One Million Dollar Sting of Birds and Bees

As a parent it is hard to determine which is worse, giving or getting “the talk” about the birds and bees. The challenge, besides avoiding embarrassment, is to set a structure of giving the talk, have them understand and get across the importance of it.

One thing teenagers are starting to understand is the value of money, especially if they are now working to make some. So, when discussing the birds and bees, how does this create a financial correlation that they will understand? Let me introduce the concept of the possible million dollar sting.

Suppose at the age of 18, a pregnancy occurs, and child support payments of $250 per month are charged. At first glance, this appears to be a case of paying out $54,000 over the next 18 years.

Investing in the life of a child can be a noble and rewarding use of funds. However, investing that same money in, say, a tax-free IRA is rewarding in its own way. For the moment we will set aside all the other responsibilities of having a child as a teenager unexpectedly.

If the $250 each month had been put into a tax-free IRA earning an average of 8 1/2 percent interest a total of $127,721 have at the end of 18 years. If the money were left to sit and even if there was never another cent added to the contribution, at age 59 1/2 it would accumulate to over one million dollars.

Many who find themselves facing an unplanned pregnancy are ill prepared for the demands of a newborn and financially unstable. By presenting the financial costs related to unplanned pregnancy, parents have yet one more weapon in their arsenal to use to convince their teenagers to wait to have sex.

The question then becomes, is playing with the birds and bees and going for the honey worth the risk of a financial sting for one million dollars?

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First of all, Make sure you have or get the talk as uncomfortable as it may seem. Second, feel free to use this site as a third party source. Then it is not just coming from mom or dad.

The reality is that a teen pregnancy not only has a financial cost of $1,000,000.00, but that it involves many lives of the baby to parents to extended family and friends, which is even more important then one million dollars.

I hope this gives a solid impact from a little bit different direction.

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