Perhaps the most out-of-touch video ever

[Small Business Owner of Any Repute]

Problem: Your neighborhood is too expensive for someone making $400K annually.
Solution: Move to a neighborhood too expensive for someone making $350K annually.

[DC Al Fine]

Thinking about this topic I want to make it clear how expensive it is to raise a child in an neighborhood where a family that makes $400K might reside once we take discretionary spending in to account.  Looking at my own case, I did an analysis of what it would cost in discretionary spending for my three year old child from birth to him finishing graduate school.  In 2014 dollars I worked it out to a bit more than $1 million.  This does not include cost of food clothing etc etc which I consider mandatory spending.  The $1 million include the cost of nannies, nursery school, various classes, taxi to take the child to nursery school/classes, summer camp, a car for him when he is old enough, cost of private university and graduate school.  Note since we live in a good school district we do not have to pay for elementary school and up.  Note that classes of various sorts will add up.  Our son goes to swimming, soccer, and martial arts classes on top of nursery school which works out to about $6K a year.  This will only go up from here.  $1 million could be even worse if it was not the fact that we plan to retire early so there will be no need for nannies once our child is ten or so.  If it was not for that the bill will be even higher.  Note that this family in Chicago has two children so you can imagine this financial burden.  Of course as I pointed out, this is completely discretionary, but around where I live what we are doing for our child is pretty standard.

None of the boldface items are necessities and you may be shocked to find that the majority of children in this country, to say nothing of the rest of the world, must manage without them.

Number of f#$%s given about your situation: Zero.

He actually called all the boldface items "discretionary".

[dead0man]

As long as he doesn't expect anybody to feel sorry for him, I don't care what he blows his money on trying to keep up with the assholes next door.  And really, thank Og for these people, look how many other people his family helps give jobs to.

[GaussLaw]

Thinking about this topic I want to make it clear how expensive it is to raise a child in an neighborhood where a family that makes $400K might reside once we take discretionary spending in to account.  Looking at my own case, I did an analysis of what it would cost in discretionary spending for my three year old child from birth to him finishing graduate school.  In 2014 dollars I worked it out to a bit more than $1 million.  This does not include cost of food clothing etc etc which I consider mandatory spending.  The $1 million include the cost of nannies, nursery school, various classes, taxi to take the child to nursery school/classes, summer camp, a car for him when he is old enough, cost of private university and graduate school.  Note since we live in a good school district we do not have to pay for elementary school and up.  Note that classes of various sorts will add up.  Our son goes to swimming, soccer, and martial arts classes on top of nursery school which works out to about $6K a year.  This will only go up from here.  $1 million could be even worse if it was not the fact that we plan to retire early so there will be no need for nannies once our child is ten or so.  If it was not for that the bill will be even higher.  Note that this family in Chicago has two children so you can imagine this financial burden.  Of course as I pointed out, this is completely discretionary, but around where I live what we are doing for our child is pretty standard.

None of the boldface items are necessities and you may be shocked to find that the majority of children in this country, to say nothing of the rest of the world, must manage without them.

Number of f#$%s given about your situation: Zero.

He actually called all the boldface items "discretionary".

Indeed.  And given that jaichind clearly wants his kid to be the academic elite (going to Ivy League private university/graduate school), a lot of that extracurricular stuff is kind of a necessity.   

Life sure is a rat race regardless of what level you are on.  It seems like the days of the "idle rich" no longer exist in most cases.

[Indy Texas]

Thinking about this topic I want to make it clear how expensive it is to raise a child in an neighborhood where a family that makes $400K might reside once we take discretionary spending in to account.  Looking at my own case, I did an analysis of what it would cost in discretionary spending for my three year old child from birth to him finishing graduate school.  In 2014 dollars I worked it out to a bit more than $1 million.  This does not include cost of food clothing etc etc which I consider mandatory spending.  The $1 million include the cost of nannies, nursery school, various classes, taxi to take the child to nursery school/classes, summer camp, a car for him when he is old enough, cost of private university and graduate school.  Note since we live in a good school district we do not have to pay for elementary school and up.  Note that classes of various sorts will add up.  Our son goes to swimming, soccer, and martial arts classes on top of nursery school which works out to about $6K a year.  This will only go up from here.  $1 million could be even worse if it was not the fact that we plan to retire early so there will be no need for nannies once our child is ten or so.  If it was not for that the bill will be even higher.  Note that this family in Chicago has two children so you can imagine this financial burden.  Of course as I pointed out, this is completely discretionary, but around where I live what we are doing for our child is pretty standard.

None of the boldface items are necessities and you may be shocked to find that the majority of children in this country, to say nothing of the rest of the world, must manage without them.

Number of f#$%s given about your situation: Zero.

He actually called all the boldface items "discretionary".

It's kind of pointless to discuss how expensive something is after you've chosen to make it a lot more expensive than it needs to be.

If I went to McDonald's and ordered multiple portions of every menu item, it would be relatively expensive by fast food standards. That doesn't make "McDonald's is really expensive" any more valid of a statement.

It is true that if you want your kid to go to an Ivy League school (a "real" one, not Cornell or Dartmouth or Brown, sorry...) and follow the stereotypical MBA-->Goldman Sachs/McKinsey/etc-->Manhattan penthouse and Hamptons house trajectory, those boldface items are necessary and not even sufficient.

Someone like jaichind isn't going to ask where that leaves children whose parents cannot provide those things for them and what the ramifications are for their future success or lack thereof. He's going to say, "Screw them, I've got mine. But au pairs and lacrosse camp sure aren't cheap."

[○∙◄☻¥tπ[╪AV┼cVê└]

It must be awful to barely get by in this luxury condo on Lakeshore Drive
http://www.realtor.com/realestateandhomes-detail/530-N-Lake-Shore-Dr-Apt-1801_Chicago_IL_60611_M76731-89019

Agreed, and the owner of this gorgeous Bucktown 4-bedroom home is basically living in poverty.

http://www.zillow.com/homedetails/2162-N-Claremont-Ave-Chicago-IL-60647/3732297_zpid/

As expensive as it is to live in Chicago, and it is, the article is obviously ridiculous and shouldn't be taken seriously. In fact, it is an insult to those who are actually making decent salaries and scraping by because of cost of living. $400,000 salaries don't fit that buck.

I'm sure that Chicago is pretty cheap compared to the bay area.

[Person Man]

It must be awful to barely get by in this luxury condo on Lakeshore Drive
http://www.realtor.com/realestateandhomes-detail/530-N-Lake-Shore-Dr-Apt-1801_Chicago_IL_60611_M76731-89019

Agreed, and the owner of this gorgeous Bucktown 4-bedroom home is basically living in poverty.

http://www.zillow.com/homedetails/2162-N-Claremont-Ave-Chicago-IL-60647/3732297_zpid/

As expensive as it is to live in Chicago, and it is, the article is obviously ridiculous and shouldn't be taken seriously. In fact, it is an insult to those who are actually making decent salaries and scraping by because of cost of living. $400,000 salaries don't fit that buck.

I'm sure that Chicago is pretty cheap compared to the bay area.

This is what I was thinking. Maybe about the same price as any other larger cities in the midwest/blue states in the middle of the country?

[memphis]

Yeah, Chicago isn't really all that pricey. Having an eternal supply of land for sprawl keeps things reasonable. Metro Houston, Phoenix, Detroit, Atlanta, etc work pretty much on the same principal. Makes me wonder what the priciest inland large metro area is.

[jaichind]

I wanted to clarify what my motivation is given the feedback here.  This thread is about how realistic the budget laid out in the hypothetical Chicago household which has a $400K income.  

1) My point is that the cost of childcare seems to be underestimated and I used myself as an example not to complain but to point out that the discretionary costs I incur for our child is quite typical for where I live and it is indeed quite large especially when compared to this hypothetical family.  

2) Of course in my neighborhood medium household with young children (those that are at the peak of their earning power) should be around $600K-$800K by my estimation.  On the other hand Greater NYC is more expensive than Chicago so perhaps where this hypothetical family lives is comparable to where I live.  

3) In my particular case, while these typical costs are high, they are well within our means and for sure I do not want to come off as complaining about it.  Like I said, they are discretionary, so if they are not within our means then I will just choose not to spend it.  On the other hand, some of my neighbors that might have lower household income than myself might feel stretched with these costs but they end up spending it as that is the norm here.  They could move out but they want to be with their social-economic peers so there it is.  They can and should take complete ownership of this choice.

[jaichind]

It's kind of pointless to discuss how expensive something is after you've chosen to make it a lot more expensive than it needs to be.

If I went to McDonald's and ordered multiple portions of every menu item, it would be relatively expensive by fast food standards. That doesn't make "McDonald's is really expensive" any more valid of a statement.

It is true that if you want your kid to go to an Ivy League school (a "real" one, not Cornell or Dartmouth or Brown, sorry...) and follow the stereotypical MBA-->Goldman Sachs/McKinsey/etc-->Manhattan penthouse and Hamptons house trajectory, those boldface items are necessary and not even sufficient.

Someone like jaichind isn't going to ask where that leaves children whose parents cannot provide those things for them and what the ramifications are for their future success or lack thereof. He's going to say, "Screw them, I've got mine. But au pairs and lacrosse camp sure aren't cheap."

My position is somewhat different then that.  My view is mostly one of biological determinism where I see what my child raw cognitive capabilities, be it high or low, as mostly "baked in" at this stage assuming reasonable environments and all these parenting and classes would not add much.  My job as a parent is mostly to provide a reasonably good environment and we have more than meet that criteria.   It is my DW that is the tiger mom that comes close to the views listed above.  She and I have all sorts of arguments about this.   So why do I agree to all these classes?  Mostly because I want my child to progress in social skills and emotional intelligence which could only take place in these extra class settings (be it sports, music or whatever) versus being at home with his parents and his nanny.   That for me is often the missing skill that many people lack in the private sector.  I for sure could do much better on this axis and want my child to get a early start on that. 

And yes, au pairs and lacrosse camp are expensive but I got it covered.  Also, I hate the Hamptons and do everything possible to avoid going there when invited by my friends.