What Careers Work With Animals

DO A PROFORMA

Guy Kawasaki, the original Apple evangelist and modern-day start-up guru, calls children “the ultimate startup. And when they leave for college, it’s their IPO. And when they get married, it’s an M & A deal. And like most startups, these milestones usually take longer and cost more than you predicted.”258

I raised my children in the heart of Silicon Valley, so start-up analogies are hard to avoid, but Guy is right. Crass as it may sound, it’s not so outlandish to think of your family as a business and your children as the products. Like any business, you have income and expenses, assets and liabilities, profits and losses. I’m not talking about the intangibles of love and worry and care. I’m talking real money here. To determine if you (or your partner) can afford to leave the paid workforce, I recommend doing an eighteen-year pro forma to assess the financial implications. This will help you both decide if one of you can truly can afford to pause and, if so, for how long.

Run the Numbers: Consider the Real Cost of Raising a Child

Look, we all know children are expensive and the costs of raising them doesn’t stop when they are eighteen, but you need to start somewhere. The U.S. Department of Agriculture has been tracking the cost of raising a child since 1960.259 The data, which includes food, housing, child care, and education, is used by state governments to determine child support guidelines and foster care payments. As of 2013, the U.S. Department of Agriculture estimates it will cost $304,480260 (adjusted for projected inflation) to raise a child from birth to eighteen. That’s around $17,000 a year.

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Seventeen thousand dollars a year? Perhaps in some parts of the country, but in California where I raised my kids, child care alone runs around $12,000.261 And, what about the thousands of dollars you’ll spend on their “enrichment” programs such as art class, summer camp, soccer club fees, piano lessons, tutoring, braces … the list goes on and on. Then they hit high school, and there is a myriad of big and little ways you’ll blow your well-intentioned budget: “All my friends have a phone.” “No one I know pays for gas when they drive the car, their parents do.” “Everyone’s got a private college counselor, why can’t I get one?” My guess is that for many families who want to give their children the “best” foundation for success, the annual costs will be much, much higher. I know ours were.

And what about college itself? Well, the USDA doesn’t take that into account. As I shared, for our three children, college alone will cost us around $1,500,000 before taxes. If you plan to send your children to college, an eighteen-year pro forma is not enough, but it is a good place to start. You can use the USDA’s Cost of Raising a Child Calculator to help you get a sense of the estimated expenses. You’ll be shocked at how quickly they add up.262

In your financial planning as you and your partner consider the implications of living on one salary for a period of time, ask yourself if you have the resources to cover your expenses. Can you really afford to live on one salary? If yes, for how long? And, what are the long-term financial implications if you do pause your career?

For the vast majority of women we surveyed, a two-year break was doable. Beyond five years and they were forced to make major life changes such as downsizing or significantly reducing their lifestyle, or they were part of the One Percent.

Yes, they are adorable and worth every penny, but don’t deny the reality of how much it will cost to raise your children. Do a pro forma that takes into account the full breadth of these expenses and then plan accordingly.

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