Parenthood beckons millennials, but cost is prohibitive

It’s almost a rite of passage out of probationary adulthood into bona fide adulthood for a woman to hear the question from her older female relatives: “So, when are you going to settle down and start having babies?”

If you’ve heard that question at all, odds are you’ve heard it numerous times. In some families, it can become downright badgering. There are a lot of ways to take it — with a laugh and shrug, with grin-and-bear-it resilience, with vociferous and righteous indignation. But you try to remember that they love you and want you to be happy — and babies are what they believe to be an essential ingredient to happiness.

Millennials feel familial urge

I feel bad for my fellow mllennial women, because we must be hearing that question a lot. As revealed by an Urban Institute study last year, we’re the slowest to have kids of any generation in U.S. history. In the six years from 2007 to 2012 alone, birth rates among women in their twenties declined 15 percent.

I also feel bad for millennial women because many actually want to have kids but can’t. Not for health reasons and not because they’re too career-focused, self-absorbed or glued to their iPhones to do so. It’s economics, plain and simple. As Urban Institute senior fellow and study co-author Nan Astone told “The Washington Post” last year, women under financial duress are saying to themselves: “Things are tough right now. Let me put this off because I can.”

Birth rates dip during uncertain times

Many Americans — and certainly an entire generation of young Americans — are still feeling the effects of the financial crisis of 2008 and the Great Recession. Millennials are so consumed with securing a job, establishing a career and paying off student loan debt that getting married and having children has been put on the back burner. The Great Depression of the 1920s and ’30s as well as the great inflation of the 1970s had a similar impact — birth rates fell. When people feel like the walls of their world are collapsing and the foundation is wobbly, they delay children until they feel as though stability has returned. And for many of the same reasons, people are getting married later than they have historically. In the U.S., the average age for a first marriage for women is 27, and 29 for men. Therefore, couples are having fewer children simply because they have less time to have them.

Babies are cute but costly

Who can blame them? The U.S. Department of Agriculture estimates that to raise a child born in 2013 will cost approximately $245,340. This is simply for “food, housing, child care and education and other child-rearing expenses up to age 18.” College and postgraduate degrees are not included in that figure. Meanwhile, “U.S. News and World Report” predicts that by 2030, the average cost for a four-year public college will be $176,000.

But wait, back up a sec. That $245,340 figure also doesn’t include the cost of actually giving birth. That depends on where you live, the hospital and your insurance. According to a 2013 study by Truven Health, the average total payment for maternal and newborn care for those with commercial (non-Medicaid) insurance was $18,239 for a vaginal birth and $27,866 for a cesarean birth without complications. The average out-of-pocket costs for commercial and Medicaid payers was $2,244 for vaginal births and $2,669 for cesarean without complications. Without insurance, the cost is closer to $30,000 and $50,000. With complications, costs can go north of $250,000.

For a child that’s born naturally to parents with commercial insurance, who attends a state school and whose expenses are altogether average, the bill is $423,584! The bottom line: Having, raising and educating a baby into adulthood is pretty darn expensive.

The good news is I’ve heard they’re worth every penny.

These stats aren’t meant to scare anyone. I’m trying to do two things: to explain why birth rates have fallen recently and to arm would-be parents with some financial knowledge as they prepare to take the baby plunge!

Jennifer Pagliara is a financial adviser with CapWealth Advisors LLC, and a proud member of the millennial generation. Her column, which appears every other Saturday in The Tennessean, speaks to her peers and anyone else that wants to get ahead financially.