I’m always impressed at how resourceful my parents were in providing opportunities for me given the limited resources that were available to them. Most parents understandably wish to provide as much opportunity for their children, and it’s clear that this comes at the cost of money and time.
It’s natural to think that every successive generation strives to achieve a better quality of life, and certainly that comes at a price. I certainly enjoyed luxuries that my parents never imagined for themselves, and our children likewise experience an upgraded childhood compared to my own. This progression is only possible when earning power increases with subsequent generations. Physician households, along with those from other high-income professions, generally have greater spending capacity compared to the average household. Having a greater income doesn’t necessarily mean that you are obligated to spend more, but it certainly positions you to have more options.
To each her own
Personal finance is obviously a personal matter, and everyone has her own threshold for risk or choices that can impact their retirement, health, and working career. Physicians can probably afford a nice home, a fancy car, and a few luxurious vacations, but if you choose to own everything that you might want, you might have to work forever. There are plenty of physicians who know better to be spendthrift, and physicians with intelligent financial discipline leverage their earning potential to achieve their life goals sooner. Anyone with children can attest that there is no limit to how much you can spend on them, and how much of your resources you direct to your children has a clear impact on your financial future.
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Kids are expensive for physicians on day one
Two factors come to mind when we think of characteristics of professions that are more likely to spend more to raise their children include: (1) higher income/wealth/educated parents, and (2) less free time. You obviously have to have the means, and you are more likely to spend if you value your purchases. If you have less time on your hands, then you are more likely to pay someone or something to accomplish something that you aren’t able to do yourself.
Medicine is a profession that ticks all of these boxes. Some medical specialties are busier than others, but most physicians are busy when the clock is running. And indeed the physician clock runs long hours. The stress goes with us everywhere—while we’re eating dinner, exercising, and trying to sleep. Children obviously makes juggling the profession even more difficult. Physicians don’t often have the luxury of maternity or paternity leave, and are dragged back to work much too soon. In dual working households, this typically means sending kids to daycare or having stay-at-home care. Some professional nannies command a salary upwards beyond $50,000 a year (some can be 6-figure expenses in the metropolitan areas!).
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I remember reading somewhere recently that collectively parents in the U.S. spend $42 billion annually for their children up until age five. This averages out to roughly $500 a month per child. Any household needing childcare will easily exceed that amount. If you include all of the early childhood development activities, specialty foods, and other necessary (or discretionary) child needs, the costs add up. Doctors are likely to spend more on their kids straight from day one than the average person.
It is not uncommon for doctors or other career-oriented households to opt for meal preparation services, housekeepers, and anything else that could possibly make their lives easier, all because they don’t have enough time to do everything and take care of their kids. Who knows if doctors would outsource some of the services they do if their occupations weren’t as demanding or if they had alternatives.
Self-inflicted chaos is common for the modern household
The costs often do not decrease after children become school-aged. There is no shortage of activities that school-aged children can participate in, and there is practically no ceiling to how much time and money one can spend on them. Baseball, lacrosse, soccer, basketball, judo, tae kwon do, Kumon, football, robotic club…there is an activity for anything your kids want to do. All of this costs money, and getting them to their activities will cost you time. The desire for parents to have their children dabble at everything is not limited to physician families either—we see this behavior in families (anecdotally) with both higher levels of education, income, and living on either of the coasts.
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Case in point: One of my physician friends living in another city had recently agonized on finding a home in a highly rated school district even though she intended to keep her children enrolled in private school! Her rationale for doing so was simply to keep options open for her kids. What’s her trade-off for this decision? Her retirement date will probably be delayed, but there’s unlikely any crystal ball to say for certain. Are there more financially conservative alternatives? Absolutely, but we get to choose what is important to us.
Crafting the rat race
Most physician households are going to fall somewhere in the middle of the child-rearing cost scale. I would venture to argue that having the means to spend is the greatest factor that determines how much you spend on your children. It is an interesting thought exercise to consider how much environment and peer pressure (or lack of it) influences one to become an outlier on either end of the scale. For instance, what causes parents to ramp up expenditures on their children aside from personal beliefs? Is it your coworkers or neighbors, or simply living in a city where it seems like everyone does it? Conversely, what factors cause us to jump out of the rat race and help us justify that we’re providing adequate care for our children’s futures?