Does the cost of children actually go down once the daycare comes off the books?

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Van Down By Da River
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Does the cost of children actually go down once the daycare comes off the books?

Post by Van Down By Da River »

I currently have 2 kids, age 3 and 5, and one of them is starting kindergarten in a few weeks, with the other starting in two years. While we are super excited about our $30,000 annual bill (for both kids) finally coming off the books, I keep hearing parents tell me that their kids keep getting more expensive every year...

I guess, my question is, should we plan on having a huge financial windfall? :moneybag :sharebeer

Or does the savings from daycare just end up getting eaten up by new expenses (after school care, extra curricular activities, Nintendos, etc.) :annoyed
Grt2bOutdoors
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Grt2bOutdoors »

No, it will get chewed up by other expenses, so save that extra cash flow.
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playtothebeat
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by playtothebeat »

Going through the same myself starting this month, but I would say “it depends”. Is your kid going to be active in after school programs, sports, etc? If he/she is doing club sports, those aren’t cheap even at the young age!
Our kindergarten here is only 3 hours a day, so we’ll be paying for before or after school care — while slightly cheaper than current pre-school costs, it’s not such a huge difference that I all of a sudden have a material amount of free cash flow.
dbltrbl
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by dbltrbl »

No. It goes up. Even if you use public schools it goes up.
GCD
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by GCD »

Assuming you want to pay for college, you will need to save a chunk for that. How deep you want to go into athletics is up to you, but it can get costly. My kids are just starting to drive and there is added insurance for that.

I would budget assuming no price break and be happy if you come out a little ahead.
CeeKay1729
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by CeeKay1729 »

I have kids 7 and 3.

If parents work, still have to pay for afterschool care.
Summer camps
Sports
They eat more
They can enjoy activities and new places more so you end up spending more on going out
Extra tutoring or more school help if you are into those things

Hard to say if cost will go up but it definitely doesn't go down... :shock:
SuperSaver1975
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by SuperSaver1975 »

Absolutely YES! the costs go down. My kids are 3 years apart. Once they both got out of daycare, we were able to make much larger mortgage payments, etc.
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jhfenton
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by jhfenton »

Van Down By Da River wrote: Wed Jul 31, 2019 1:21 pm I currently have 2 kids, age 3 and 5, and one of them is starting kindergarten in a few weeks, with the other starting in two years. While we are super excited about our $30,000 annual bill (for both kids) finally coming off the books, I keep hearing parents tell me that their kids keep getting more expensive every year...

I guess, my question is, should we plan on having a huge financial windfall? :moneybag :sharebeer

Or does the savings from daycare just end up getting eaten up by new expenses (after school care, extra curricular activities, Nintendos, etc.) :annoyed
We never paid for day care--let alone $30,000/year--but I can't imagine any incremental expense (other than college) coming close to $2,500/month. Our older child just got his driver license, and the incremental cost is around $1,400/year to insure the third car and young male driver. He and I went on a school trip to Spain and Morocco last summer, and that was around $8,000 for both of us. (But that was hardly a necessity.) Food and clothes and two mobile phones don't come anywhere close to $2,500/month.

We were fortunate that my mother-in-law watched our kids when they were little, and then we had half-day public pre-school (essentially what used to be kindergarten) starting at 4 and all-day kindergarten at age 5. And now they're in the best public high school in the state.
Last edited by jhfenton on Wed Jul 31, 2019 1:31 pm, edited 1 time in total.
Kensington
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Kensington »

The costs of children go down after daycare unless you choose to spend that money on other child-related things.

My childcare spending has been like this (I rounded to the nearest $1k)

2011: $13,000 (1 infant)
2012: $11,000
2013: $13,000
2014: $23,000 (1 infant, 1 toddler)
2015: $16,000
2016: $16,000
2017: $15,000
2018: $10,000
2019: $6,000

In the highest year I spent $23,000 for childcare for 2 children; this year I'm spending about $6,000, which is afterschool plus summer daycamp for two children. I certainly don't spend $17,000 more on them now that I don't have 2 in daycare. I could, sure, but that's not my style. Yours may vary.
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beyou
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by beyou »

Depends how you measure. When mine were young, DW stayed home, so no external childcare costs at all, but gave up her potential income !
So could say it cost me $10s thousands per year. In that case of course it declined. But later it rises again if you let it, which I did as well.
Sports and other hobbies, and college savings.
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batpot
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by batpot »

dbltrbl wrote: Wed Jul 31, 2019 1:27 pm No. It goes up. Even if you use public schools it goes up.
how?

Assuming are you contributing regularly to the 529 since birth, I cannot image maintaining >=$2500/mo in "extra curricular" actives through high school.
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mhc
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by mhc »

really depends. here are some expenses as they get older:

1. club sports
2. musical instruments
3. braces
4. travel
5. cars/insurance
6. college
7. hobbies
8. phones

When our kids were small, we would get a single hotel room. That worked fine. Now that they are older we get 2 rooms or suites or VRBO. This probably has doubled the cost of lodging. My kids no longer get the kid's meals. They get adult entrees. They don't always qualify for kid tickets. Our travel budget has gone up dramatically. We no longer stay with my parents or the in-laws. We have to get lodging when we visit them.
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Van Down By Da River
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Van Down By Da River »

So, basically, the cost will go down for a bit, only to get eaten up once they start getting older and getting into a travelling soccer team (which apparently is a big thing up here with the Joneses in the Chicago suburbs)

I was asking my wife last night about what we were going to do with the windfall and she just kept telling me to quit dreaming... Guess she was right....

Well, I guess I can use the gap to give me a few years to beef up their college savings :sharebeer
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Kenkat
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Kenkat »

Does the cost of children actually go down once the daycare comes off the books?

That’s funny; you’ve got a real gift for comedy my friend!

Oh wait, it’s a serious question? :happy

As others said, you may get some cost relief in the nearer term but it will start going up again at some point so take advantage of any lull in expenses so that when it possibly changes, you will be in better financial shape to handle increased costs that, in my experience, kick in again in the later grade school, high school and potentially college years.
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LiveSimple
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by LiveSimple »

get some relief till college prep and college years !!!
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greg24
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by greg24 »

My kids are 12 and 16. Our costs definitely went down.

I really question those who claim their expenses go up. I think most of them are going with feeling over hard data.

My kids played sports in local leagues. They played instruments with the school band. They had lots of activities that didn't cost all that much.

We stay at AirBNB and the like for prices that are comparable if not cheaper than hotel rooms.

Buying two extra plane tickets for trips is the biggest noticeable expense.

College will be an expense. Not sure how much we're going to help.
4th and Inches
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by 4th and Inches »

I"m quite sad to hear that it isn't a slam dunk that costs will go down significantly. I have a 1-year-old and a 4-year-old (her birthday is today). We pay $1850 a month to my mother-in-law to be a nanny for them which includes grocery shopping, no need to take time off for sick kids and any transport during the day. That is a really good deal in our area, but still $1850 a month or $22,200 a year. We will also increment the cost down as school ramps up. My wife and I keep talking about how much more money we will have in a few years. Sad.
Last edited by 4th and Inches on Thu Aug 01, 2019 8:37 am, edited 1 time in total.
Jack FFR1846
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Jack FFR1846 »

My younger son got his drivers license last week. $1k for driving instruction (otherwise insurance would go through the roof) and insurance went up $1k. He's older by 2 years than his brother and my Jeep's older now. When his brother got his license at 16, my insurance went up $2k.

All that's mouse nuts compared to college expenses. I use car costs to make it hurt less. Older son cost a Lamborghini Huracan with some expensive options. Younger son just starting and should cost far less. Probably not even an exotic, but who knows? Starting at community college.

If a parent drops to part time or to no time, don't discount the loss of that salary. We lost about $1.5M from my wife staying home.
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TxAg
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by TxAg »

Same situation as you. It'll go down a bit but not as much as I thought.
chw
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by chw »

Generally no. Ideally, saving for college as day care ends will possibly present your children with good secondary school options when the time comes, and if you are inclined to help with your children’s secondary education. Other expenses are myriad, but can easily replace day care expense. Think sports teams, medical/dental expenses, vehicles/insurance when start driving, cell phones, clothing... and the list goes on...
delamer
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by delamer »

If you are paying $30,000/year — over-and-above food, clothing, shelter, and medical care — for 2 kids once they are in school full-time, then you are doing so by choice.

There is no need to spend that kind of money on after-school care, summer camp, and extracurricular activities.
psteinx
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by psteinx »

mhc wrote: Wed Jul 31, 2019 1:42 pm really depends. here are some expenses as they get older:

1. club sports
2. musical instruments
3. braces
4. travel
5. cars/insurance
6. college
7. hobbies
8. phones

When our kids were small, we would get a single hotel room. That worked fine. Now that they are older we get 2 rooms or suites or VRBO. This probably has doubled the cost of lodging. My kids no longer get the kid's meals. They get adult entrees. They don't always qualify for kid tickets. Our travel budget has gone up dramatically. We no longer stay with my parents or the in-laws. We have to get lodging when we visit them.
This is a good list.

For us, sports have been minimal.
Musical instruments (the instruments themselves, but moreso, the lessons) have been non-trivial.
Braces x 3 kids. Also other medical costs (though you may also have those for <5 year olds).
Travel costs increase, mainly because you'll likely WANT to travel more (kids appreciate and remember stuff more when they're 10 vs. when they're 5), but also because the particulars increase (meals, hotel rooms, ticket prices).
Cars and insurance ca. age 16.
College - even with 529s, there will likely be assorted add-on costs for college.
Hobbies - yeah - electronics perhaps especially.
Phones, sure.
Probably more on clothes, too.
Probably some allowances for spending money.
Also, for our kids, assorted summer camps and activities, escalating up to some pretty pricey academic-oriented stuff when they're on the older side.
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by willthrill81 »

batpot wrote: Wed Jul 31, 2019 1:40 pm
dbltrbl wrote: Wed Jul 31, 2019 1:27 pm No. It goes up. Even if you use public schools it goes up.
how?

Assuming are you contributing regularly to the 529 since birth, I cannot image maintaining >=$2500/mo in "extra curricular" actives through high school.
Two words: travel sports.
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renue74
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by renue74 »

willthrill81 wrote: Wed Jul 31, 2019 2:35 pm
batpot wrote: Wed Jul 31, 2019 1:40 pm
dbltrbl wrote: Wed Jul 31, 2019 1:27 pm No. It goes up. Even if you use public schools it goes up.
how?

Assuming are you contributing regularly to the 529 since birth, I cannot image maintaining >=$2500/mo in "extra curricular" actives through high school.
Two words: travel sports.
+1 . OMG yes.

My kids don't do travel sports...but I have an airbnb and our town has a lot of sports venues (soccer, softball, and basketball/volleyball) where people travel here to play.

I just charged a family $750 for 4 nights during their stay for a softball tournament. They drove all the way from Maryland. Just think how much they dropped in food, gas, lodging just for one long weekend.
cshell2
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by cshell2 »

This is totally going to depend on how much you spend on childcare and what kind of activities you put them in. I did not see a big savings, but I only paid at max $6000/year for childcare. After school care and summers is half of that and piano lessons take up most of the rest. There's a little savings, but I upped college savings a bit.

There is a sweet spot from Kindy to the pre-teen/middle school age where if you don't put them in anything but some rec sports, it's pretty cheap outside of after school care and summer care, but high school has been a bit of a nightmare with my older one. Not 30K/year nightmare, but for sure more than the 6K/year that childcare was. The worst part (for me) is it's not a steady once a week or once a month bill, it's random big stuff on top of constant nickel and diming.
Hockey10
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Hockey10 »

willthrill81 wrote: Wed Jul 31, 2019 2:35 pm
Two words: travel sports.
Two more words: car accidents. :annoyed :x :shock: :oops:
MoneyMarathon
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by MoneyMarathon »

I imagine that it depends on the area, shouldn't it?

In some HCOL areas, full-time day care prices ($$$$) will buy a LOT of sports equipment, iPads, and car insurance.
vshun
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by vshun »

willthrill81 wrote: Wed Jul 31, 2019 2:35 pm
batpot wrote: Wed Jul 31, 2019 1:40 pm
dbltrbl wrote: Wed Jul 31, 2019 1:27 pm No. It goes up. Even if you use public schools it goes up.
how?

Assuming are you contributing regularly to the 529 since birth, I cannot image maintaining >=$2500/mo in "extra curricular" actives through high school.
Two words: travel sports.
Add on top of these 2 words: hockey or figure skating. Total will be a multiplier to travel sports costs number :(
Total yearly amount I think would beat any other big expenses mentioned here like cars, insurance, braces. Source: have 23-, 16 and 11 year olds.
Miriam2
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Miriam2 »

willthrill81 wrote: Two words: travel sports.
Two more words: chaperoning travel-sports

The cost of children only goes in one direction: up

Up through the weddings, then stays up for grandchildren :D

You can plan for the cost to go down, yet life gets in the way.
But then, we don't have children for financial fortune.
John Bogle, "The Twelve Pillars of [Financial] Wisdom" - Pillar 4: Nothing Ventured, Nothing Gained. Eschewing the risk of stocks, therefore, carries a risk of its own.
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willthrill81
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by willthrill81 »

Miriam2 wrote: Wed Jul 31, 2019 3:24 pm But then, we don't have children for financial fortune.
It's interesting to see how much that has changed in the last ~120 years. Most people's 'retirement plan' was their children. You had a lot of them, knowing that many would never reach adulthood, in the hopes that they would help you on your farm or in your trade and would have the means to support you when you became physically incapable of continuing to work. Now, rather than being a financial asset, children are a financial liability. It doesn't mean that we don't love them, but they aren't helping our finances.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by stoptothink »

I have 2 kids, 7 and 4. When my daughter started kindergarten our costs for supporting her were cut over 50%. Nearly $12k/yr for childcare for her alone; all the other activities combined are a tiny fraction of that and she was already doing most of them (gymnastics and jiu jitsu). Yes, we still pay for 2.5 months of childcare for her in the summer. The HUGE majority of non childcare child-rearing costs are discretionary. If you are insistent that your child does several travel team sports, goes to fancy summer camps, does horse-riding lessons, private music lessons, and has after-school tutoring, then yeah you are going to pay for it, but for the rest of us parents who don't view those things as requirements, yes it is goes way down.
fuddbogle
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by fuddbogle »

mhc wrote: Wed Jul 31, 2019 1:42 pm really depends. here are some expenses as they get older:

1. club sports
2. musical instruments
3. braces
4. travel
5. cars/insurance
6. college
7. hobbies
8. phones

When our kids were small, we would get a single hotel room. That worked fine. Now that they are older we get 2 rooms or suites or VRBO. This probably has doubled the cost of lodging. My kids no longer get the kid's meals. They get adult entrees. They don't always qualify for kid tickets. Our travel budget has gone up dramatically. We no longer stay with my parents or the in-laws. We have to get lodging when we visit them.
With 3 girls I had all of those plus another large expense, eating out. And don't forget, clothes with shoes being their own category. We didn't spend anywhere near what the OP did with my wife working part-time (then) and using a neighbor for daycare. Our costs went up substantially as they grew older. Then they all got jobs so we ended up with 5 cars. I don't wonder why my investments aren't quite up to par with quite a few posters here.
Last edited by fuddbogle on Fri Aug 02, 2019 8:23 am, edited 1 time in total.
Casper
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Casper »

stoptothink wrote: Wed Jul 31, 2019 3:32 pm I have 2 kids, 7 and 4. When my daughter started kindergarten our costs for supporting her were cut over 50%. Nearly $12k/yr for childcare for her alone; all the other activities combined are a tiny fraction of that and she was already doing most of them (gymnastics and jiu jitsu). Yes, we still pay for 2.5 months of childcare for her in the summer. The HUGE majority of non childcare child-rearing costs are discretionary. If you are insistent that your child does several travel team sports, goes to fancy summer camps, does horse-riding lessons, private music lessons, and has after-school tutoring, then yeah you are going to pay for it, but for the rest of us parents who don't view those things as requirements, yes it is goes way down.
+1. We've seen the same savings. Intramural sports in my town are $100 per year. We're not doing a "travel team" unless the kid is extremely talented. No other non-discretionary expenses as they get older are even close to the cost of daycare.
delamer
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by delamer »

stoptothink wrote: Wed Jul 31, 2019 3:32 pm I have 2 kids, 7 and 4. When my daughter started kindergarten our costs for supporting her were cut over 50%. Nearly $12k/yr for childcare for her alone; all the other activities combined are a tiny fraction of that and she was already doing most of them (gymnastics and jiu jitsu). Yes, we still pay for 2.5 months of childcare for her in the summer. The HUGE majority of non childcare child-rearing costs are discretionary. If you are insistent that your child does several travel team sports, goes to fancy summer camps, does horse-riding lessons, private music lessons, and has after-school tutoring, then yeah you are going to pay for it, but for the rest of us parents who don't view those things as requirements, yes it is goes way down.
This was the point I was trying to make earlier.

You must pay for child care if both parents are working (absent free family care).

You CHOOSE to pay for expensive travel sports, cars, music lessons, etc.

Our kids were involved in extracurricular activities that had lower costs.

I saw parents who paid thousands a year for sports teams for their kids and then had to take out loans for college.

Not a choice I would make.
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by Spirit Rider »

fuddbogle wrote: Wed Jul 31, 2019 3:39 pm With 3 girls I had all of those plus another large expense, eating out. And don't forget, clothes with shoes being their own category. We didn't spend anywhere near what the OP did with my wife working part-time (then) and using a neighbor for daycare. Our costs went up substantially as they grew older. Then they all got jobs so we ended up with 5 cars. I don't wonder why my investments are quite up to par with quite a few posters here.
^^^ This +150% When girls are tweenagers and early teenagers before they get a job and pay for their own clothes and makeup. Not to mention your food bill with teenage boys.
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Re: Does the cost of children actually go down once the daycare comes off the books?

Post by GCD »

delamer wrote: Wed Jul 31, 2019 4:00 pm I saw parents who paid thousands a year for sports teams for their kids and then had to take out loans for college.

Not a choice I would make.
Those parents were probably under the delusion that the kids would get a free ride to college on a sports scholarship. No excuse for that. The truth was been widely disseminated for almost a decade now. Lots of articles and studies to back up this 2008 article.

http://www.wcusc.org/docs/links/college ... -10-08.pdf
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