can down the road believing we have enough tax dollars coming in to fund our every desire. And when not enough money comes in, we’ll just print more money. There will never be enough and our debt will continue to rise if we don’t start making cuts to all government budgets. When the federal government is listed in the top three sectors of employers, there is a problem.

If taxes were lower, there would be more money in our pockets to save, give to charitable causes, and spend within our means to keep the engine of supply and demand running smoothly. Needless government intervention and regulation never mix well with free market enterprise. Meanwhile, the politicians crying the loudest about corporations have made millions off of Wall Street.

No one should fear the cost of bringing a new joy into the world. Each life is a blessing, and we require those blessings to one day become part of the work force. But we, also, need to demand fiscal control from our elected officials.

Federal, state, and local governments must tighten their belts, so we can loosen ours.