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The cost of children

The costs start before birth, in extra doctor’s visits (and anti-emetics) for the mom-to-be. They spike during the hospital stay and remain high through the diaper-and-baby-food stages, the ever-larger clothing, the field trip money, and eventually college. Kids are expensive; the cost of a child born this year and raised in the Midwest: $183,510, not including college, according to this calculator. And they give an extremely poor interest rate. Financially speaking, having children makes no sense. So why do people do it?

Common wisdom is that children make you happy. But psychological research indicates that’s not true; as described in this Newsweek article, childless couples have the same amount of emotional wellbeing as people with children and tend to be more satisfied with their marriages. Children offer companionship, but so do spouses and pets. Children, in fact, seem to come with no other rewards and some serious drawbacks: the sacrifice of time and self-identity, the additional responsibility, and especially the pricetag.

With that said, however, most people have or plan to have children, even though they can’t specifically say way. This Plain Dealer article describes the attempts of semester after semester of college students to figure out why people should want to have children. They fail. But chances are, most of them went on to have children. I plan to have children, even though I know my life would in some ways be richer (literally and metaphorically) without them. Why?

Since there’s no rational reason to have children, the answer lies in the irrational: in our biological roots. It’s likely that having children is an instinct buried so deep that we don’t recognize it as an instinct, the way we automatically look toward sharp movement or loud noises, but we obey it anyway. Part of the definition of natural selection is that traits that enhance an organism’s chance of passing on its genes tend to spread in a population. What trait would enhance those chances more than the tendency to want to have children? By definition, a species that didn’t have urges towards procreation would shortly be wiped out. Humans have spread out over the globe not just because of our tools and our intelligence, but also because of our population.

It is a fact that the best decision, financially speaking, is not to have children. But that’s not what most of us will do. And that’s a good thing. It’s healthy for us to want things other than riches, healthy to know that there are important things in life other than money.

Cooking versus eating out

Which is cheaper, eating out or staying in? Common wisdom says eating in. Take this article, for example, in which the author conducted a fairly controlled experiment, eating out one week, cooking at home the next (with the potentially confounding factor of a wife eager to vindicate eating out). The results: the week of restaurant dinners was $257.08 and the week of (fancy) home-cooked meals was $148.14. Likewise, this post breaks down the cost of making the equivalent of a McDonald’s $1 cheeseburger–and finds that it is slightly cheaper to make your own.

On the other hand, there have been many attempts in recent years to show that eating out can be cheaper, or at least no more expensive, than eating in. For example, when you’ve got small children and go to the right restaurant, it can be a fairly economical proposition to go out instead of cooking–especially when you consider that you don’t have to do the dishes. And if you dislike cooking to the point where you feel the need to charge for your time spent cooking, then cooking is probably the more expensive option.

So which option is better? This question can’t be answered without an “it depends.” If you consider money alone, cooking at home is by far the better choice (especially if you don’t go in for things like aged parmesan cheese, or caviar, or steak three times a week). If you consider your time as too valuable to be spent cooking and charge anything over around $20 an hour–and you’re not cooking for many people–then the restaurant may be your best value. Personally, I enjoy cooking, so the time is not a factor for me; I even consider it a plus because I get to indulge in an activity that makes me happy. But if you despise cooking so much that you’d be living off of boxed kits and frozen pizzas if you ate at home, it may even be in your best interest health-wise to go out to a decent restaurant or a healthy carry-out place.

As in so many other aspects of personal finance, value is not as concrete as money, or time. The value you place on various things in your life will color your perceptions on what the best things to do with your money are. This can be important to remember when you’re considering your budget or your investment options–or your dinner choices. The frugal choice may not be the one that makes you happy; and unhappiness costs more than most of us can really afford.