Family size and income levels

[Xantippe]

I was just mentioning this on an old thread, but I think it’s worth doing a stand-alone post on:

thepracticalconservative.wordpress.com/2015/10/19/marriage-and-children-in-wedlock-do-cost-100k-per-year-to-have/

The Practical Conservative puts some very handy information in a single post. Some notes:

–median married family income is surprisingly high ($92k a year for 2-child families, which is the most common number of children for a US family)
–there are some interesting relationships between family size and income
–with more than two children, family income is generally lower and lower, with a recovery at 7+ kids
–interestingly, 39% of married families with 8 or more children make $100k a year or more
–as a rule, the number of married couples with each number of children declines sharply after 2 children. So we start with 10,077,382 married couples with two children and end up with only 16,593 families with 8+ children.

The Practical Conservative concludes, “A majority of households having kids in wedlock are not doing it on the cheap and significant pluralities are not doing so at larger family sizes. Definitely something for conservatives to think about when discussing family and marriage issues. Even at high incomes, it’s possible to feel broke raising kids these days because the prices are being set by very high income households. This is a marriage canyon.”

 

[PhiloMed]

Location is everything, and I think many people here tend to be very myopic in their view of cost of living.

$100K salary (pre-tax, not take home) may provide for a very luxurious lifestyle for a family of 5 or more in some areas of the country.

For others, this could mean it is difficult to even cover basic necessities like rent. If one lives in NYC out of work necessity then rent for a 2 bedroom apartment could easily run $3000 or more depending on the area of the city. A gallon of milk can run $5. A car is unnecessary but also unaffordable as parking said car in one’s building can run $400/month or more.

I lived in the rural south for a time while a student. My rent on a two bedroom townhouse with a garage was $450/month and some complained that the cost of living in that town was too high.

My husband and I make very good salaries but to make those salaries we need to live in an area with high property taxes (take the value of your home and divide by 70. That is our tax rate) and more expensive childcare. We have cheaper gas but long commutes unless we want to pay even higher tax rates. The alternative would be to move where we have a much lower cost of living but then we would be unemployed.

Honestly, I think some people just live in a Polly Anna dream world of how much things cost and how much of a financial change one more child will bring to the equation.

 

[Xantippe]

Location is everything, and I think many people here tend to be very myopic in their view of cost of living.

$100K salary (pre-tax, not take home) may provide for a very luxurious lifestyle for a family of 5 or more in some areas of the country.

For others, this could mean it is difficult to even cover basic necessities like rent. If one lives in NYC out of work necessity then rent for a 2 bedroom apartment could easily run $3000 or more depending on the area of the city. A gallon of milk can run $5. A car is unnecessary but also unaffordable as parking said car in one’s building can run $400/month or more.

I lived in the rural south for a time while a student. My rent on a two bedroom townhouse with a garage was $450/month and some complained that the cost of living in that town was too high.

My husband and I make very good salaries but to make those salaries we need to live in an area with high property taxes (take the value of your home and divide by 70. That is our tax rate) and more expensive childcare. We have cheaper gas but long commutes unless we want to pay even higher tax rates. The alternative would be to move where we have a much lower cost of living but then we would be unemployed.

Honestly, I think some people just live in a Polly Anna dream world of how much things cost and how much of a financial change one more child will bring to the equation.

I think part of that comes out of thinking of mom’s labor as “free” and not thinking about opportunity costs. However, if mom were able to make even $30k a year instead of being home, that means that that additional child is costing the family a fairly substantial chunk of money.

I think that explains (at least partly) why the 1 or 2-child family has such a dramatically higher median income than the other families–they are able to much more rapidly resume being 2-income families.

 

[alphawoman]

I haven’t yet checked the stats you cite for accuracy, but for interested parties, this is a link to the relevant US census data from 2014 showing mean and median household income by household size, adjusted and unadjusted for inflation.

census.gov/hhes/www/income/data/historical/families/2014/f08AR.xls

 

[Burt_Macklin]

I think part of that comes out of thinking of mom’s labor as “free” and not thinking about opportunity costs. However, if mom were able to make even $30k a year instead of being home, that means that that additional child is costing the family a fairly substantial chunk of money.

I think that explains (at least partly) why the 1 or 2-child family has such a dramatically higher median income than the other families–they are able to much more rapidly resume being 2-income families.

That and couples with higher education and higher earning potential tend to have smaller families to begin with. I suspect that is the main reason you see such a large drop off for earnings for larger families.

 

[Xantippe]

That and couples with higher education and higher earning potential tend to have smaller families to begin with. I suspect that is the main reason you see such a large drop off for earnings for larger families.

Ah, but then there’s that interesting bounce-back at 7 children ($70k annual income) and 8+ (39% at $100k or above).

My theory on the 8+ family is that it’s divided between very high earners and very low earners, which how you simultaneously have 39% earning $100k or more and a median income of $61k.

There is a category of very high income people with large families and lots of help. The super rich family from Queen of Versailles (great movie, by the way) had 7 children and multiple nannies. And then there are people like Angelina Jolie and her 6 kids and…multiple nannies.

But, yeah, more typically, high education, high income and small families go together like bread, peanut butter and jelly.

 

[Burt_Macklin]

Location is everything, and I think many people here tend to be very myopic in their view of cost of living.

$100K salary (pre-tax, not take home) may provide for a very luxurious lifestyle for a family of 5 or more in some areas of the country.

For others, this could mean it is difficult to even cover basic necessities like rent. If one lives in NYC out of work necessity then rent for a 2 bedroom apartment could easily run $3000 or more depending on the area of the city. A gallon of milk can run $5. A car is unnecessary but also unaffordable as parking said car in one’s building can run $400/month or more.

I lived in the rural south for a time while a student. My rent on a two bedroom townhouse with a garage was $450/month and some complained that the cost of living in that town was too high.

My husband and I make very good salaries but to make those salaries we need to live in an area with high property taxes (take the value of your home and divide by 70. That is our tax rate) and more expensive childcare. We have cheaper gas but long commutes unless we want to pay even higher tax rates. The alternative would be to move where we have a much lower cost of living but then we would be unemployed.

Honestly, I think some people just live in a Polly Anna dream world of how much things cost and how much of a financial change one more child will bring to the equation.

1.4% on property tax seems really low to me. Round these here parts I pay around 3%. Mind you there isn’t any state income taxes to worry about but at least with state income tax there are usually exemptions you can take advantage of. I bought at a very affordable level but what is going to kill me is my house supposedly doubled in value in the past 3 years. Add to that the kids are constantly at the doctor and it is starting to become a real struggle.

 

[PhiloMed]

1.4% on property tax seems really low to me. Round these here parts I pay around 3%. Mind you there isn’t any state income taxes to worry about but at least with state income tax there are usually exemptions you can take advantage of. I bought at a very affordable level but what is going to kill me is my house supposedly doubled in value in the past 3 years. Add to that the kids are constantly at the doctor and it is starting to become a real struggle.

Perhaps it’s all relative, but I pay $20K a year in taxes on what is considered a modest home in our town because it dramatically increased in value while we did nothing to it.

Plus state income tax for which we almost always owe in April.

I think I would take Humanae Vitae more seriously if there was some actual practical advice on how to financially and emotionally manage all of these children one has become so open to having.

 

[Kelfa28]

Where my husband and I live we are barely managing on his income alone…and he makes a decent salary.

There are so many hidden costs that people who don’t have kids just don’t realize are necessary.

Having a van or SUV is essential for a family of more the 2 kids.

Thanks to car seat regulations and space needed for buying groceries and lugging around a double-wide stroller for outdoor activities.

Not to mention car inspection stickers in my state are brutal. They’ve basically designed these inspections to only pass new cars. The older the car, the harder it is to pass inspection.

Rentals in our area are very expensive and could easily cost you the price of a monthly mortgage payment.
The apartments are small and pricey in ok areas to live. They don’t have yards and its quite a walk to get to playgrounds. If you want a bigger apartment for additional children…you’re going to pay more…unless you are willing to sacrifice safety for cost.
Hubby and I aren’t willing to give up safety for cost.

Groceries are very expensive…the more kids the more food to feed them.
Our grocery costs have gone up big time when you have two…soon to be three kids…eating solids.

It’s expensive raising kids.

 

[E_7]

I haven’t yet checked the stats you cite for accuracy, but for interested parties, this is a link to the relevant US census data from 2014 showing mean and median household income by household size, adjusted and unadjusted for inflation.

census.gov/hhes/www/income/data/historical/families/2014/f08AR.xls

I can’t understand that data well, but that led me to look for my State’s stats. I’m in disbelief. Maryland is so expensive but the household median ranges from Potomac’s 175,000 to Baltimore City’s 40,000.

 

[Xantippe]

1.4% on property tax seems really low to me. Round these here parts I pay around 3%. Mind you there isn’t any state income taxes to worry about but at least with state income tax there are usually exemptions you can take advantage of. I bought at a very affordable level but what is going to kill me is my house supposedly doubled in value in the past 3 years. Add to that the kids are constantly at the doctor and it is starting to become a real struggle.

We have around 2% property tax. The state of Texas really sandbags the unwary.

The medical is a very good point, and one that is often ignored in these discussions. You can’t shop at Costco, thrift, or get hand-me-down ER visits…Our family regularly gets medical bills in high three figures/low four figures even with great insurance, and it goes up very proportionately to the size of our family.

 

[marymary1975]

I agree that location has a lot to do here. I am in Massachusetts where cost of life is way higher than on the south, child care is ridiculous and property prices are high. I have a cousin in Texas who owns a huge house for 300k. Where I live that would get you a tiny house or in a bad neighborhood. I know people in the south who pay 300 a month for day care when I pay almost 300 a week (being that cheap). My husband and I have combined a very good income and if we were in the south we could afford to live like millionaires probably but here not that much. We pay for private Catholic school so only with that we have to be mindful of expenses. People look at us and think two lawyers they should be killing it, and when people see that we live just as plain middle class they are like :? But things are very expensive here, child care is crazy and student loans are a pain. We have two kids and is really expensive. My cousin on the other hand makes a little less than me has four kids and is in Texas where they can afford many things you couldn’t in Mass.

 

[Mary_Gail_36]

Ah, but then there’s that interesting bounce-back at 7 children ($70k annual income) and 8+ (39% at $100k or above).

My theory on the 8+ family is that it’s divided between very high earners and very low earners, which how you simultaneously have 39% earning $100k or more and a median income of $61k.

There is a category of very high income people with large families and lots of help. The super rich family from Queen of Versailles (great movie, by the way) had 7 children and multiple nannies. And then there are people like Angelina Jolie and her 6 kids and…multiple nannies.

But, yeah, more typically, high education, high income and small families go together like bread, peanut butter and jelly.

The Jolie Pitt nannies make significantly above average salaries as well:

for 6 kids they spend about 900,000 on nannies and 1,000,000 on tutors!

forbes.com/sites/carolinehoward/2011/04/27/brad-and-angelina-spend-10-million-a-year-on-their-kids-sounds-reasonable/

 

[marymary1975]

Where my husband and I live we are barely managing on his income alone…and he makes a decent salary.

There are so many hidden costs that people who don’t have kids just don’t realize are necessary.

Having a van or SUV is essential for a family of more the 2 kids.

Thanks to car seat regulations and space needed for buying groceries and lugging around a double-wide stroller for outdoor activities.

Not to mention car inspection stickers in my state are brutal. They’ve basically designed these inspections to only pass new cars. The older the car, the harder it is to pass inspection.

Rentals in our area are very expensive and could easily cost you the price of a monthly mortgage payment.
The apartments are small and pricey in ok areas to live. They don’t have yards and its quite a walk to get to playgrounds. If you want a bigger apartment for additional children…you’re going to pay more…unless you are willing to sacrifice safety for cost.
Hubby and I aren’t willing to give up safety for cost.

Groceries are very expensive…the more kids the more food to feed them.
Our grocery costs have gone up big time when you have two…soon to be three kids…eating solids.

It’s expensive raising kids.

I totally hear you Kelfa :hug3: raising kids is expensive.and people.with no kids don’t get it. Husband had to cut down his days of work to three so he can stay with the baby the rest of the week because childcare is so expensive.

 

[Xantippe]

Perhaps it’s all relative, but I pay $20K a year in taxes on what is considered a modest home in our town because it dramatically increased in value while we did nothing to it.

Plus state income tax for which we almost always owe in April.

I think I would take Humanae Vitae more seriously if there was some actual practical advice on how to financially and emotionally manage all of these children one has become so open to having.

I think that American Catholic discussions about large families can get kind of warped because our paradigmatic large family (8+) is actually pretty rare today, and yet it’s still the paradigm.

My in-laws were both born in Poland in the post-war years and were both one of two children, are very devout Catholics, and had two children themselves. I have to note that John Paul II was largely formed as a priest by his experiences with those generations of Polish families. Also, JPII was himself one of only three children, one who died in infancy–so he was raised with only one much older sibling.

 

[Xantippe]

The Jolie Pitt nannies make significantly above average salaries as well:

for 6 kids they spend about 900,000 on nannies and 1,000,000 on tutors!

forbes.com/sites/carolinehoward/2011/04/27/brad-and-angelina-spend-10-million-a-year-on-their-kids-sounds-reasonable/

Wow!

 

[maryjk]

We have around 2% property tax. The state of Texas really sandbags the unwary.

The medical is a very good point, and one that is often ignored in these discussions. You can’t shop at Costco, thrift, or get hand-me-down ER visits…Our family regularly gets medical bills in high three figures/low four figures even with great insurance, and it goes up very proportionately to the size of our family.

That is interesting.

Our health insurance policy, through my husband’s work, treats a family of 3 the same as a family of 8.

So my husband’s co-worker, with 6 children, pays the same as we do, with one child.

 

[Xantippe]

I haven’t yet checked the stats you cite for accuracy, but for interested parties, this is a link to the relevant US census data from 2014 showing mean and median household income by household size, adjusted and unadjusted for inflation.

census.gov/hhes/www/income/data/historical/families/2014/f08AR.xls

If you do find any issues, please report them to the Practical Conservative. She’s hoping to write a book and would probably really appreciate the help.

I should probably mention that from what I’ve read of her stuff, she isn’t anti-big families, but she is pro-honesty with regard to what exactly is entailed in raising a family today, big or little. There’s a lot of unhelpful happy talk out there that young couples believe and are then shocked and disillusioned by the realities. If we’re truthful upfront, young couples will have a better shot at successfully raising their families.

 

[Xantippe]

That is interesting.

Our health insurance policy, through my husband’s work, treats a family of 3 the same as a family of 8.

So my husband’s co-worker, with 6 children, pays the same as we do, with one child.

I don’t have a handle on the exact terms of our policy, but I am (impressionistically) noting that more people in the family = more ER stuff = more medical expenses.

I vaguely remember that (at least a number of years ago) the deductible was calculated per individual.

 

[Burt_Macklin]

We have around 2% property tax. The state of Texas really sandbags the unwary.

The medical is a very good point, and one that is often ignored in these discussions. You can’t shop at Costco, thrift, or get hand-me-down ER visits…Our family regularly gets medical bills in high three figures/low four figures even with great insurance, and it goes up very proportionately to the size of our family.

Medical is my biggest expense every year. Like you said each child will only need a small increase in groceries and they can share hand-me-downs, but they will each need individual medical care. And it isn’t as if discount health care is something you can or even should seek out.

When I first started working I had a medical plan that had a simple 2000 family deductible with everything covered at 100% after that. Plus my employer was covering the monthly premium at something like 80%. Those were the good old days; I’ve had to come back to reality since then. Last year I was left owing around 8000 after a surgery. I set up a payment plan and never missed a payment but the hospital still turned us over to a collection agency a few months later. Now it’s every month with a thousand here a few hundred here.