In the current issue of The Atlantic, writer Michael Kinsley suggests that the legacy of the baby boomers should be paying off America's debts, leaving the next generation with a clean slate. It's the least they can do, he says, since their parents saved the world during World War II. As a cohort, boomers are squeezed already, Mr. Kinsley acknowledges. They became the first generation to start out with student debts; they are paying, privately and publicly, for their parents' retirement; and many are supporting their children into their 20s and even beyond. But he charges that boomers should pick up the tab for the nation's fiscal mess regardless. While the article's message is a political and economic one, with broad policy implications, it made me think about our individual responsibilities to our children. What exactly do we, as parents, owe our kids?
There are estimates that place the cost of raising a child in Canada anywhere from $170,000 to over $250,000 - and that's just to get them to the age of majority. The numbers merely factor in the bare basics required to rear a child. They don't include luxury items such as summer camp, Nintendo Wii systems, or iPods, or modern-day essentials such as a university education. They certainly don't consider the fact that many adult children are living at home longer, as they try to complete secondary educations, establish careers and build savings.
My six-year-old daughter recently told me that she wants to live with my husband and me forever. Looking at her sweet, earnest face, I told her that she is welcome to stay with Mommy and Daddy as long as she wants. I meant it, too. Of course, I hope that she'll one day have the will and means to leave the nest and start her own family. But I want to give my children the security of a place to stay if it makes their start in life easier. I also want to help them in other ways. I'm contributing to a Registered Education Savings Plan (RESP) to fund their future university degrees. I see my husband and me paying our fair share of weddings, assisting with first cars and perhaps even down payments on first homes.
It's a lot to take on, given we would also like to enjoy a few years of retirement before we depart this world. As my husband and I await the arrival of our third child, I worry that these aspirations are unrealistic. After all, the proverbial pie, such as it is, is getting sliced into smaller pieces. With three kids to raise and a mortgage to pay, it's unlikely we'll be able to afford to help them financially into adulthood as much as I like to imagine.
Many parents in this country are in the same position. According to a recent BMO Financial Group survey, the majority of Canadians believe the cost of a post-secondary education, currently running up to $60,000, is beyond their means. Only 52 per cent of Canadian parents with children under 18 have invested in an RESP, with 50 per cent of them saying they do not contribute because they cannot afford it.
Given our high aspirations for our children and the rising cost of raising them, it's perhaps not surprising that the nation's birth rate is on the decline. Still, as I consider my growing family's future, I believe there is a personal lesson to be gleaned from the article in The Atlantic. My husband and I have a responsibility to reach retirement debt-free and financially independent. Giving our children freedom from the burden of our care is, in itself, a great gift. While I certainly hope to help them well beyond that measure, I would be disappointed if my children expect financial support as adults as their natural birthright. They will, however, get plenty of coaching and guidance on how to make sound financial decisions and become successful, independent citizens in their own right. We owe them at least that.