One of the top reasons adults choose not to have kids is the cost, which is only rising.
Those who already have kids are finding that it’s becoming increasingly expensive to cover the cost of necessities like groceries and diapers. The latest numbers show that “the American Dream” is out of reach for the average American family.
What can parents do to make ends meet in an economy where the cost of basic needs keeps inflating?
There’s A New Report Detailing The Cost Of The American Dream
How much does having two kids, a house, vehicles, and a couple of pets cost? About a million dollars more than most folks will earn in a lifetime, according to a new report from Investopedia.
The new report calculates the cost of some of the basic elements of what has been described as the American dream, including a wedding, a single-family home, a couple of vehicles for transporting the family and getting to and from work, and a yearly vacation. It concludes that it adds up to over four million dollars—$4,442,050, to be exact.
And that’s with only two kids.
How Much Does The Average American Make In A Lifetime?
Income varies based on several factors, including education level, type of employment, and location. Investopedia‘s assessment uses the average lifetime income of a person with a Bachelor’s degree, which works out to $3.3 million for a man and $2.4 million for a woman. This means that a married couple, both holding a four-year degree, can manage the American dream as described above.
Notably, though the estimate includes putting two children through a four-year college, it doesn’t seem to include paying off the parents’ student loans necessary to acquire that degree.
Also, not everyone will attend college or seek a four-year degree. For those who don’t, the Knowles Group found much lower median incomes—$1.85 million for men and $1.1 million for women.
Thus, individuals who don’t have the funding for college already find themselves starting behind, as do those whose circumstances result in a single-income household and those in higher-cost-of-living areas.
The Cost Of Kids Rivals The Cost Of Housing
The report estimates the cost of raising two kids and sending them to college at about $832k, and that may be on the conservative side. Even in 2017, the USDA estimated the cost of raising a child to age 17 to be around $284k, not including college tuition.
Since then, food, childcare, and medical care costs have increased, and childcare and medical care have become harder to access in many areas. DebtWave reported last year that parents say they’re working multiple jobs to afford childcare and that for many families earning less than $50k per year, childcare alone eats up more than 1/3 of the household income.
That $832k estimate is eclipsed only by two other aspects of the American Dream estimate: owning a home, which is estimated at $929k (also conservative for many areas in the U.S.), and retirement funds, which are estimated to need about $1.6 million to finance two adults’ post-employment lives.
And this all still assumes a fairly typical family situation. Add in a chronic illness or a child with a disability that affects parents’ ability to work full-time, and it only becomes more complicated.
How Are Families Affording This?
The cost of living is one reason parents are so stressed that the U.S. Surgeon General says it’s a crisis.
Parents are going into debt to buy food, working second jobs and side hustles, and still coming up short. Some are relying on family for childcare or shifting schedules until kids get into school.
Or, they’re relying more heavily on social safety nets like Medicaid and food assistance. In the U.S., about 18 million families suffered food insecurity during 2023, according to the USDA, including almost 1 in every five households with children.
Families are tightening their belts, buying more generic brands, and cutting back on luxuries and necessities. They’re putting off purchases of large appliances, skipping vacations, and holding off on trading in their vehicles.
More and more families find it untenable, and living costs continue to deter some couples from having kids.
