We've all heard of trophy husbands and trophy wives. But what on earth is a trophy kid? Here's how one expecting parent explained the term trophy kids to me at the playground one day.
A trophy kid is what's known as the 4th kid or greater in a family. Because raising kids is so expensive, especially in the coastal cities, having a 4th kid is one way the rich signal to society how rich they really are.
Not only do these parents have the fertility to have multiple children, but they also have the financial means to provide for additional kids. A family of six requires a bigger house, bigger travel budgets, bigger tuition budgets, hired help, and more.
A trophy kid is essentially a status signal that you have the time, money, and resources to have such a big family.
It's Not Easy Having Multiple Kids
As a couple who took almost three years to have one kid, I view having four or more kids as a miracle. Think about all the things that have to go right for any couple to have four kids today.
- A couple has to meet early enough in their lives to build a loving and trusting relationship. To have four children will likely take at least 10 years from the time a couple first meets.
- A couple needs to be healthy enough to conceive and birth four children. Things such as endometriosis, ovarian cysts, low sperm motility, irregular cycles, ectopic pregnancy, spontaneous miscarriages and more can and will affect the process of birthing a child.
- A couple needs to have a high enough level of happiness and energy after each kid to go through the process three or more times.
- A couple needs to have enough financial means to support a growing family. A recession or a layoff could easily derail the child birthing process.
- A couple will need to come to terms that an early retirement for both parents is highly unlikely.
Sure, a man can have four or more kids quicker by having multiple partners. But that doesn't negate his responsibility of caring for each child. I'm unfamiliar with deadbeat dads.
A woman would still have to spend at minimum five years to have four children with multiple partners, unless of course she has twins or more.
IUI and IVF are not guarantees, but may help after the discovery of fertility issues as well.
American Household Size Over Time
Let's look at the American household size over time according to the Pew Research Center.
In 1976, 40% of mothers ages 40 to 44 had four or more children. 25% had three children, and 24% had two children. Only 11% of mothers at the end of their childbearing years had had only one child.
In 2014, the once-dominant four-child family has been replaced by the two-child family. 41% of moms at the end of their childbearing years now report having two kids, while just 14% have four or more children.
Meanwhile, the share of mothers at the end of their childbearing years who have one child had doubled – from 11% to 22%. Interestingly, the percentage of mothers who have three children stayed constant at about 24%.
Most of the change in family size occurred from 1976 to the mid-1990s as more professional opportunities opened up to women. Since the mid-1990s, family sizes have stayed relatively stable.
There is also an inverse correlation with the number of kids a mother births and her educational attainment. Only 10% of mothers with a bachelor's degree have four or more kids.
Bottom line: having four or more kids today is a rarity, especially in high cost of living areas. Four years of private university tuition plus room and board is estimated to cost over $750,000 by 2036! The cost to raise multiple kids in a big city could reach $1 million a year. How many people have that type of income? Less than 0.1%!
The Cost To Raise A Trophy Kid (4th Kid)
Now that we have some background on today's family sizes, let's look at the cost of raising four children.
I first started with an annual household income of $500,000 to see if raising four kids was possible in an expensive city like San Francisco or New York on an average budget. I'm sad to report it's impossible.
I then raised the household income to $650,000 to see whether impossible was now possible. Nope, still impossible. It was only after I raised the household income to $800,000 that I could extrapolate how a couple might reasonably afford to raise four kids.
See the sample trophy kids budget below.
Raising Trophy Kids Is Expensive In A Big City
As expected, the biggest costs revolve around the raising of four children. Each kid attends private school at an average of $40,000 each + $2,000 a year in school fundraiser donations. Few families with enough means to have four or more children would dare send their kids to public school. After all, one of the purposes some people choose to have trophy kids is to convey status.
Then there's the live-in au pair, which is a necessity for raising four kids if both parents work. The au pair route is the cheaper route because the family is providing lodging and food. The expensive route is a professional nanny who lives independently, but costs anywhere from $7,000 – $12,000 a month for 40 hours a week.
To house seven people comfortably would also require a massive, six-bedroom, four bathroom house. The parents live in one room, the au pair lives in one room, two kids live in their own rooms, and the youngest two share a room. The last bedroom could be used for guests, an office, storage, a play space, or to separate the youngest children.
As for cost, six-bedroom, 6,000+ square foot homes in San Francisco easily cost $6 – $15 million dollars. That makes this couple's $3.2 million home a relative bargain.
Don't Forget To Save For 529 Plans And Retirement
On the positive side, this couple is putting away the maximum $38,000 a year in their 401(k)s for 2019 while also contributing $20,400 a year to their kids' 529 college savings plan. The couple is also paying down roughly $36,000 a year in property principal.
Total savings when adding up their 401(k) contributions, 529 plan contributions, and principal pay down equates to roughly $94,400 a year, or 11.8% of gross salary.
An 11.8% savings rate is about double the national savings average, but this family feels the strain of living paycheck-to-paycheck. One unanticipated emergency will force the couple to draw from principal or drastically cut back on vacation and charity expenses, and potentially more.
An $800,000 a year household income is the bare minimum to raise four children in an HCOLA. (HCOLA = high cost of living area) It is only when this couple starts making at least $1 million a year that the strains of having a trophy kid will begin to loosen.
But What About Budgeting For College Bribery?
Even if this household earns $1 million a year, after tax, they will only take home roughly $120,000 a year extra in cash.
We learned from the college admissions scandal that the average bribe was $500,000. Thus, this $1 million a year earning family would have to save aggressively for 17 years to afford to offer a $500,000 bribe per child. Even then, there's no guarantee this would be sufficient to buy their kids' way into a top private school.
The only way to really improve their kids' college admissions odds is to legally donate $5 million or more per child to a school's campus renovation project or some type of fundraising. That's what all the really wealthy people are doing for their children nowadays.
Unfortunately, this family can only come up with $2 million after 17 years for their four children, let alone $5 million for one.
For families to participate in legal bribery while having trophy kids requires a household net worth of at least $50 million and more like $100+ million. Once you're at this level, private grade schools and colleges will start welcoming you with open arms.
Good thing public schools rock and the internet is making learning tuition-free for all.
Everybody Deserves A Trophy
If a mom can birth four or more kids, that's amazing. She deserves a trophy! If parents can comfortably support four or more kids, then I think they too deserve trophies. And as for trophy kids, they deserves trophies as well because all kids are precious.
My wife and I are ecstatic with two kids. We both have 1 sister, so living in a family of four is what we are used to. Four people can comfortably sit in a car or take up a four-seat row on an airplane. There are also four sides to a common table, which makes dining out easier.
I've spent the last 20 years aggressively saving and investing to raise a family in San Francisco on investment income. Alas, a family of four is all we can comfortably afford because neither my wife or I want to go back to work to boost our wealth. Further, our fertility is almost near its end.
If we get a second wind and a surprise financial windfall, we'll definitely consider adopting or fostering another child. I would love to have more children. But in the meantime, bless all the children in this world.
For us, two kids is all we can comfortable take care of. We are older parents who are also focused on minimalism and early retirement. We've found a good balance to maintain the lifestyle we desire. Everybody has to find their own comfortable balance as well.
Loading ... Loading ...Recommendation For All Parents
If there's one thing the pandemic has taught us, it's that life is not guaranteed. We must do everything we can to protect our children while they are still dependents.
As a result, please get life insurance whether you have 1 child or a bunch of amazing trophy kids. Not only should you get enough life insurance to cover your liabilities, your life insurance term should last long enough to get them through college.
The best place to get life insurance is through Policygenius, a free-to-use insurance marketplace. Policygenius will help you find the best plan for the lowest price tailored to your needs. Thanks to their partnerships with top insurance carriers, you can get free, no-obligation quotes.
Let multiple qualified life insurance carriers compete for your business by applying on Policygenius. It's so easy and efficient to get the best rates!
After eight years of owning life insurance, my wife decided to check on Policygenius for free to see if should could do better. Low and behold, my wife was able to double her life insurance coverage for less money. All this time, she thought she was getting the best deal with her existing carrier. Thanks to Policygenius, she was able to switch to a better policy while saving money.
If you don't have life insurance, please get life insurance before you need to. Life insurance gets more expensive the older you get. If you get sick, depending on the severity of your sickness, you might not be able to qualify.
Readers, anybody have four or more children? If so, where do you live and how much does caring for such a large family cost? When did you guys start having kids and how did you make everything work? Is having lots of children one of the biggest flexes couples can make today?
We hope to have 3-4 children. We have the 5-6 bedroom house in a top public school district. Currently trying to conceive our first child at <300K income which feels like it will be tight, especially as our home needs remodeling and we like to travel and eat out often.
We expect to be at 300-400K income in a year which I expect will be comfortable long-term. I've budgeted for an au pair, public school, vacations, and kids' activities and I think we will feel lucky at that level! Your numbers may be reasonable for SF but in the NYC suburbs I think 400K is plenty for a luxurious life.
Of course, actually having the baby may change my opinions which are all just spreadsheets…
Good luck! And great planning.
Yes, best to go through one first and see how it goes :) I’ve been a stay at home father since 2017, and it is by far the hardest job I’ve ever had.
It’s harder than working in investment banking or writing, editing, and marketing my new upcoming book that I think you will love.
Best of luck! Kids are amazing.
First, Life and the love that comes with it is the greatest gift you can give. Second, sacrifice is another big gift you give to your children just by having them. Whether they are trophy kids or not, I’d rather have 3 or 4 children (and their grandchildren) by my side when I die than to have $3 or 4 million. The gambler is right: the best you can hope for really is to die in your sleep.
Honestly I think the budget assessments here are a little absurd. Yes, in a perfect world all these items would be nice to have, but thousands of families make do with far less and while they might not raise quite as financially successful kids, they “survive” so to speak.
My parents raised me and my three siblings (one of whom is still only 12) on right around $100k in expensive Southern California. Yes, we went to public school, yes, we never traveled internationally, but they raised us in such a way to be self-sufficient and now I am on a path to being more well-off than my parents were. Perhaps the Bay area is a bit of a bubble, but saying it’s impossible to raise 4 kids on $500k is a tad absurd.
Perhaps they raised you in a different time?
Where did you end up going to college and how much did it cost?
what is your budget for raising your kids now and how many do you have?
thx
Do you actually know any SF families with 4th trophy kids or is this all speculative? We spent 20+ years in the Bay Area/SF attending prestigious schools, working in tech and having kids (3), and know multiple families personally who have crazy, astronomical levels of wealths (tens of millions +), mostly IPOs/acquisitions. None of those folks have 4 kids, and I am pretty sure that for those families with 3, their budget looks nothing like that, ie, their kids are in public school, no nannies or au pairs etc. The biggest social signaler for these families is one parent no longer works and/or giant custom house or second house.
We do know 2 families with 4 kids and while they live in California and are comfortable, their income and budget is nothing near to your example.
Is this more an east coast thing?
Yep, two of my tennis buddies have four kids. One got a divorce, another makes a lot and has a full-time nanny.
One has to trust oneself and believes that any number of kid(s), including 0 kid, is the right and perfect number for one’s situation… and be happy!
It is no surprise that your comments would be flooded with parents of 4 and more children who are claiming that they don’t spend as much as you have outlined here, it is truly cheap and easy to have 4 or more kids, try homeschooling, etc. I live in the Southeast where, especially in more conservative areas, more kids is certainly a status symbol. I have never heard someone who had three or more kids admit that it is a financial or psychological burden for them. And yet here I am with two kids and I will willingly admit that although I would never make a different decision, having our second kid was a big leap financially and otherwise. So either there’s something decidedly different about moving from one to two kids that doesn’t happen after you move from 2 to 3 or 3 to 4, or people with more children are bluffing about their circumstances, or at least have different standards for “comfortable,” etc. I think that most people choose to have more children because it’s a value they hold (religion, etc.) or it is emotionally satisfying for them, and the idea of admitting that there are downsides to this is beyond their ability, because it was a values decision and not a rational one. You mentioned in your post that you would have to be happy enough after three kids to want a fourth. I honestly don’t think this is the case; I have met plenty of unhappy people who still had a psychological drive to have a large family. If I ask those people of having an additional child made them happier, of course they would say yes!
I struggled mightily with whether or not to have a third child because I do believe I would like having one. But I had to take into consideration my absolutely worst days with two kids at home, in addition to adding another 5 years of being a part-time working, stay-at-home parent. everyone I know who has more than two kids reassured me that it’s a blast and totally worth it. But the science seems to indicate that adding more kids, until you exceed four, actually decreases your happiness. The number 3 is actually the most unhappy number for families. With all that in mind, we made a calculated decision to stop at 2. I absolutely don’t resent anyone’s choice to have one or more kids. But I do resent how difficult it is to find anyone who will talk honestly about the difficulty of choosing your family size. I have been to a dinner where a mom of one expressed insecurities about having it easy as a parent, only to have those personal insecurities confirmed by a mother of three who then spent the next ten minutes telling us about all of the adventures she had with her three children, and how having a large family did not stop her from doing everything she wanted in life. in short, she did exactly what all the posters in this comment thread did, but she did it to the face of somebody who is expressing honest vulnerability. I could not help but think to myself, does the woman with three kids feel the need to share all of this to justify her choice to have a third? If she was truly satisfied with her choice to have a third, would she need so much external validation? I really searched myself and realize that having a third would simply be for the external validation, as well as a desire to have a big family as I approached old age. Those were not justifiable reasons to add another human to this world. The only time I regret my decision is if I think about something bad happening to one of my children. I would not want them to grow up without a sibling. For this reason we have not opted for any sort of permanent birth control, but I would probably consider it after 40.
Thanks for your thoughts.
One of the biggest secrets to having lots of gets, especially in an expensive city, is being able to afford full-time help. But folks don’t openly admit this.
Hopefully my budget chart and post can help shed light on this.
Of course if you have two nannies and a chef, it’s easier to raise children!
“I have never heard someone who had three or more kids admit that it is a financial or psychological burden for them.”
My wife and I have four children, and it is very much a financial and psychological burden — there’s no question about it. And it’s more of a burden than it would be to raise zero, one, two, or three children. But we are very happy to have four children, and many things in life that are worthwhile are not easy.
However, I would like to point out that the additional financial and psychological burden that comes with each child is not the same as the one before. For example, the difference in difficulty and expense between zero children and one child is greater than the difference in difficulty and expense between one child and two children. Each additional child adds difficulty and expense, but not as much difficulty and expense as was added by the previous child. At least that has been our experience; your mileage may vary.
I am not questioning your choices, just giving you my perspective, since it sounds like maybe it’s a perspective that you haven’t often heard.
I married when I was 38. Of course, it helps that my wife is almost 10 years younger than me when we got married. I’m 45 now and we are expecting baby #4 this year. My wife and I are both working professionals in the IT field making average IT salaries. It’s not as complicated as you all make it seem. The mind can make you crazy when you think too much about these things. The trophy goes to my wife who can make all these babies and still carry a very stressful IT career.
I have never heard of a trophy kid and the fact (opinion) that a 4th child brings some sort of status symbol. But, I guess you never know with some people…
My wife and I have been blessed with 4 kids and it is expensive raising them. Well worth it though! Glad that I’m not on the east or west coast doing so!
Sam: You missed the obvious solution – you move to Mill Valley where even rich people send their kids to public school (not all but many). You also can get a nice 5 bedroom house (convertible to six) of 4,000 square feet for $3-$4 million.
I think the budget is a little off. They are expected to provide the au pair with a car and Christmas bonus and often take her/him on vacation to provide childcare so those categories are likely too low. Many private school systems offer sibling discounts so that may offset the missing costs to still make it possible on a $800k budget, although if this family is unfamiliar with the concept of enough it likely won’t be.
My wife and I have four children. We believe in being open to the gift of life, and we have been blessed with fertility and health. It never occurred to me that someone might look at our fourth child as a “trophy” to show how rich we are.
We are financially comfortable, but certainly not rich. We have a paid-off house, two reliable vehicles (though the newest one is 11 years old), and everything that we need, but not a lot of money to spend on luxuries. And there are some cracks in the foundation of our finances — mainly far too small an emergency fund, very little money available to save each month (other than for retirement), and almost complete reliance on just one source of income (my job).
Having four children is expensive, but it’s less than four times as expensive as one child, and less than twice as expensive as two children.
The 4th kid as a trophy kid seems to be an expensive city, Type A phenomenon. I first heard about it among banking/ master of the universe types. I live in NYC where private school runs $50k annually now, so that 4th kid brings you over $200k just for school. Our youngest enters college this fall, so we are empty-nesters. We also left our type A office jobs for working virtually, and we watch our Type A friends with detached bemusement. We also have taken a couple of trips to the Philippines where we sponsor several children, and visiting their households keeps you grounded really fast.
Can you share how many kids you have and how you’re budgeting for them? thanks
We have two daughters, age 18 and 24 so they’re self-sufficient. I have been consulting for 11 years, but my husband had a traditional W2 till just 3 years ago, so for practically all of their formative years we had a traditional household budget. We did the public school route so even in NYC we have been able to live the life we want for ~$200k — not cheap but still not $800k.
Cool. What are your two daughters doing with their lives and are you satisfied with where they went to university and work? I’m assuming we will generally be pro whatever we ended up doing. Just wondering if you think their lives would be different if they went the expensive private school route in NYC.
thx!
I have 8 children.
My husband and I met while both attending the University of Virginia. We got married a year after graduation (Engineering degree for me and a Masters in Education for him). Our first child was born a year and a half later.
We knew we wanted a big family, so we moved back to New Jersey to be closer to extended family. I became a stay at home mom that tutored math on the side while my husband was a Junior High science teacher. We made no more than $45,000 while living in New Jersey.
When I became pregnant with child number 6, we made the decision to move to a lower cost of living area. Not because we couldn’t financially survive with 6 children in New Jersey, but because we wanted more margin in all areas of our lives and living in New Jersey made that difficult.
After moving to Indiana, we had 2 more children. My 8 children were all born one at a time and born within a 10 year time period. We homeschool them, so private school and the related costs was not an option.
We lived very frugally in Indiana and our annual income never exceeded $35,000. Selling our home in New Jersey left us with a 40% down payment on a 2600 square foot home in Indiana. It was 5 bedroom, 2 bath. The children all slept in 2 bedrooms (3 girls in one, 5 boys in another) which left the other two bedrooms (which were upstairs and neither heated nor cooled) open for a playroom and library/school room. We also had 3 acres so they spent massive amounts of time outside.
After our youngest was born, we started a small business and included all of the children. The children all get paid a salary and all invest in retirement accounts. Our business is farm-based (Goat Milk Stuff) and as it grew we outgrew our 3 acres so we bought a 36 acre property and built a new house and multiple buildings for the farm/business. My new house is huge, but it is designed to be a bed and breakfast after the children all move out, which is why it is so big.
While our tax statements show we make more, most of it is reinvested in the business and we live on about 40,000 per year (after taxes and investment in retirement accounts).
When the children turn 16, they start taking a few classes at our local community college. The college regularly runs specials where high school aged children can take multiple classes for $50 each class.
Currently the children (now aged 12 – 22) all want to work in our business, so none of them are going after a four-year degree, but are taking classes to help them be more successful in their roles within the business. It is our plan for the business to be completely debt free by the time my husband turns 50 (2 more years to go).
At that point, the children (who are already very active in the business, obviously) will take an even more active role and take over the hiring/firing of employees. It is our plan to slowly pass more and more of the responsibilities that we don’t enjoy to them while continuing to work on the parts of the business we do enjoy.
For example, my husband just bought a commercial chainsaw (an upgrade from his regular one) and is taking down the hundreds of dead ash trees (thanks Emerald Ash borer) in our woods to save us the thousands of dollars it would cost to pay somebody else to do it. This is work he enjoys as he is out in the woods instead of behind his computer. Does this count as early retirement? I’m not going to enter that debate, but it works for us.
My oldest is now married with a child of her own. She and her husband both work in our business and would like to raise their children in the business the way my daughter was.
I would like to echo some of the previous commenters that having children should never be about money (whether boasting about having a lot or worrying about not having enough). Having a large family is one of the hardest and most rewarding things I’ve ever done in my life. My children are each other’s best friends. They laugh together, fight together, and build many memories together.
It was a huge financial sacrifice for many, many years. We lived incredibly frugally (there were years our family of ten lived on under $20,000 per year while investing/saving the rest).
But the rewards of investing in a large family have compounded and I don’t regret any of it.
For me, adding child number 3 was the hardest (when you outgrow having a hand for each of them). After that, adding each child got a lot easier. My children are also spaced closely together (8 in 10 years). This was intentional (and not because I was against birth control) as I wanted them all to be close enough in age to be able to relate to each other and share a lot of the same memories.
The money always comes somehow. If you’re smart enough to be reading this blog and thinking or working towards early retirement, you’re smart enough to make the finances work if you’re willing to think outside the box and problem solve. Hard work makes up for a lot bills.
Many people who are interested in the FIRE concept are encouraged to start a side hustle. I always strongly recommend that people consider including their children in that side hustle. Children learn incredible skills if they are involved from the beginning of a business. From the time they are about 6 or 7 my children understand depreciating vs appreciating assets. They understand a Profit & Loss statement by the time they’re 9 or 10. Compounding interest and taxes are all taught as they watch their own check stubs and track and forecast their retirement savings.
Having eight children is unusual in today’s society. But I’ll never regret. If you ask each of my children how many kids they’d like to have themselves, depending on the child, they will tell you between 6 and 10. That shows me that my children don’t regret our family size either.
If kids should never be about money, why do people say that kids are so expensive? Some would think raising 8 kids on $20,000 a year might be cruel. The Federal Poverty Limit income for 8 kids is $42,000 a year.
As someone with 8 kids who doesn’t think money should be taken into consideration and who started a business to help put their kids to work……. do you think maybe it’s a little extreme and a little selfish? Why not consider adopting the 5th, 6th, 7th, or 8th kid?
Raising 8 kids on $20K during certain years would be “cruel” if they were not properly fed, clothed, housed. Other than that, why would it be cruel?
“why do people say that kids are so expensive? ”
Guess it depends on what you want to spend money on. All of my kids were at one point on travel soccer teams ($2K per year) and at one point 3 were at the same time ($6k per year) at the same time another was working toward her black belt ($2K per year). I also like to take the family out to dinner once a week or so to try new types and styles of cuisine, and we all enjoy seafood and so I cook a lot of shrimp, crab legs, fish, which are all expensive. So there’s another $15K+ a year or so.
As they got of driving age, my wife zeroed in on cars having the very best crash test ratings both from gov’t required testing and from the IIHS (offset crash). And how could I argue with her logic? So ended up buying an $18K car for the older 2 to share. Then when the oldest went to college I bought another $18K car (same model) for the next 2 to share. Then when the 2nd oldest went to college (last year) bought another of that same car for $18K for the next two to share. In the last 4 years I’ve bought 3 new cars for the kids to share and drive. I just feel lucky to have gotten them for $18K instead of the $28K sticker due to biding my time and waiting for the stars and planets to align (maximum stacking on various incentives).
So, even though we don’t have the kids in private schools, for my wife and I having kids has been fairly expensive indeed – but I recognize that this is primarily due to the decisions my wife and I make together.
But if I lived in Podunkville Indiana, I might be happy to raise my kids cheaply on a farm instead of spending all this money on them. Probably wouldn’t have access to all these expensive Persian, Indian, Ethiopian restaurants. My wife might be okay to have the kids driving used $1500 beaters in a less urban area without all the crazy, congested traffic we have around here (FWIW, when my wife and I first moved here from the Midwest, our auto liability insurance doubled, simply because our new area has a lot more, and a lot more expensive, crashes).
And while having kids need not be expensive, adopting them certainly is.
After a quick trip to the Google I found Adoptive Families Magazine surveyed 1,100 families who adopted a child in 2012-2013 and found average cost of adopting through an agency is $40K per kid, so I guess that adopting kids does need to be expensive.
PJJonas – enjoyed reading your story. It’s “a little” different from the norm and I’m certain I could not do it, even though I grew up in Podunkville, Midwest USA myself. Although we do save a lot of money, I also LIKE spending money.
Just saying there’s a reason why the government came up with a Federal Poverty Limit of $42,000 for a family with 8 kids.
Adoption is a great option, but it is not for every family.
I didn’t tell my story to say that what we chose is what is right for everyone. I simply shared it because I’ve had a lot of people over the years share with me that they want more children, but are afraid they can’t afford it.
My point is simply that you can make it work if that is where your heart lies. I know plenty of people with one child who are strapped for money all the time as well as people with 8 children who are strapped for money. Having fewer children does not mean that you will have all the money that you want to live the lifestyle you feel you deserve.
We moved away from the ocean (which I love) to the midwest because our family was worth that sacrifice. I don’t believe it’s cruel or wrong to sacrifice for what is most important to you. I could have gone back to work as an Engineer whenever I wanted, but it’s not what I wanted.
We live incredibly rewarding and fun lives. It just doesn’t cost us a lot of money (which may be difficult for people in high cost of living areas to understand). When you grow much of your own food (dairy goats for milk and cheese, chickens for meat and eggs, plus veggies and fruit) your food bill is incredibly low. When you grow such awesome food, eating out at restaurants isn’t nearly as fun since it rarely tastes as great as what is served at home. (Yes, I like to cook, so it’s not a burden to me).
When you have that many children, there is very little need to buy clothing since everyone gives you their hand-me-downs.
Children had swingsets, bikes and 3 acres to play in. Car was paid off. House was paid off. Grandma & Poppy worked at Disney World so we spent 2 weeks there every year. Plus, because we homeschooled, we could rent a beach house in September (after everyone went back to school) for less than half price. Those are better vacations than most children get and cost us incredibly little.
Property taxes and insurance were super low as were utilities. Braces weren’t a need til children got older.
The federal poverty limit is not setup for a family like ours because not everyone wants to live like we do. Farming is hard work but incredibly rewarding. Just like a large family is. The beauty of our country is most people can choose how they want to live and how many children to have and how much to spend on them. We had a 50% saving rate when we lived on 20,000 a year. If anything was needed, we had the savings to cover it. That doesn’t seem cruel to me. Personally, it seems like a very good lesson to teach your children to live below their means.
And just to be clear, I didn’t “start a business to help put my kids to work”. I started a business because as part of their homeschool education I wanted the children to have the skills to run a business. Big difference. The fact that they all enjoy working in it is just a bonus. They all know they’re free to pursue whatever opportunities appeal to them.
I’m not sure why there is so much hostility in your response, but I hope that clarifies a few things.
PJ
Sorry about the hostility. I work with a lot of adopted children in foster children who need homes. So when I see your family purpose we’re having so many more kids than the normal, and makes me question why they don’t consider adopting a child in need instead if they really love children.
Glad the budget works out for you guys.
PJ, your story is inspiring and a great model for other families. And thanks @FinancialSamurai for these really insightful posts that spark great discussion
For the chart on Federal Poverty Limits, click here.
LOL Yep – my life is definitely not typical. And “Podunkville” definitely describes it compared to how I grew up in NJ. There is a different mindset in the midwest (some of it good, some of it bad) and I definitely raise my children with more of an “East Coast” mentality.
Our children used their money from their salaries to buy their first car (the oldest three bought their grandfather’s used minivan). And organized sports mostly consisted of a homeschool cross-country team they could all run together despite the age differences.
We’ve been able to take the children to New York City 3 times. Every time we go we seek out restaurants that we easily get in Indiana (without driving 2 hours) – Greek, Indian, etc. We all love visiting the city, but nobody wants to live their permanently.
I like spending money too – but it’s mostly either for new buildings/equipment for the business or building memories.
Hi, thanks for the follow-up.
Just out of curiosity, what is your order? Mine were girl/girl/girl/boy.
By the time my son came along I was kind of lost for a while. “I know what to do with daughters – now I gotta figure out a son?”
I know exactly what you mean. We had 1 girl, 5 boys, then 2 girls. Boys and girls are soooo different!
Hi PJ, your story was truly inspiring! I am currently considering homeschooling my kids, not for financial reasons, but because the level of quality in any currently existing schools that I have seen just does not seem good enough to me, can you expand some more on your approaches and what resources you use to homeschool your kids?
Agree!! PJ your story is super inspiring. Thanks for sharing it.
You’re very welcome! :) PJ
Thanks, Jay.
There are as many ways to homeschool as there are families. My husband taught Junior High science for 7 years and I tutored math for about 15 years. We are very opinionated about education. Our children cover a lot fewer subjects than they would if they were in public school, but what they learn they remember because they use it.
We are avid readers and teach them to read quality books. We stress problem solving in everything. We never give them the answers but guide them as they figure it out. We also base a lot of learning topics on the business. Math – business financials, business budget, excel spreadsheets. Writing – blog posts, business plans, customer emails, website work. We talk about politics and history all the time. We do lots of documentaries. We don’t segregate “school” but integrate learning into everything we do.
I feel that my biggest jobs as a homeschooling parent are:
1. Teach my children how to learn
2. Teach my children to love to learn
I know that I can’t teach them everything they need, but I can teach them the skills to spend the rest of their lives learning what they find that they need to know.
My husband and I many years ago did 4 podcast episodes on homeschooling. It may be worth listening to. The first one is here: https://pjjonas.com/2012/09/20/homeschooling-part-i/
If you choose to homeschool, I have a few recommendations.
1. Do not feel that you have to meet anybody’s expectations except your own. Everybody in your life will try to make you feel guilty that you’re not doing a good job. Don’t let them do that.
2. Don’t try to do “school at home”. Think about what your children need and teach them that. Don’t replicate what they would do in a public school classroom. You can do better.
3. Treat your children as individuals. They don’t all need to learn the same thing. And they usually don’t have the same learning style.
4. If you’re not having fun, you’re doing something wrong. Learning should be fun.
5. Take a break. I usually recommend that for each year your child has been in public school, take at least 1-2 weeks where the children can learn about whatever they want. Usually public school beats the desire to learn out of children in favor of busy work. Let them rediscover that it is fun to learn new things.
I could go on and on about homeschooling forever, so let me know if you have any other questions.
PJ
Wow. You are amazing! For having 8 kids. For homeschooling them. For being able to take care of them on $20k a year. I mean wow. My husband and I have 3 kids and we live in a more expensive state/area, but we also own a business and make about $150-$180k a year. We could buy a bigger house just like our friends/neighbors but choose to live way, way, way below our means. We’ve spent tons on vacations though going back and forth to Europe to visit family. And spent lots on kids’ sport clubs, etc. Because we’ve focused on paying off our home (paid off 2 years ago) and saving for retirement we don’t go out much and don’t spend just because. In fact we could retire tomorrow if we wanted to but my husband wants to work for another 3 years or so. What I’m trying to get at here is how in the world have you managed to raise 8 kids on a $35k income? I am as frugal as they get (I usually say “my husband makes most of the money, and I know how to save most of it!) but even I can’t wrap my head around that…Good luck with your business.
We don’t raise them on that much anymore. Now we probably spend about $40k per year. Braces and driving and teenagers are a lot more expensive. LOL But we grow almost all of our own food. Plus Goat Milk Stuff (our business) now serves lunch so we mostly eat lunch through the business. And since the children all work for the business and make good salaries, after they’ve saved for retirement, they use their own money for their desires and part of vacation and such. As a farm family, we also don’t spend much on clothes. We have a work “uniform” of jeans and red t-shirts that most of us wear all the time. We keep it pretty simple. We also have a pool so most of our fun time gets spent there for little money. It’s like anything – if you desire to live debt free and save for retirement, it’s amazing the things you no longer enjoy spending money on. :)
PJ
We don’t have 4 kids to signal my wealth. We are not wealthy. In fact, thinking about money and “how expensive kids are” made us feel I’ll. WeI will have as many kids as God blesses us with. If that means having more naturally or fostering so be it. Family is not a calculation.
Kevin, have you ever considered God might want you to think about adopting kids instead of having more of your own?
Freddy, have you ever considered that the choices someone makes in their life may have nothing to do with you or your religion? I found your comment very abrasive. My wife and I have 3 children and have considered adopting our 4th. We remain undecided but to force your views on the family life someone wants to have is mighty presumptive.
It makes me so sad to see your last question on the poll if you only had 2 kids which gender would you want and what order. Still there is a preference in this modern day and age for boys. Boy/girl over girl/ boy and boy/boy over Girl/girl. What gives? When will people’s perception or preference of having a baby girl change? My sense is people still consider it having a liability to have a girl. In developed markets, that perception is turning to be more and more false.
I have two boys and I think it’s better to have a girl first. A daughter is more likely to take care of her younger siblings and her aging parents.
It is an interesting result. What did you choose?
I think all parents are just happy to have a healthy child, regardless of sex. I’m indifferent.
One of each is something that I expected… but not 75%+ expected. More like 50%.
I chose Girl/Boy but I also have a 2 year old girl so the 1st gender is now not a choice. Even so, if my family only happens to have 1 child, I would still want a girl.
Most people, if given the opportunity to have 2 kids, will most likely choose to have one of each. But given that the 1st gender choice being boy is overwhelmingly popular, it shows that people still have a male preference even if faced with having only 1 child. I expect this with what used to be 1-child China or India where the gender ratios are so screwed that its essentially screwed an entire generation, but assuming the population that reads your blog are most likely well-to-do folks living in developed nations, I am dismayed this is still the choice today. I would have expected it to be more equal.
I can only assume this is because people still see raising a girl to be a “liability” of some sort: whether it be financially or from some emotional vantage point. If people really dig down deep into the data and statistics, they will begin to realize if you invest in girls – your returns are tenfold in the well beings of entire families, communities and nations.
Not sure if you over analyzing it. I selected boy first than a girl not because I don’t want a girl. It’s because I only have a boy and hubby doesn’t want anymore kids. As long as the baby is healthy, majority of us doesn’t really care.
Unfortunately, the poll’s population is large enough and the differential widespread enough that there exists statistical significance showing a preference for male. If it was mainly because people like you and I who already have children are no longer able to choose a preference, than the results would be closer to 50/50 (based on the natural probability of having either male or female).
Unless the order of options was randomized, you cannot draw that conclusion. The boy/girl option was listed first, and people may simply not have paid as much attention to the ordering as the pairing option. The doubles of each sex I’ll give you.
I wonder if it is possibly skewed by the sex demographics of Sam’s readership. I have to imagine his blog readership is at least 60% male. It would make sense that his readers (representative of the population) might prefer the same sex as their own.
It’s a good thesis! 65% of my readership this year is male according to Google Analytics. So there is a skew if most parents prefer a child of their same sex.
https://www.financialsamurai.com/who-is-the-typical-financial-samurai-reader/
It made me sad too that still today only 7% would want just girls. As a mother of 3 girls, even today I get a lot of really ridiculous comments – “you going to try for that boy,” “your poor husband”, etc. etc. etc. As if somehow my family isn’t complete or is less than without a boy. My 3 daughters are a complete blessing, have me laughing for days and are incredibly smart and talented. You can bet they are being raised as equals to boys and there won’t be a 2nd thought it their head regarding whether they’re worthy or equal if I’ve done my job correctly. To eveyone hoping/wishing for boys you should be hoping/wishing for healthy children.
I choose boy/girl, when in reality I have girl/boy.
I do not prefer boy over girl, but I wanted boy/girl because i feel the first born tend to be more mature, shoulder more responsibility. And my opinion is girls tend to mature earlier than boys and more ‘sensible’. With that thinking, I wanted my boy to be the first born to take the brunt of being an older brother and be responsible.
In reality, I have girl/boy. Which is actually what my mother tells me the better order. And other parents with boy/girl also told me they’d refer girl/boy, as girls tend to be more maternal, so the older girl often is of great help when there is a new baby. And this turned out to be true for me. My older girl is quite caring/maternal toward her baby brother. She is actually an extra set of hands for me in terms of helping me grab things and showering love. Her younger brother adores her and follows her around, they are 4 and 1 now.
I also wanted 3 kids, but decided to stop at 2. Cost is not a concern, b/c I personally think it is ridiculous to not have kids due to cost. You want kids, you have kids, you find ways to support those kids. America is so big, there are places for you to move to that are less expensive. I also life in SF. But i understand why for some cost is an inhibitor, just no my personal choice.
My husband and I are in our early 40s, we do not want the chance of having an unhealthy baby due to sperm/egg quality. So we decided to stop at 2.
We have 3 sons. My wife and I both wanted boys. She admitted a small sadness during the ultrasound of the 3rd showing him to also be a boy, because she knew it was likely our last and she’d never get to experience a daughter. Aside from that, she and I are both over the moon happy with our boys. Assuming that a daughter first gives you a “more caring” first child is odd to me. Our oldest son has a heart of gold, cares for both of his little brothers in the best way any oldest sibling could ever be hoped to (he has literally saved his middle brother from drowning in a pool), and loves to help my wife and I with household duties. The little guy loves to grill with me, cook with mom, work on cars with me, mow the yard using our reel mower, and more.
My wife brags about how she always has so many men piling the attention on her, being that she’s the only female in the house. She says it makes her feel like a queen and that she enjoys being the only girl in their lives for them to give attention to. My wife also gets tired of all the women who tell her “sorry” and “are you going to try for a girl now?” and “omg, all boys sounds like hell” and “bet you wish you would have stopped at the first one huh?” because to those women, having boys means you’re somehow defective and less of a woman because you didn’t have a daughter. If anything, the women who put my wife down for all her boys has just made her more proud and happy for all the men in her life. :)
Large families can survive in a high cost of living area by being frugal. In San Jose, CA, there are Hispanic families with 4 kids and a household income of $100K.
I believe parents have a lot of kids because they 1) want a large family or 2) don’t believe in birth control. My Korean parents each have like 8-10 siblings because they didn’t have TV or birth control back in the 1950s. I’ve had Mormon co-workers who have 4-6 kids and they were able to live in the SF bay area.
Sam, you should call into the Dave Ramsey Show for the millionaire hour!
In reference to the following:
“Few families with enough means to have four or more children would dare send their kids to public school. After all, one of the purposes of having so many kids is to convey status.”
I would never send my kids to private school (I have 4). Status be damned. The reason to keep having kids is very simple, your family feels incomplete. Completeness is a different amount for different people and having 1 is no better or worse than having 6, its highly individualized. You are right on one front, a lot of variables need to tip in your favor in order for it to work out. While I strongly believe that finance should not impact family size decisions, In that its not the worlds place to tell me how many or few kids to have, I do acknowledge the difficulty of adding children at lower salary levels. Even though I could afford it, private school is not something I would consider, well, unless the public school system where I lived were horrible. I currently live in the #1 state in the US for public schools, and I live in the #1 county within that state, there is little reason to go to private school unless you like burning money. Also, I feel like public school better prepares children for the world, private school kids, at least when I grew up, were always weird and naive.
I was hoping someone would zero in on my private school comment. I love the debate!
Tell me more about this incompleteness feeling a couple may feel. And how does a 3rd or 4th child feel more complete than just having 1 or two.
What factors do you think cause people to need so many more children than average in their lives?
Good article Sam and I DISAGREE that it’s “tongue in cheek.” Specifically, I live in TX and far too often have seen stats similar to those posted by you (with the exception of astronomical housing costs). Yep, the au pair IS much cheaper than the Nanny. The Nanny “Status symbol” is just to prep you for the private school costs, etc “More Status symbols”. However, we all have a CHOICE (i.e. A+, B+, B, C+, etc. ). For example, I couldn’t imagine having 2+ kids let alone 4. Therefore, an A+ for me is 1 kid while for others 1 kid would be an F-. Others continue to ask, Sam why are you living in an HCOL area (other than successful R.Estate investments, diversity, etc…maybe that’s your A+ location for now and a LCOL = F-).
Another example is the $12k/yr private elementary tuition versus $30k/yr+ tuition in the same zip code. Those price points simply add perceived value and shine to the trophy (Trophy = education, kid, travel, social network, etc.). That being said, your example is more of an A+ on most fronts though not all. A+ travel is certainly more than $24k/yr for certain families (i.e.think the hamptons, aspen ski week for private school families, etc.). But this all runs in line with “Parkinson’s law” of the more you earn the more you typically spend.
In conclusion, after reading the above comments I believe everyone has a different answer for their CHOICE of lifestyle (i.e. Zero to infinity # of kids, travel tastes, automobile choice, etc.). No matter how many kid(s) we elect to have or not have, both selfish endeavors, I’m more curious to know deep down WHY does more than 1-2 kid(s) equate to an A+ or A- lifestyle?
I admit I’m proposing the question because I’m blind as to how additional kids equate to additional happiness. Also, I think this would be an interesting post, because the data around additional kids and divorce can surface some interesting results.
Choices, choices, choices indeed. Nobody is the same.
In my opinion, two kids is nice because it’s nice to have a sibling to play with and grow up with.
Two kids also feels like a balanced household where each child can get at least 1X1 attention most of the time.
But if I could snap my fingers and have 3 or 4 kids, I probably would, if I could also have tremendous childcare support.
I just think kids are amazing. They will definitely try your patience, but they are a wonder. Makes life more worth living IMO. Gives me motivation to continuously try hard too.
Thanks for the reply without judgment! Obviously it’s a taste/preference thing as I unfortunately don’t share the same wants nor intrinsic motivations as many on the kids front. You’d be surprised how much others will negatively judge you based on not wanting a family of 4-5+.
However, I definitely think this is an eye opening post for those who illustrate how to do more with larger families while earning less! This really confirms others values (family vs retirement vs other)
I gotta chime in here about “Parkinson’s Law.” That’s about time, not money. The first person I encountered who said something like “Expenditures rise to meet any and all increases in income,” was a guy named Dave Brown in the early 1990s. I’ve been calling it “Brown’s Law” ever since.
If anyone can cite an earlier example, please let me know, as it may very well be implied in the writings of Adam Smith or metaphorically expressed on the cave walls of Altamira, and I’d like to credit whoever (we think) first expressed it.
We have two and an in an out foster child, but I don’t see how we’d ever need a number like above for four kids in a wealthy or poor area. My brother in law has four and he lives in a three bedroom 1 bath house just south of nyc. Maybe a bit extreme for me but I have a 4 bedroom 2.5 bath house and can’t see any concerns with space at 3 or 4 kids.
The food bills also a bit rediculous. Once you get to multiple kids you switch to casseroles. 100 dollars a day is very inflated at that point.
I also wouldn’t do private school.
Child care seems about right though.
So great you guys are fostering a child. Major respect to you and your family. Good tip on casseroles :)
7 kids here! I win! My wife and I married the wrong person the first time around. I brought two into the marriage and she had 4. We made one last child to rule them all. I guess with shared parenting time that makes 4 FTE (full time equivalent) children. We live in the Phoenix area and have household income around 125k.
Lol, one last one to rule them all. Congrats!
Are you taking that child on a field trip to Mordor?
Just remembering that I happened to grow up next to 3 families who had had 4+ kids (in the 80s). We lived in a wealthy New York suburb, but it didn’t seem extravagant back then. They all went to public school, and one of them had a big Ford Econoline as their family car the other had a Buick and a Honda Civic. The dads were all well paid professionals (psychologist, lawyer , banker), but my guess is they made no more than the equivalent of around 300k in todays dollars. Funny how times have changed and large families are now a status symbol. They didn’t have nannies or au pairs. If I recall correctly, the oldest kind of took care of the younger ones but they were all pretty “free range”. In theory, I wonder if it would be possible today on that type of salary – living in wealthy suburbs and attending public school. I’m guessing you’d be accused of child neglect.
2 people from HS class did end up having big families. They live Connecticut, work in banking and send their kids to private school. $1M as a guess for their compensation sounds about right.
I see your point and agree with many of the spending categories, including the au-pair. However, the only one I did not agree with is the private schools and high taxes. Yes, if the subject family has money to throw away they can pay high property taxes and also pay tuition for private schooling, but that in my opinion is a waste of money.
When we left Brooklyn for the suburbs of NYC where the property taxes and home prices are crazy, we offset them with the cost of private schools. Two children in private schools that cost $40k in after tax money more than offset the $34k I pay in property taxes for an old house that needs a gut renovation.
It’s true, paying private school tuition and property tax is a waste. But that’s what the rich do because they want to have their cake and eat it too.
I’m the oldest of six kids. I’m in college while the five youngest are still at home. My parents’ total income has never surpassed 100,000 and for most of my life was in the 60s. My dad worked as an accountant and my mother homeschooled us and occasionally worked a couple nights a month as a nurse. We live in the suburbs in North Carolina. I’m sure they haven’t saved as much for retirement as they’d have liked but they considered their family more important. It is definitely possible to have a big family with less than your numbers if you just don’t live in the most expensive places in the country.
Your mom is a hero!
May I ask how you are paying for college? The good thing about having six kids is that hopefully you and your siblings will support your parents as they get older.
Great article, Sam! I can relate to much of what you’re writing about here. Our 4th child definitely deserves a trophy — but of course that’s not why we had him…!
We had our first child early because we thought we might want a big family. I was 27 and my wife was 26, less than a year after marrying. We were still in graduate school at the time, so didn’t really have a working / saving period before kids. Ten years later, we now have children ages 10, 7, 5, 2.
We live in a Boston suburb which is pretty HCOL but not as high as SF. Our childcare is more than you’ve allocated between a nanny and constant babysitters, we’ve had a few children in private school but at much lower cost (<$15,000 per child in Catholic schools) but we're switching to public schools to save that expense, other spending varies by category (some higher, some lower — for example we haven't bought a new car in years). Suffice to say that our childcare bucket is more than our housing bucket for annual spending and it's our highest category of spending.
I think it's key to have strong income. Having dual earnings (consultant + doctor) is the only way we've made it work. We were pretty frugal for many years early and got ahead with savings, but now it's more about just making it work ("money in, money out"). We're actually in the process of moving to a lower cost-of-living area for many of these reasons.
It's like anything in life: you adapt to your circumstances and make it work. For any parent, you know that you'd do anything for your kids and you'd never trade them for any amount of money, after they exist. Each of them is so amazing in his or her own way. It's a roller coaster but it's worth the effort. Despite good income and decent savings, though, I don't see us retiring anytime soon… :)
Cheers-
DeForest
PS. You're right about this one: "If a mom can birth four or more kids, I think she is amazing and deserves a trophy." My wife is amazing and definitely deserves a trophy (or four)…
What an amazing and blasted family.
Any family tips on how to best make things work? What are some of the most difficult things you’ve had to face and deal with raising for children?
Thanks! We feel very fortunate and blessed to be able to grow our family while also pursuing careers. Here are a few challenges and tips I’ve written about in the past, which are most relevant for two-career households…
1. Protecting Your Most Valuable Asset. The most important risk to protect against is one of the parents getting sick or depressed. Staying happy, healthy, and productive (i.e., human capital) is the most important family asset, so we need to spend a bit to protect and insure that asset. https://econdad.com/protecting-your-most-valuable-asset/
2. Managing Correlated Stress Points. It can be difficult when peaks at work coincide for both parents — for example, when I have to travel and my wife has a big research deadline. You’ve got to marshal resources to power through and alleviate those stress points. https://econdad.com/managing-correlated-stress-points-with-two-working-parents/
3. Aligning Careers With Your Spouse. It’s also important to complement risks and rewards of career paths with your spouse. Think about it like diversifying risk in a household portfolio. You want to zig while he/she zags. You take risk while he/she is stable, and vice versa. https://econdad.com/guest-post-aligning-careers-with-your-physician-spouse/
On the whole, it has been thrilling but also very tiring at times. We have definitely relied on the energy of being late 20s / early 30s parents. Starting a bigger family in late 30s / early 40s might have been too hard (and/or biologically impossible).
It has also required putting limits on career energy. Work can be all-consuming, if you let it. You need to constantly ask: How much of myself can I reasonably devote to my career? And then give it your all within that constraint. In other words, we do our best within reasonable constraints of the time and energy needed by our family.
Lastly, finances is a constant challenge, though not insurmountable. We’ve taken the approach of powering through: make investments in reliable childcare and family support to promote our love and strength, so that we maintain the time and head space to be successful at work.
Sometimes we question whether we’ve made things too hard on ourselves — i.e., working too much and wanting more relaxed time at home. But we prioritize family health and work-life balance as best we can, and, I think, reasonably achieve it.
The final point I’d make is that there’s no secret formula. Every family is different. We can learn from the thoughts and experiences of others (like so much that I’ve learned from FS), but ultimately we each make our own paths.
Thanks for all the high-quality thinking and writing you’ve been doing on family and finances lately – I’ve been very much enjoying it!
PS. I remember an on-point quote from Tina Fey’s “Bossypants” book from a few years back, where she wrote something like: “Some people in New York City have a fourth kid just to show that they can afford it.” Sounds like she’s seeing similar things in NYC…!