Almost a quarter of millennials and Gen Z adults without children say they plan to stay that way. The reason? Money.
About 23% of these adults, from 18 to 43 years of age, said that their financial motivation for not having children was twofold: valuing the financial freedom of not having children, as well as worrying about their ability. foot the bill for raising children, according to a new survey from MassMutual.
The findings are annual US birth rates slow down to a record. Other research has also shown how financial factors influence the decision to start a family. In a July survey, Pew found that Americans under 50 without children said they chose to have children for both lifestyle and financial reasons, such as wanting to save for the future or have more time for hobbies and interests.
And of course, it’s more expensive to raise a child, with one study finding parents spend more $240,000 per child from birth to age 18. That’s a 20% increase from 2016.
“Raising a family is a financial commitment. It always has been,” Paul LaPiana, certified financial planner and head of brand, product distribution and affiliates with MassMutual, told CBS MoneyWatch. “We are all faced with choices every day, and there is room for improvement when it comes to balancing decisions about immediate gratification with long-term happiness and financial security.”
Because MassMutual has not previously asked younger generations about their reasons for not having children, the study does not explain whether money is a bigger factor today in deciding whether to have a family than it was in previous generations.
But the Pew study found that the older generation – those over 50 – are most likely to say they never had children because it just didn’t happen, like never meeting the right partner. In contrast, people under 50 are more likely to cite financial, lifestyle or ethical issues, such as concerns about raising children due to environmental issues.
Parents and financial worries
Younger generations may have good reason to be wary of the financial impact of starting a family: Money worries are the biggest source of anxiety for parents of 18-year-olds, MassMutual found.
“It’s hard to find parents without financial stress,” LaPiana said. “It’s almost a ‘right of entry’ to parenthood. Markets and economic cycles come and go, and there are always factors that impact financial stress on parents.”
The insurance company’s study, which surveyed 1,000 adults in July, found that 51% of parents said they were worried about not having enough money to support their families. And about 4 in 10 parents of 18-year-olds say having children has a negative impact on their personal finances.
The cost of raising a child, with an average family spend $700 a month in childcare, has been asked for advice from two presidential candidates to bolster the Federal Child Tax Credit. Vice President Kamala Harris, the Democratic candidate, is propose a tax credit of $6,000 for parents of babies and also bring back the Child Tax Credit that was expanded during the pandemic. Meanwhile, the campaign of former President Donald Trump has floating ideas of the $5,000 Child Tax Credit.
“It’s important to respect each other’s journey as we all navigate our financial futures and make decisions that align with our personal values ​​and aspirations,” LaPiana said. “My advice? Control what you can control. Monitor your financial life and manage it where you can. Make smart buying decisions. And invest in your future.”
