The decision to be child-free can have significant financial implications for individuals and couples. While there may be societal stigmas attached to the choice to not have children, more and more young adults are opting out of parenthood for various reasons, including financial considerations. According to a recent consumer spending and saving index by MassMutual, nearly 23% of millennials and Generation Zers without children do not plan on having children, with financial reasons being a primary factor in their decision-making process.
Financial Freedom vs. Affordability
A preference for financial freedom and the inability to afford children are both commonly cited reasons for the choice to be child-free among younger generations. The survey conducted by MassMutual polled 1,000 adults in July and found that 43% of respondents mentioned financial considerations as a significant factor in their decision not to have children. This trend reflects a shift in attitudes towards marriage and parenthood over the past few decades.
Changing Attitudes Towards Marriage and Parenthood
Since the 1970s, there has been a decline in the overall share of married adults and a decrease in the number of couples choosing to have children. According to a 2023 report from the Pew Research Center, the fertility rate in the United States reached a historic low last year. As a result, adults without children, whether married or unmarried, tend to have higher median wealth and retirement savings compared to their peers with children, as indicated by a separate study from the Pew Research Center in May.
Financial Benefits of Being Child-Free
The majority of adults without children reported that not having kids has made it easier for them to afford the things they want and be successful in their careers. While there may be financial benefits to being child-free, it’s important to note that it does not mean that individuals will suddenly have money falling into their laps. Jay Zigmont, author of “The Childfree Guide to Life and Money,” emphasizes that financial planning for child-free individuals, whether they are SINKs (single income, no kids), DINKs (dual income, no kids), or DINKYs (dual income, no kids yet), requires unique considerations.
Financial Planning for Child-Free Couples
Zigmont, who is a certified financial planner and founder of planning firm Childfree Wealth, points out that most financial planning assumptions are based on the premise that individuals either have or will have children. However, child-free couples often have different goals when it comes to building up savings, estate planning, and long-term care. For example, many child-free individuals do not prioritize passing money down to the next generation, opting instead to focus on their own financial security and well-being.
Considerations for Child-Free Individuals
Child-free individuals may need to rethink traditional financial planning strategies and focus on building a cash cushion, planning for long-term care for aging parents or relatives, and potentially spending down savings to pursue personal passions or educational opportunities later in life. While child-free adults may not be part of the “sandwich generation,” they may still bear caregiving responsibilities for aging family members, requiring careful financial planning to ensure their own financial stability.
Implications for Economic Growth
The decision to have or not have children has broader implications for economic growth, productivity, and wealth distribution. Brett House, an economics professor at Columbia Business School, highlights that choices around parenthood impact employment, wages, and overall economic prosperity. As such, decisions about parenthood are not just personal but also have significant implications for policy makers and businesses.
Political Discourse Around Parenthood
The topic of parenthood has even entered the political arena, with discussions around family values and policies becoming points of contention among political candidates. Ohio Sen. JD Vance, the running mate of former President Donald Trump, made headlines when he criticized key Democrats, including Vice President Kamala Harris, as “childless cat ladies.” This comment sparked a debate about family values and the role of parenthood in political discourse.
In conclusion, the decision to be child-free can have profound financial implications for individuals and couples. While there may be societal stigmas attached to this choice, more young adults are opting out of parenthood for financial reasons. It is important for child-free individuals to consider unique financial planning strategies that align with their goals and priorities, and to recognize the broader economic implications of decisions around parenthood.