Animal Spirits Podcast - The Economics of Parenting (EP.165)

Episode Date: September 4, 2020

On this episode we discuss the finances of parenting from what you need to buy, how to prepare yourself financially and emotionally, the cost of daycare, saving for college, teaching your kids about money and more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain position. and the securities discussed in this podcast.

Welcome to Animal Spears with Michael and Ben. Today we are going to be talking about the economics of parenting. I get questions about this one all the time in terms of how do you teach your kids about money, how do you prepare financially for kids? And this is one of the harder topics, I think, to figure out because, first of all, do you think you can ever be truly ready financially to have kids? No, but I think like, at least, For me personally, mentally and emotionally, my wife sort of had to twist my arm.

I was, too, how old was I? I guess I was 30 maybe, 31 when we started talking about having kids. And at that point in my life, I was just in such a great space, like just complete freedom to do whatever I wanted on a Friday night. and I just wasn't really excited to give that up. And so I was just basically like, fine. That's about the time we were too. And I think probably for most people, young people these days, in the past it was much, much younger that you start.

Now I think it is the early to mid, even late 30 sometimes for people pushing this decision back because people are going to college and school longer. To be financially ready, it's not even in the cards for most people in their mid-20s. It's so far into the future. You can't even begin to come close to afford it as you're just beginning your career. And the stuff that people have to deal with today, they did not really have to deal with in the past. There are so many more costs involved today that people didn't even have to consider in the past. And we're going to get into some of that too. Is there anything before preparing to have a kid

that you did? So like one of the easy ones for me financially was getting life insurance. You did that before? I'd set that up right before right as my first was being born. So I went I got term life insurance, which I think is probably the easiest one for most people. I think a $500,000 policy costs me $20 a month, something very simple like that. I think that's maybe one of the first financial steps you can take when you have a kid is just preparing your household financially in case something, whatever go wrong. It's a weird thing to think about, but I think that's kind of a layup. Yeah, it's dirt cheap.

I think it's like three, depending on ratings, everything, $300, $400 per million for 20-year term. Right. People, I think, try to get into the other life insurance stuff. As far as I'm concerned, keeping it simple and using term is probably the easiest way to do it in the least complex and cheapest and all that stuff. Let me just give a quick anti-plug here. When I started the life insurance company, I had no idea what was going on. This was 2008, 2009. And the straw that broke the camel's back for me was a book called Bet on Yourself, I think, where essentially what you're trying to do is just don't put money into anything except for a whole life insurance policy. And in 2008, you could imagine what an easy sell that was, comparing the dividends of this

policy versus the stock market volatility. If you have funded every other bucket that can be funded from retirement accounts to you name it, after your fourth rental property, if you want to get a whole life insurance policy, by all means. And I assume for young people, we're not buying whole life insurance policies for estate issues. So simple terms. term is more than adequate. Yes, that kind of stuff gets into complex financial planning topics. And if you don't have an expert who is guiding you and not just a salesperson, that's a really tough thing to go through. So you talked about how at 30 you guys decided to do it and let's make it happen. So we did basically the same thing. And the problem for us is you make a plan and God laughs type of thing.

We had it all planned out and my wife is planning the month's things and well, what if we want to have a baby in the summer or the spring. And so she's planning it out perfectly. And then we realize, wait a minute, this isn't happening for us. And months went by and months went by and it wasn't working. And it's getting very stressful, especially for my wife, because at that age, you've already gone through the wedding season and all your friends are having babies and you hear about it all the time. And you hear from people that go, geez, the first time we tried, we had a kid or we weren't even trying and it happened. And to state the obvious for the woman, it's much more tangible. They wait every month and it's like just the disappointment must build and all the emotional

mental stuff that goes on with it. Like for men, it's it's not as grueling. Oh, yeah. Yeah. For them, it's 10 times worse. And so we went through where we probably tried for, I don't know, nine months. And my wife finally talked to her doctor and said something obviously isn't working. So we had to go see fertility specialists.

And so again, your plans are already just squashed at that point. You know, well, we're going to have a baby in the spring. So should we have it in July or August because you're planning and obviously that doesn't work. This is something that neither of us knew anything about going into. And we saw these specialists and had all these tests done. And eventually it was recommended to us that we need to go the IVF route. And we were like, what is this entail? How does this work? We had no clue what you're getting into. Before you got to that part of it, does insurance cover everything, all of these visits? Here's the problem. Insurance covers nothing as far as infertility.

It covers your checkup to figure out what the problems are. But once you get into IVF, it does not cover anything. So Fortune did this piece on IVF called the fertility industry, and they did some numbers of it. They called it inside the big business of baby making. They made the point that the reason that this is so confusing to people and misunderstood is because it's still such a new field. People haven't really done it before. It's still pretty new. And so they talked about the fact that this Piper Sandler research firm says that the U.S. fertility market will be a $15.4 billion industry by 2023, up from $7 billion in 2017. Is this all private practice? Yeah, so this is private practice and a lot of them are mom and pop fertility clinics. And they actually said

private equity firms are now buying up because these are high margin businesses. So we get into it and we don't know what to expect. We don't know how it all works. And it was honestly one of the worst periods of our life we ever had to go through because it took probably, I don't know, three years from start to finish. And it cost a lot of money because so they say in this fortune piece, they said the average IBF baby costs $40 to $60,000, which comes out of pocket. So I think there's a few states that will cover a little bit. But ours was in Mississippi. Michigan completely out of pocket for us. How do you pay for that?

The sad thing is we had just refinished our basement at our house, so we had just completely drained our savings. It took so long, we were using like 0% credit cards. So our all-in costs over three years was probably 80 to 90 grand. I mean, it was a ton of money. How did you literally pay that off?

Was it over time? Yeah, we paid it off slowly, and it took some time. And honestly, we got some help from family too because it was such a big burden. And then you go into that and then you spend all this money and then eventually you have the kid and you realize like, oh, preparing for a kid is impossible not because we just spend all this money. So it's a really difficult process because you don't want to tell anyone about it because you want it to be a surprise for people. But then if you're going through it, so the woman in the situation, you have to do like these daily hormone shots.

And then in the morning, every morning before work, my wife would have to go into the doctor's office and they test the levels. And we tried, we had probably six or seven times we did it where it didn't work. We got really discouraged and we're like, this is never going to happen for us. We changed doctors at one point. We even went through the adoption process because it didn't work. My wife, you get this thing where they give you so many hormones, you get too hypersensitive to it and you get sick. So my wife got really sick.

So we like took a year off and went through the adoption process and that didn't work. So anyway, it's not a sob story because in the end it worked. And after we had our first child, all those feelings went away. but it took like three years for it to work. And we spent a ton of money. We switched doctors. We tried six or seven different times before it finally worked. And then even when you get the positive pregnancy test, you think the whole time like, okay, well, this isn't going to stick because we've had so many failures in the past. But once you go through it, you realize like there's a lot of other people that have gone through it. And anyone with twins these days has probably

gone through it. And we have twins. So yeah, it's full for us the second time around. And then you have to pay for the storage of this stuff. Financially, obviously, it's terrible. And I want to talk about it because for people have to go through it, it's a really eye-opening process. But the cost emotionally are way harder because you don't want to tell people about it because then they're constantly asking. And so it's a really crazy process to go through. But then again, once it was over, like all that was lifted and it was just completely gone. So they talk about in this fortune piece about how 2% of babies born in the U.S. are born via IVF, which is one of the lowest rates in the world. And they said in Denmark, that figure is approaching 10% because in

Denmark, the state pays for it. Whereas here, you're on your own. So they're they say a lot of people probably would go through this process, but don't because they can't afford it, because it is really expensive. What a cost here compare with costs in the rest of the world? Did you see anything about that? They didn't say they just said the average IVF baby costs 40 to 60 grand, which again, it's probably reasonable. I think if you did it, your first shot, you could probably get through it in, I don't know, 15 or 20 grand, but for a lot of people, they say it takes at least two or three times on average. And after going through it, you talked to a number of people who went through something similar, and it's a weird thing, but

Especially for the woman going through it, it's a really, like, lonely period and tough to go through. But, yeah, and then we did it. And then we completely forgot about it, basically, after the fact. I was on the other end of the spectrum. For me, it was the first time, both times with both of my kids. So you get through that, and then there's the immediate cost of, do you want a private room in the hospital, for example, which is, I forget how much that costs. I don't know, four or five hundred bucks a night, maybe. Did you have to pay extra for that?

You decide on that? I don't think we had to decide on that. Yeah. If you want a private room, at least in the hospitals that we delivered in, it was, I believe, $4 to $500 a night. So then you have the baby, and assume it's your first baby, you have absolutely no idea what to do. Boy, what a weird feeling that is, isn't it, in the hospital? I'll just say it. I was drunk when Kobe was born. Because we thought that it was going to be our last dinner out before he was born. He was, I think, three and a half weeks early. So we went out to dinner.

I had probably two or three margaritas. And I remember I was in bed. It was like 10.30. I was watching Bill Maher. And Robin just like leans over. And she goes, we got to go. She goes, take Bianca out our dog. So I took her out.

I immediately got sober. The adrenaline allow us like just completely squashed it. Yeah. What a buzz kill, man. Yeah, right? Total bummer. So anyway, we got to the hospital. at 1159 and he was born at 1.30. So it was like a super quick delivery. Ours took well over 36

hours at first time. Wow. Your poor wife. Yeah. After, yeah. It is funny, though, how different your path can be. And it's just like a roll the dice, basically. So you have a baby and now what? So what we did the first time was we got a baby nurse to come home with us. And I believe that's in the neighborhood, at least in New York, of $200 to $250 a night. So what do you think you spent out of the hospital. I think our take home for the hospital for each one was probably in the $1,500 to $2,000 range. Yeah, that sounds about right. So you've got that plus for us, we had the baby nurse. So just right off the bat, and I think we got some help with family for that. But right there, you're talking in the first two weeks, you're talking $3,000 to $4,000.

It could be zero if you don't have a private room and you don't have a baby nurse. Obviously, we're fortunate that we were able to do these sort of things. But that's right off the bat. And then, of course, before you have the baby, you got to go to the baby store. Is that the right word? You got to go get a stroller. You got to get a bassinet. A stroller is like a freaking car. I think our stroller was like, I don't know, $1,000.

Strolls are pretty expensive. And you want to get a good one because you're going to use it a lot. Crib, clothes. I mean, you hope some of it you get through a baby register. We actually, my hack on this one was if you sign up for a baby registry on Amazon so people from out of town can get you stuff, after you're all done, the stuff that you don't buy, you can put it all in a basket and Amazon gives you 15% off of everything from that. So even if no one ever bought anything for your registry, you could sign up for all

this stuff on Amazon you didn't get and then get a one time 15% off from there. So then I feel like in the first year, there's not major expenses. Like, what are you really spending money on formula? Yeah, don't you think that people talk about, well, kids are really expensive at first, but you're also cutting back on your own personal expenditures as well. So I think it does balance out a little bit. Obviously diapers. All right.

Diapers and formula. The other Amazon piece, which, because you're going to be busier and staying at home more, we put everything we could unsubscribe and save. The diapers and the wipes and the lotions and the baby shant, all that stuff, if it just comes to your door once a month, especially when we had twins, the second time around. Just so we didn't have to constantly run to the store, that made our life way easier just to have this stuff come in constantly so we didn't have to think about it. How much does a vasectomy cost, by the way? I assume insurance covers that. I haven't done that yet. Yeah, I don't know.

Once we had twins, we definitely threw the C-section, got my wife's tubes tied. So we're good. I mean, obviously, the other biggest one that you don't think about, and this was another sticker shock to me, was just daycare. Right. So that's the next one. So when did you send your kids to daycare? Three months.

Wow. I believe. Yeah. So my daughter and then the twins, too, at three months, and my wife went back to work, she had her three-month leave. This is the toughest decision. This is something people in the past didn't really have to plan for. We'll talk about us in a second.

But what about emotionally letting go of a three-month-old baby? Oh, yeah, it was tough. I had to do it. And I noticed a lot of the people doing the drop-off were the dads. And I thought, that's kind of funny. Maybe it's just because of the work time. But I think it's harder for the mom sometime. My wife made me do it the first day.

And it was tough for me, too, just to do it. Everything worked out, and ours worked out great, and we're happy we did it. But it's a tough decision because you're either paying a lot for daycare or someone is cutting back in their career to watch the kid. I mean, unless you have family, which a lot of people these days, That's a perk a lot of people don't have, the grandparent or someone to watch the kid. That's a tough decision. So I looked at the number from BLS and they had the percentage of people who are dual income families.

And it's like 40% of the population. I don't believe that, by the way. I don't believe this. It says 49% of married couples, the husband and the wife, work. Why would you not believe that? It's from the BLS. I don't believe it. I think that's way low.

Well, okay, here's the other thing. 18% are not fully employed. So that means 20% of the people are either unemployed or retired. So take that into account. So right there, you're talking about... Retired. This is everyone. They're saying 20% of the people aren't employed at all.

So when you take that 50%, take that 20% out. So now we're talking 50 out of 80. So we're talking... All right, fine. So we're probably talking more like 65%. So there we go. So Pew Research, scroll down, Pew Research has dual income is, at least this was back in 2012, was 60 percent. It was only 25 percent in 1960. For example, when my parents were married,

my mother didn't work. And I feel like that was pretty common growing up. Then when my parents got divorced, she did work. But I feel like that was pretty common. That's not true. I know people, I know plenty of people whose wives don't work. But I feel like 60 percent sounds about right. Yeah, that makes sense. And so either someone's giving up their career or you're paying a lot for daycare because a lot of people need those dual incomes. And maybe they need the insurance from one of the jobs. Yeah. So it's a tough decision. And that's why like anyone who judges that decision on someone else, I'm not a big fan of because it is not easy. And luckily, I mean, for us, you get those comments from some people who say like, oh, you're going to let someone

else raise your child or whatever. And those ones always kind of sting. But it's like, what do you call school then? We've had a great experience at daycare and like socializing and our kids have found friends. My daughter is still friends with brother and sister twins that she's been in daycare with since three months old. Six years old, they're still friends. We love daycare in Brooklyn. Daddy daycare. Love you. But let's talk about how much it costs. Holy moly, it was so much money. So the national average says $1,400 a month, which I'm sure for you in New York is probably on the low end in big cities. So I think for the first year, it was, so we sent Kobe. So Kobe was born in February. Robbins is a teacher. So she didn't work.

It was perfect. She got March, April, May, June off, I believe, or something like that. So anyway, she didn't go back to school until September, which was amazing. So we didn't send Kobe to daycare until he was six months old, which was fantastic. But when we did, from six months to 12 months, I think it was like $2,000 a month. Now, of course, that's after taxes. And the tax break you get on this is so tiny. Yeah, it's a drop in the bucket. So $2,000. And then once he turned one, the cost went down to, I don't know, $17, $1,800 a month. Yeah, they go down a little bit because the number of teachers you need per student goes down as they get older.

Yeah, I think ours is probably starting off $1,200 a month for Libby when she started. And then at one point, we had overlapping where we had twins in at the same time and Libby for over a year. And I calculated back of the envelope. Our kids go to right around age five. We're probably spending from three months old until kindergarten, $150 grand on daycare. I mean, if you tell this to someone in another country that has it paid for, they look at you like, what is wrong with, and maybe the tax breaks I got were a few thousand

dollars over the course of that period? So this is why I am a big advocate of, I think it was Derek Thompson who wrote about the fact that, listen, we pay for public schools. Why can't we just extend that down a few years and to the people that need it most are new parents? Now, you and I are fortunate. We were able to pay for these things. But like, I don't know how a lot of people living on a certain income do it.

You spent $150,000. Now, the good thing is, like, once that bill comes off. I guess it goes into other things, but not really. I mean... Yeah, we're using public schools, so that will go away, but... That's going to be a big tailwind. So some people don't go the daycare route, they go the nanny route. Right. That's more expensive. I think daycare works out, too. I forget what it is. Between $8 and $12 an hour, does that sound about right? Yeah, I guess I've never done it per hour, but that sounds about right.

If you get a nanny, it could be, I guess, $15 to $20 an hour, depending on where you are. Some people choose to go that route. It gives you, whatever. There's tradeoffs, obviously. did that with Logan, the one-year-old, because we don't really want to send a one-year-old to daycare right now. Not that we're like super, super paranoid about COVID, but he's only one. He's not really missing out too much on the socializing thing. Obviously, Kobe's three and a half. He needs to be in school. So that is another additional expense. There was a study done, and they looked at from the 1970s to the 2000s. And they said per child spending has doubled it from the 70s to the 2000s. But

childcare grew by 2,000% in 40 years in that time. So from the 1970s to the 2000s, it's grown by 2,000% by an increase by a factor of 21, over 40 year period. Why? Well, I'm guessing a lot of it has to do with the fact that it's become more regulated. You need

more teachers for that because the student teacher ratio is higher and it's all privatized and they have to make a profit. That's a problem with not making it part of a public school. These places have to make money, too. I was just thinking about this. So we got some really kind of nasty emails about us suggesting that we extend school down

for babies. Yeah, there's always people who say, I don't want my taxpayers paying for your daycare. Right. It's like, guess what? Your taxes are paying for school. Right. And what about like we take care of older people via Social Security and Medicaid, or Medicare, I should say?

Parents need a bigger tax break on this stuff. So that's definitely one of the things that you're going to see is the biggest sticker shock as a new parent is daycare. It is just, there's no way around it these days. Either you lose income from someone who's not working and takes a back seat or you're going to pay a lot for daycare. Those are the only two options unless you have someone, a family member who's willing to step in. So you are either in an apartment, let's just take me for example. I was in an apartment in Brooklyn, 800 square feet, and that's probably being generous.

We have a 65-pound dog, a one-year-old that's all over the place. Didn't you also not have an elevator? I was on the fourth floor, walk up, correct. And now my wife says, we're pregnant. So immediately it's like, okay. By the way, I know you didn't say this, but that always makes me laugh when the guy says we're pregnant. Yeah. I think that's something that you just can't say that, right?

Like, you've never said that going through this, did you? You said she's pregnant, not we're pregnant. Just making sure. I don't think I ever said we're pregnant. Okay. Just putting it out there. So immediately it's like, okay, well, I guess our plans for leaving got sped up because... Yeah.

So then it was like, okay, now we got to buy a house. And in New York, it's so stupid that it just so happens that our house basically costs what our apartment did. But I would assume in most cities and suburbs that moving from an apartment to a house is a big financial consideration. Did you ever live in an apartment? Yeah, for probably six or nine months after we got married. And then they bought it and turned it into a place that they were going to. to sell them, so we got booted out and bought a house. But when we had twins, our old house was not big enough for twins. We obviously never planned on having twins. And probably getting back to the

IVF stuff, the longest week of my life, they test you right away to see if it worked or not, because they can tell with your hormone levels. And they give you an ultrasound at like five weeks, which is still way too early. On the way to the ultrasound, my wife said, something doesn't feel right. I feel like we had multiples, because multiples is obviously when you go through IVF, it's a possibility. It's a big possibility. And I was like, you're crazy. And we get there and they say it could be triplets. And they said, you have to come back in a week until we can measure the heartbeat. They said it could be triplets or twins or one. We don't know. I remember you telling me this. Longest week of my life. And honestly, going from having triplets to twins actually was kind of a blessing because

it was a sigh of relief because triplets would have been. I think the word that we used was devastating. After the ultrasound, she probably wouldn't want me to say this, but my wife said, my life is over. I, to break the tension, cracked a joke. Did not go over well, right? No, no. What did you say? I don't even remember. I said something about how are we going to come up with the names now and just didn't go over well.

So anyway, with Twinsie, when we ran out of room for our old house, and for the first month, we had to have our twins in like a study. Within one month, we had twins, and then in that same month, we moved to a new house because we ran out of room. So, yeah, you're right. For a lot of people, kids pushes that decision. decision if you run out of room or need more space. And obviously that moving is and spending more in a house is part of it. So hopefully we're not completely talking people out of having kids at this point. But these are all things that you have to consider, right? The show is not called the joys of having kids. It's the economics. And there are plenty of joys, obviously. Yes. And honestly,

the economics of it, to me, don't even matter that much. Isn't it something that you just kind of roll with and deal with? Well, wouldn't you say that we're like financially fortunate to be able to say that? Yeah, yes, that's true. Don't you think, like, the number one cause of divorce is probably financial considerations? Yeah, honestly, adding kids to the mix. Makes it way worse? It adds a lot.

I mean, and I've heard from a lot of people saying it can make or break your marriage as well. Sometimes it brings you closer together. Sometimes having kids is so stressful, it can push you apart. How about you know the couples that have sort of, they say that they're having kids and you're like, oh. Yeah, right. Yeah, yeah, that certainly happens. Obviously, on top of this, after going through daycare and everything, you think, how am I ever going to save for college? You buy Tesla.

I guess so. Hopefully by then, Tesla will be driving them to school and they won't have to live there, maybe. So, J.P. Morgan had this really good report on the cost of college, and the numbers are insane. So they looked at the price changes since 1983 for apparel and cars and coffee and then tuition. And apparel is up 27 percent since 1983. gas is up 124 percent. Housing is 170. So these things have more or less kept in line with inflation. Medical care is up 400 percent. And then tuition is up 798 percent, an annual increase of 6.3 percent. So especially with us with little kids, how do you ever plan for that eventuality?

Do you just save what you can and hope you can help as much as you can if my dad said they've been talking since the 1990s that there's no way this can keep up and it still has? In my opinion, it's very easy. You do what you can. Yeah, I think that's it, right? But what do you think about? It's hard because you never want to ask someone to choose for themselves with their kid. But the personal finance rule of thumb is put your mask on before you put your kids on. And so save for your retirement and don't delay retirement saving to save for your kid. Do you subscribe to that feeling as well where you take care of your own finances first? And that way your kid is not taking care of you later. And if you

can't help out with college, then so be it. Generally speaking, yes. I think there's some nuance involved. Like, for example, I mean, this is an extreme. If you're not contributing to your 401k and you're putting money into your kids 529, that's obviously, don't do that. Right. This surprised me too. So they talked about how families who don't have enough saved. So the average debt from the class of 2019 was 29,000 for the student. That was the average debt. For parents, the average debt was 37,000. And it's increased 38% since 2015. I didn't realize this that so many parents actually are coming out with so much debt because of their kids. So not only are they saving for college, but they're also like footing the bill.

Well, I'm guessing a lot of this is parents who didn't, but they're trying to foot the bill anyway. So they're going into debt personally. And at that stage in life, I mean, it's one thing to not save for retirement when you're young and save for college. But if you're taking on more debt at an old age, I mean, that's the time when your kids go to college and then go on their own, that's the time where you can hopefully supercharge your retirement savings if you've put it off because now you have the kids out of the house and you have those expenses and hopefully they're off of your payroll. So that's a tough situation to be in. And honestly, I understand why parents do that because you don't want to scrim for your kids. You want to give

your kids everything and more. And that's why I understand how so many families have a hard time saving because good luck to say no to your kid if they want something. I definitely understand why it's so hard for people to save these days, especially if they have children. Here's my spiel on 529s, though. I calculated some numbers here. What you invest in over that, that 18 or 20 year period, say you're starting from day one. I opened up a 529 for all my kids right and they were born. Your savings rate over that time period, even though it could be two decades, matters more than your investment returns. So I looked at it. I looked at the numbers. So if you were to double your savings rate from 10% to 20%, percent of what?

Of your income. Obviously, these are high numbers. And I looked at these for retirement, but I'm mapping them on to 529 savings. You would have a higher balance after 20 years doubling your savings rate, then you would doubling your investment return from 6 to 12%. Okay. So the whole point is people worry about what should I put my kids' investments in. Obviously, you still need some growth, but the only thing that really matters if you're saving for college, the thing that matters the most is your saving rate and how much you put aside. Right, because you don't have 40 years to compound, but what do you think is a realistic number? For saving? Yeah. I tell people to start small. I think it probably depends on your income. Definitely. I tell people to always start small because just getting started, it allows you to

slowly. So start with $25 a month, $50 a month, whatever, start small and maybe work your way up. Do you think that it is bad form to ask family members for $529 contributions as a gift? I may or may not have done this in the past on a tongue-and-cheek manner. No, no, no, not at all. What do you mean, like for a birthday present? Yeah, birthday or Christmas or whatever. And I've said, and I've kind of been joking, but I think the grandparents have taken the hint on this one and done it because, listen, our kids have a lot of toys, give them a contribution to their 529 instead, or do half and half or whatever. I don't think that's that big of a deal, right?

No, not at all. I subscribe to that. What are some unexpected costs that arise from having kids? So, like, for example, I saw a great tweet the other day. I'm sorry, I forgot who tweeted it, but it's so true. I never thought about this. It was something along the lines of having kids, I never realized how much I would spend on berries. And I was like, huh, we spend so much money on blueberries, blackberries, and strawberries, whereas previously, I never had them in my house ever. Yeah. One of my favorite things we've bought that I never would have thought of being so excited for is just a cordless vacuum. We must put 100,000 miles on one of those a year. We clean the same room in our house seven times a day. So I think the cleaning stuff is definitely important.

You have to have those, what are they called, the magic erasers. The Johnson and Johnson things, those are great. I got a Roomba. I think I spoke about this one time. The wireless vacuum that robot, that thing is amazing. And it works for us because we have flatwood floors. My biggest one for when they were newborn and you're constantly rocking them to sleep is the Kindle paperweight because you can dim the light and read at the same time without waking the baby up. So I like that one for what other, let's see. I mean, obviously, our house is always full of Cheerios, which means your car is. I would say, here's a good piece of advice. Don't buy nice furniture or a really nice car that you're going to want to keep clean because

you will never keep it clean. I have Cheerios and goldfish everywhere in my car, couch, all that stuff. That stuff is going to get ruined. Speaking of reading, one of my fondest memories, maybe I'm skipping ahead here, one of my fondest memories was I read to Robin and Kobe when he was born, now that he could understand, obviously, but I read the Michael Lewis book, Home Game, and accidentally got to fatherhood. Okay, I have that one on my list, too. Did Courtney read that or just you? No, just me.

But I actually pulled some of the quotes from that. So, I mean, he's obviously tongue-and-cheek here. So what he did for that book... I laughed out loud multiple times reading that book. He did a journal for his first two kids, the first few years of their life, right? And then he put it into this book. And he says, memory loss is the key to human reproduction. If you remembered what new parenthood was actually like,

you wouldn't go around lying to people about how wonderful it is, and you certainly wouldn't ever do it twice. Wait, let me just piggyback on that. When we had Logan, the first night, we lie down at like 9.30 and we fell asleep. He started crying and we woke up. I'm like, what time is it? And she goes, 10, 15. And I said, I was just like, oh my God, I completely forgot about this, that babies wake up every.

The first three months of our twins being born, it's basically, I blacked out, I think, because we had like schedules. We had the grandmothers stay over to help. feeding schedules a night and sleeping schedules, it's just like a blur because it was so crazy. And then you just, you do it. What are the quotes you got? Let's see. So he says, oh, this is good.

He's talking about like people selling stuff to new parents. He says, if you have a gift for frightening new parents, your fortune in the world is secure, new parents are not rational. They worry about all sorts of things that make no sense to worry about, which is talking about, like, how you can basically get new parents to buy anything. This one is perfect for me right now because we have twin three-year-olds. He says there's no such thing as equilibrium in a room full of toddler or something bad is always about to happen, which I thought was perfect. And this one, this is kind of more

about a deep one. So he says, it's astonishing how much trouble we take to prevent our children from seeing the world as it is. And I struggle with that too. That's going to be harder for me than anything is seeing kids go through and have other kids tease them or bully them or have their heartbroken. And when they're older, I can't even imagine that. But like, that's the stuff that that's life. You have to go through that stuff. My favorite quote on fatherhood comes from Tom Hanks. He gave a long interview to the New York Times last year. I said that If you gave me three weeks to write something about parenting, I couldn't have done any better than this. These words came out of his mouth, just off the cuff, which is just insane. He said,

it isn't easy being a parent, not for any of us. Somewhere along the line, I figured out the only thing really, I think, eventually a parent can do is say, I love you, there's nothing you can do wrong. You cannot hurt my feelings. I hope you will forgive me on occasion. And what do you need me to do. You offer up that to them. I will do anything I can possibly do in order to keep you safe. That's it. Offer that up and then just love them. I would read a parenting book from Tom Hanks probably. I'd listen to a podcast. Yes, exactly. So one of my favorite ones that we're getting to the agent on my daughter's six. She's starting to understand money a little better. We're trying to slowly work her that way into her. One of my favorite books on this is called the First National Bank of

Dad by David Owen. I think I've mentioned it before. And he talks about his whole process of going through allowance and this stuff with kids. I'm still trying to learn. I haven't figured out what the best way to do that. He talked about how getting kids to save, he said to a kid, long term does not mean long term. It means never. So he said the only way to get kids to become savers is you have to give them like selfish reasons. They have to arrive in right now. And so he said, if you give them control over their savings in an attractive rate of return, they'll save by themselves. So he gave them like a huge payment back in their savings to force them to save. Otherwise, it wasn't going to act like 50% or something ridiculous. So obviously

there's no federal reserve of parenting. But he also said this was interesting. He talked about how linking a chore to an allowance turns the chore into a job and that creates the possibility that the worker might someday decide to retire. So he's saying, don't pay your kids an allowance for doing the chores. Make them do the chores regardless. Pay them an allowance regardless too. So you don't tie to the fact that if they saved enough money and they said, well, I don't need to do chores anymore. I'm trying to think through all that stuff because my daughter's getting to the age where that stuff is going to matter. Yeah, I haven't gotten into that stage yet, but that sounds good. You've also recommended in the past the Ron Lieber book.

Yeah, it's called the opposite of spoiled. And he talks about breaking it up into not only saving and spending, but also giving and showing kids the beauty of generosity. He also talks about the fact of when kids ask questions about money, don't ignore them, but figure out a way to talk to them about it. That's a weird thing if you tell your kids, oh, I make X amount of money per year. Obviously, that's not the right conversation to have, but figuring out the right way to show them money, like my daughter at six years old is already asking, how much does an iPhone cost?

and when can I get one, in trying to put those things into terms of how much it costs and being responsible or something like that, that's still something that I'm trying to wrap my head around. All right. I think I'm out. Anything we missed, Ben? I don't think so. Again, we're not trying to tell people to not have kids, but I think you have to go into this with your eyes wide open, that there are decisions and tradeoffs and it's not as easy as it sounds financially. But obviously, again, all the financial stuff goes way down the list when you first have them in your arms and that stuff just immediately melts away and you don't even care anymore. Because the cost is quantifiable, but the joy is infinite. How's that for a

deadline? Yes. One of the best pieces of advice I ever got from a friend who you always get a lot of friends. And this seems to be especially true of the guy in this deal who will say like, oh, your life is over. You'll never get to do what you want again. And I had a friend who told me who already had a kid when we were waiting for our daughter to be born. Nobody wants to hear that. What a jerky thing to do. Yeah, but that's the kind of thing people say. And one of my friends said, you know, anyone who tells you that is probably a shitty parent. Yep.

And a lousy person. I'm surprised. I was worried that my life was going to change, but I was always shocked how little I cared about my life changing. It was almost like a welcome change to me. Same. Yes. Or how about like, oh, you'll never sleep again? And it's like, all right, big deal.

So you're going to have lousy sleep for a few weeks, maybe a few months. Right. And that didn't bother me. Luckily, my wife and I had a good deal where she's a morning person, I'm a night person. So we had a pretty good trade-off there. And then to state the obvious, is there anything better than coming home, opening the door and having the kids run up to you and daddy and hug you? Yes. Yeah.

I don't want to figure out when that's going to go away. But as of right now, can't put a price on that. All right. Thank you very much to Advice. We'll link to their video on the show notes. Thank you to everybody for listening. We're doing one more of these in two weeks. I forget what the topic is. Ben, do you remember what the topic is?

We're still debating. Okay. All right. We'll see you on Wednesday. Hope everybody has a really, really enjoyable Labor Day weekend. Thank you for listening. Animal Spiritspod at gmail.com.