Be Honest in Estimating Future Income Expenditures when Figuring how many Children you can Afford

When deciding how many children to have you will need to consider a wide range of things, both immediate and long-term. First and foremost, you need to take an honest look at your earning potential. Can you afford as many children as you would like? Do you have a realistic idea of how much it costs to raise a child? A good site to utilize is babycenter.com, which takes your geographic location into account.

Determining your household income is of paramount importance. The babycenter site asks your household income to determine its initial calculation, so you will need to estimate how much you and your partner will earn when your first child is born. How much will you be earning when that child graduates from high school? Do some research about your chosen career field and employer and try to determine the average rates of promotion and salary increases, then do the same for your partner. Perhaps you will find that your expected future income can support as many children as you desire, or perhaps you will find that you can only afford to have a few children.

It is important to calculate earning potential for both yourself and your partner. Even though one may earn more today, the other may actually be predicted to earn more when the child(ren) are older. For example, one partner may be a low-paid graduate student or part-time employee today, but could reasonably earn much more income in a few years after he or she lands a full-time position. But you must be realistic: Do not calculate for the best-case scenario. You should instead calculate a worst-case scenario and an average-case scenario. Many families can run into financial trouble if basing decisions on best-case employment and earnings scenarios.

Now that you have an idea of your current and future revenue, what of expenditures?  A first consideration involves childcare costs. After maternity and paternity leaves are exhausted, who goes back to work? If one partner is expected to stay home with the children, you will need to do the math to determine how much income will be foregone. Can you afford to have a partner stay home with children while they are infants? Until they enter full-time schooling? Forever? Use a computer spreadsheet program to calculate various options.

If both parents are returning to work, how much does childcare cost, and what are your local options? Some childcare facilities may have good prices but poor hours, or vice versa. Which childcare facilities operate conveniently based on your working schedule or that of your partner? Many daycares will charge fees for picking up a child late, so be sure that you are good with time management. Additionally, many daycares also do not allow children to be dropped off after a certain time, so be vigilant about knowing the daycare rules and regulations – it could be a very costly and/or inconvenient lapse of memory!

After daycare you must determine how to school your children. Does your town have good schools? Are the public schools good? If not, how expensive are private schools, and do they offer transportation? 

If you plan to have multiple children you will need to see if the schedules at different schools coincide conveniently. For example, if you want to have children two years apart you will have a two years where one child might be going to junior high while the younger is still in elementary. Do those two campuses let out at the same or similar times? If not you will have to make arrangements for one of the children to be picked up by a daycare center or private babysitter, an additional expenditure.

Finally, college! What are your expectations regarding your children and attending college? What are your expectations regarding paying for college? This may be the single biggest expenditure of child-rearing. If you plan to pay for college tuition you may not be able to afford many children without taking out hefty loans. If you expect your children to pay their own way or take out their own student loans (without you as a co-signer, of course) you can afford more offspring.

Money aside, what are your age and health considerations? Will you be young enough to comfortably have multiple children spaced a decent distance apart, or will you feel rushed to have them right after another? If you hope to wait several years to save up money for inevitable childcare costs, will you feel comfortable helping your kids pay for college even as you approach retirement? 

Being proactive is of the utmost importance, and there are programs to help with figuring long-term costs. Some states allow you to purchase college credit-hours at current tuition rates years in advance, saving you the hassle of guesstimating inflation eighteen to twenty years in the future! An example of this is the Texas Tuition Promise Fund, which allows you to buy credit-hours at public Texas colleges and universities and apply them to beneficiaries later on. The Internet will be a powerful tool in helping determine how many children you can afford.