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Tough Economy = Fewer Births, Marriages & Divorce Rates

When it comes to decisions about the family, cost is very often one of the factors considered. Among the more expensive family decisions are those to marry, have children, and divorce. Even though the recession “officially” ended in 2009, many people are still struggling financially. The job market remains tough, and many individuals and families are in debt pay down mode.

As a result, it is difficult for people to get excited about spending money on expensive family choices.

Lower Birth Rate

Recently, the cost of raising a child [3] became big news. Supposedly, it costs more than $200,000 for the average family to raise a child from birth to age 18. That doesn’t even include the cost of college! With those costs in mind, many people are putting off having children. The year 2007, before the financial crisis, was a record high year for births in the United States. However, that number began declining [4] in 2008, and has steadily declined since. According to a report from the Pew research center, the states with the highest levels of unemployment also had the biggest declines in birth rate. Many people are looking at their finances, and deciding that they need to make some changes before having kids — whether it’s for the first time, or whether it’s adding siblings to the family.

Fewer Marriages

My wedding [5] didn’t cost much, but I know people who have spent anywhere between $10,000 and $30,000 for a wedding. When you consider that you are spending the equivalent of buying a car for a single day out of your life, it can be daunting to decide to tie the knot during tough economic times. Indeed, since the recession started, the marriage rate in the U.S. has dropped by 10% [6]. That’s a fairly significant drop, when you think about it.

Combining households (whether or not you get married) could be a real money saver, though. Instead of two separate living arrangements, you only have one housing payment between you; sell your excess furniture and household items, and make a few bucks besides. It’s something to think about if you and your partner have separate living arrangements.

Dropping Divorce Rate

Not only are people putting off marriage and children, but they are also putting off divorce because of the economy. It’s no secret that divorce [7] is expensive. There are attorneys (at least two of them!) to pay, and any number of other expenses that can crop up. Many couples considering divorce are putting it off [8] because of the costs involved in the process itself, but also because of other costs that you might not think about until the divorce is underway. Splitting a household in two can get pricey.

And, of course, there is the house to consider.┬áIn many cases, a home is sold in a divorce and the proceeds divided. However, in a poor real real estate market, it’s difficult to sell the house — and get a good price. Much better to try to work out your issues, or at least put off the divorce, until the house can fetch a higher price.

Bottom Line

The tough economy really is affecting the way we live our lives. While financial pressures can take a toll on relationships, they also determine what life decisions we are likely to make. The more expensive the decision, the more likely we are to wait on it.

Have your family planning and relationships been altered by the economy?

(Photo: Chimpr [9])