Many American Parents Financially Unprepared To Have Children

A new survey is showing that nearly half of parents admit they are not financially prepared to have a child, indicating that parenting has become a financial burden amid the rapidly increasing cost of living. According to the first annual Policygenius Parents & Money survey, 42 percent of parents said they were not financially prepared for the expenses that come with raising a child. Policygenius is a New York-based online insurance marketplace. The survey, based on responses from 1,500 parents with at least one child under the age of 18, was conducted through Google Surveys from June 3 through June 6, 2019. Even of the 58 percent parents who believe they were financially prepared, 23 percent said they lacked key financial instruments such as a traditional savings account, private life insurance, and 529 college savings plan, that help to prepare for child-related expenses. Families with these financial instruments in place feel more financially secure about having children. According to a 2017 report from the U.S. Department of Agriculture, the average cost of raising a child from birth through age 17 is estimated to be $233,610. The figure notably excludes college tuition. Indicating the financial strain amid the burgeoning child-related expenses, one in three parents, or 32 percent, said their top financial goal is to pay down debt, topping far more aspirational goals like saving for retirement and buying a house. Among different demographics, 64 percent of married parents said they felt financially ready for a child, compared to 38 percent of single parents. This highlights the financial strain that comes with raising a child on a single income. Meanwhile, 63 percent of the men surveyed said they felt financially ready for a child compared to 53 percent of women, with the figures likely influenced by the gender wage gap as American women are paid less than men. Among child-related expenses, 25 percent of parents said the cost of childcare was causing the most financial strain, while 20 percent said the cost of food was the reason. Eighteen percent of the parents identified their kids' recreation and extracurricular activities to be the cause of financial strain.