Did you know that childcare is now more expensive than college in 33 states? While parenthood is beautiful, there's no need to go into it blind. If you're planning to start a family, now is the time to start planning for the financial costs of child-rearing, both from the perspective of short-term, monthly cash-flow and the long-term implications that parenthood-related career choices have on lifetime earnings and savings.
Here to talk on the podcast are experts in financial family planning: Siran Cao and Mel Faxon, founders of Mirza, a platform helping empower parents and future parents to take control of their finances and plan for a family.
We discuss the "motherhood penalty," created by lack of access to paid leave, cultural roles that make mothers the default parent, and workplace cultures that penalize mothers - and the impact that this penalty has on long-term earnings and financial health. Siran and Mel also advise future parents on when they should start family financial planning, how to do so, and what to consider (hint: we discuss at length the shockingly high cost of childcare in the United States, which often catches parents off guard).
Lastly, Mel and Siran discuss public policy and workplace solutions to the lack of support for parents: what changes are needed for paid parental leave and affordable childcare, and how we must create a culture that promotes gender equity in parenting at all levels, including in the design of our workplace cultures and policies.
- Care.com: This is How Much Child Care Costs in 2021
- CNBC: New Census data reveals no progress has been made on closing the overall gender pay gap (2018-2019 data)
- Study on the motherhood penalty:
"Children and Gender Inequality: Evidence from Denmark"
"Using Danish administrative data from 1980-2013 and an event study approach, we show that most of the remaining gender inequality in earnings is due to children. The arrival of children creates a gender gap in earnings of around 20% in the long run, driven in roughly equal proportions by labor force participation, hours of work, and wage rates."
- Forbes: Why Being a Woman Can Cost You More than $400,000
"According to a new analysis of the wage gap by the National Women's Law Center, a woman who is starting her career now will earn $430,480 less than her male counterpart over the course of a 40-year career, if the current wage gap persists. For many minorities, the losses are even larger: African American women will earn $877,480 less over those 40 years, Native American women will earn $883,040 less and and Latina women will miss out on a whopping $1,007,080 in lifetime wages."