The Cost of Middle-Class Families

Why starting a family in the US is unobtainable to the middle class, and what working people really mean when they say they can’t afford kids.

My husband and I both work full time, and combined we make $40/hour (him $21, myself $19). This seems like it should be an easily livable wage doesn’t it? And like we should absolutely be able to afford the American dream right? A house and 2 kids. Well, we have the house and 1 kid. Let’s break it down shall we?

$40/hour x 40 hours x 52 weeks = $83,200

Our basic health and dental insurance plan is paid through my husband’s employer, to the tune of $400/month for a family of 3. After deducting health insurance, Federal & State tax, Medicare & SS, our take-home pay is $59,278.

We have an incredibly affordable mortgage of $1,200/month. We purchased our 150 year old home (with no A/C, poor heating, and half of the windows are unusable) in a low-tax area for $195,000 at 2.3% interest. Living in a low-tax area means we pay in other ways: we need to pay for our garbage pickup which runs $450/year. We have a well so we do not pay for water. Mortgage plus garbage pickup costs $14,850/year, bringing our budget down to $44,428.

For groceries, let's say we only spend $787/month. This is $100 in diapers, $50 on toiletries & non-food items, and $7/day per person for food. This comes out to $9,444/year, bringing us down to $34,984.

We have an auto loan. We purchased a 5 year old Ecofuel mini van in good shape, with 32% down, 760 credit score (which got me 7% interest rate at the time) and a 36 month plan to reduce total interest paid, to the tune of $380/month. Before anyone argues this is an unnecessary purchase, I work as a nanny and needed a bigger vehicle to drive around the number of kids I care for. No, it does not qualify as a business expense. Anyway, this adds up to $4,560/year, and our budget is at $30,424

Let’s run through our other non-negotiable expenses:

Electricity - $260/month - $3,120/year

Car Insurance - $90/month - $1080/year

Phone Bill - $90/month - $1080/year

Internet - $90/month - $1080/year

Life Insurance - $78/month - $936/year

Gas - $100/month - $1200/ year (assuming we strictly drive to and from work, only stopping at places along this route)

Pet Food - $100/month - $1200/year

General Savings Account - $100/month - $1200/year (abysmal savings, but realistic)

Child Savings Account - $100/month - $1200/year

After all that, we are left with $18,328

With that number in mind, here is a short list of what is not included in this bare-bones budget:

-credit card debt

-car maintenance, repairs, tires, or license plate renewals

-home maintenance or repairs

-medical emergencies or copays

-eating out or eating much protein at all

-toys or activities for our child

-subscription services, including news sources

-vet visits

-birthday/Christmas/wedding/baby shower/anniversary gifts

-clothing

-furniture

-charitable donations

-family vacations

-retirement fund

$18,000 seems like it should be enough to cover those, right?

The one single thing keeping us afloat is that we do not have to pay for childcare. I am a nanny and my child comes with me to work. The average cost of childcare for one child in my county (according to a PDF from 2019) is $200/week. The only childcare in my area that states pricing upfront is the local YMCA, to the tune of $280/week. This comes out to $10,400-$14,560 per year.

If I needed to change jobs and had to send my child to daycare, nearly all of our money after absolutely necessary expenses would be gone.

If I got pregnant again and had a normal, uninteresting pregnancy and delivery, our out-of-pocket cost with United Healthcare insurance would be $10,000. There is no government-subsidized paid maternity leave in our country, so I need to have enough saved up to cover expenses while I am unemployed. I will not be presenting arguments about taking less than 3 months maternity leave, because quite frankly anything less is barbaric and unacceptable in a developed country. If I pay for my half of the mortgage, my auto loan, and nothing else, for 3 months off I need $2,880 set aside. While paying all the other non-negotiables (forgoing savings accounts and gas for my car) my husband will still have to work overtime to afford the added box of newborn diapers, and pray nothing unexpected comes up. We will have no family outings or easy takeout meals, no new baby clothes or streaming services to entertain us during the long newborn nights. So, that’s $12,880 saved up to have a baby, and 3 months of no income on my part. And I better be able to manage nannying with 2 young kids in tow, because otherwise I’ll be looking at paying at least $500/week in childcare, or $26,000/year. Woah look, that’s almost the entirety of my take-home pay!

When people say they can’t afford kids, this is what they mean. They can’t afford $10,000 to give birth, they can’t afford 3 months without pay, and they certainly can’t afford $15,000/year or more on childcare.

“If childcare is so expensive, just stay home then.”

Let’s pretend my husband magically gets a raise or finds a higher paying job for $30/hour. $62,400/year, with somewhere around $48,000 take-home. If we stop adding to any savings accounts, add an extra $100/month in diapers, and he pays for everything else, that leaves $8,402 to cover every other expense we could have in the year. Keep in mind, this is still assuming we spend as little as possible on groceries and non-food products. That’s $700/month to cover all the possibilities listed further above. And that’s if he manages to find a job paying $30/hour. How many jobs do you know that pay $30/hour without a higher degree of education or years of training in a trade?

If he only gets up to $25/hour, we cannot afford to stay in our house.

We played the game. We followed all the rules. We have decent paying jobs, we work hard, we live well within our means, we have minimal debt and no student loans. And still the system is stacked against us expanding our family.

I wanted to work a regular job, own a home, and have some kids. Maybe even stay home as a full-time caregiver to my kids while my husband provides. Those goals should be uninteresting, non-controversial, and accessible. But in the greatest country in the world, you cannot afford a small outdated home and 2 kids on $40/hour. In the greatest country in the world, having a family is a luxury. Do you know how messed up that is?

There is no single president or policy to blame for this. This is the result of multiple factors, notably for-profit healthcare and vapid individualism, and will take multiple changes economically and culturally to solve.

So as we continue to hear people lecture about saving babies and the destruction of traditional family values, look for who is trying to make parenthood and child-rearing affordable, and who is blaming the working class for being on government subsidy programs.

2019 Average Childcare Rates of SE WI https://www.4cfc.org/wp-content/uploads/2019/12/Avg-Child-Care-Rates.pdf