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The cost of raising a child in America has soared (2018)

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Re: The cost of raising a child in America has soared (2018)

#31

Post by esotericn »

q845712 wrote: post #6

The article points to housing as one of the largest factors of raising a child, and mentions healthcare as well. To my very limited understanding, we calculate inflation from some fixed [per comments below: not entirely fixed] index of consumer goods prices [per comments below: which include some notional aggregate of rent]. Is it possible that instead of saying "The cost of children, housing, healthcare, and educati…

Agree.

Inflation statistics in the UK are almost entirely useless for the same reason.

You cannot use CPI to determine a "real rate of return" because anything you'd actually want to buy is not included.

The basket makes up something daft like 10-20% of my expenditure because, yeah, groceries and electronics and stuff are cheap.

It's a metric that only really has relevance to retirees with homes paid off on a fixed income. Everyone else spends ~40%+ on housing.

Re: The cost of raising a child in America has soared (2018)

#32

Post by esotericn »

namirez wrote: post #28
TuringNYC wrote: post #25

Earlier quoted context omitted.

Depending on where you live, the best public schools can often be accessed only by address, and are quite often limited to homes (not apartments). So yes, depending on where you live, housing costs are a big part of child raising costs.

> and are quite often limited to homes (not apartments) Interesting! I had never heard about this. Do you have a source for it?

I'd imagine that it'll be that only houses exist in the catchment area.

Re: The cost of raising a child in America has soared (2018)

#33

Post by BeetleB »

lawnchair_larry wrote: post #8
gavanwoolery wrote: post #3

I'm having identical twins, classified as high risk. The cost is mind-boggling. I've already paid $7000+ out of pocket, and they have not even been born yet. Costs are mostly related to having to do ultrasounds all the time, and one MRI.

What insurance plan can result in $7k out of pocket for unborn children?

Many high deductible ones, where you are covering multiple people (e.g. a spouse and a kid).

And almost everyone where some medical professional, somewhere in the chain of hospital visits, happened to be out of network - someone you had no idea would be involved. Examples would be where the doctor sent lab results to another doctor for analysis, etc.

Re: The cost of raising a child in America has soared (2018)

#34

Post by [deleted] »

namirez wrote: post #28
TuringNYC wrote: post #25

Earlier quoted context omitted.

Depending on where you live, the best public schools can often be accessed only by address, and are quite often limited to homes (not apartments). So yes, depending on where you live, housing costs are a big part of child raising costs.

> and are quite often limited to homes (not apartments) Interesting! I had never heard about this. Do you have a source for it?

[deleted]

Re: The cost of raising a child in America has soared (2018)

#35

Post by RHSeeger »

TuringNYC wrote: post #21
lanrh1836 wrote: post #18

Earlier quoted context omitted.

If you knew you would be having a baby one year, wouldn’t it make sense to pay a higher premium for a better plan with a low or 0 deductible? Or does the math still not work out?

1. Not all companies give you such options 2. A lot of the cost is in fine print of things not covered, e.g. during our delivery two of the many many medical personnel were out of network and we ended up paying a huge co-pay for that — but it wasn’t like we could have checked ids for each doctor entering the room etc for insurance acceptance. They entered, they did something, they billed.

I feel like a law should be passed saying that, for any patient with a medical networks, any out of network related charges must be signed off on; individually.

Failing that, record yourself telling the hospital staff (or get it in writing) that any out of network charges will not be payed unless expressly signed for ahead of time.

Re: The cost of raising a child in America has soared (2018)

#36

Post by souprock »

Most of this is totally optional. I have a dozen kids, and I'm sure not spending that kind of money per kid.

Births are usually cheap. You can go it alone for $0 or get a midwife for $2000 to $6000. Most of us have health insurance with an out-of-pocket maximum. For example, mine tops out around $11,000. Crazy bills can usually be negotiated, with the hospital very aware that you might just not pay at all.

Child care is sort of free (though an opportunity cost) when done by family. That choice also strengthens the family relationships. It scales well, with older kids assigned to help younger kids.

Housing isn't bad unless you insist on a bedroom for each kid. You need a house for yourself anyway, and most houses have 3 bedrooms. Homeschool to avoid the school district bidding wars.

Food... is a bit of an issue. I go through about $4000 per month, but I'm not living on beans and rice. Being more frugal, $100 per kid per month should be possible for a large family.

Transportation can be mostly avoided.

Clothes become cheap due to hand-me-down policy.

Sports can be cheap. You don't have to sign up for hockey. Play stick ball.

Re: The cost of raising a child in America has soared (2018)

#37

Post by djdidf »

JumpCrisscross wrote: post #13
djdidf wrote: post #12

Earlier quoted context omitted.

It includes rental, not purchasing homes

> It includes rental, not purchasing homes Home prices work their way in through owner-imputed rent, i.e. the rent offset by owning the home. Home purchases include a utilitarian portion (the housing) and a speculative portion (the investment gains). We don’t include the stock market in inflation; we similarly don’t include housing prices beyond the housing utility. Nobody has to purchase a home; everyone needs a pla…

It doesn’t work in practice: the rental supply mostly consists of condos, or college housing. There are few “three bedroom two baths with a one car garage” in good shape.

Re: The cost of raising a child in America has soared (2018)

#38

Post by jelliclesfarm »

souprock wrote: post #36

Most of this is totally optional. I have a dozen kids, and I'm sure not spending that kind of money per kid. Births are usually cheap. You can go it alone for $0 or get a midwife for $2000 to $6000. Most of us have health insurance with an out-of-pocket maximum. For example, mine tops out around $11,000. Crazy bills can usually be negotiated, with the hospital very aware that you might just not pay at all. Child care…

Are you home schooling? In CA, depending on where you live, it costs the state and tax payers 10-14k/annum per child. That’s for 12 years.

Dozen kids would cost about 1.6 million for 12 years of public education.

ETA: I just saw that you mentioned homeschooling.

If it’s ok to ask, how much are your expenses per month and do you own your home?

Re: The cost of raising a child in America has soared (2018)

#39

Post by foxfired »

In January of this year, I was blessed with two beautiful fraternal twins. Twins come out earlier and are expected to be preemies usually. The problem was, they were due on March 15.

We spent two months in the NICU (newborn intensive care unit). The nurses couldn't be more amazing. They took care of those babies like they were their own. And along the way, they took care of us. They made sure nothing was ever missing.

My sons got new pacifiers every time one got dirty. If their covers ever so slightly touch the floor it was thrown into the laundry basket. Their feeding tubes were constantly changed. I was grateful.

My sons were born barely weighing 2 pounds, but they came out of the hospital as plump babies. Then the bill came.

We have insurance. In fact, a very good insurance. The bill for the first born came a couple weeks later and it was in the amount of 1.25 million dollars. (I fainted) We called the insurance. They told us to wait, that the insurance will kick in.

It kicked in and the bill came back rectified with the amount of 250k. The adjusted bill for the second child came shortly after.

To give you an idea what is inside the bill, they moved the babies every couple days to a different section of the nicu. The bill showed that some section charged up to 20k a night. Those pacifiers that fell on the floor each cost 35 to 50 dollars. The formula they provided when we didn't bring breast milk cost hundreds of dollars.

I don't have any credit card debt, I'm frugal when it comes to trivial purchases, I pay for what I can afford. I even have insurance. But then, there is a bill to pay. To this day, we are trying to get the bill to be a reasonable price. And so far, it seems like it's going to happen. We are very hopeful.

Re: The cost of raising a child in America has soared (2018)

#40

Post by roenxi »

q845712 wrote: post #6

The article points to housing as one of the largest factors of raising a child, and mentions healthcare as well. To my very limited understanding, we calculate inflation from some fixed [per comments below: not entirely fixed] index of consumer goods prices [per comments below: which include some notional aggregate of rent]. Is it possible that instead of saying "The cost of children, housing, healthcare, and educati…

There is also a philosophical question of whether the method used makes sense at all. My understanding at the moment is the CPI is being held down by collapsing costs of electronic goods - is that important for a luxury good?

I have ongoing questions about how the weighting process works in general, I don't understand it; it is too complex for me. If they reweight the basket every couple of years to reflect purchases, can the index practically rise that much faster than wage growth? Goods for which there is real competition might disappear from the basket of goods. If they don't reweight, is the index relevant at all?

In terms of real returns, if I have to do something with my personal finances I adjust by the M3 monetary aggregate index (M2 for the Americans) or one of its siblings rather than published inflation numbers. Not only is it simpler it also seems like a more useful metric.

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