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Financially Ready To Have Kids?

CNN Money asked its readers to give their answers to a question one reader submitted:

When is a person financially ready to have kids?

My husband and I make decent money, but it all seems to go to student loans and the mortgage. How does anyone decide the time is “right” to have children? What steps should we take before starting our family to make sure we are financially secure enough to provide a safe and happy home for our children?

This is one of those questions that have no right answer, because it’s so different for everyone. But I believe it’s a useful question to ask, even if you don’t know the right answer. I know that a baby is a great deal of responsibility and costs a great deal of money. According to a USDA report, it now costs an average middle-income American family $222,360  to raise a child from birth to 18. That’s almost a quarter of million dollars! Furthermore, that number DOESN’T include college costs, which could range from a few thousand dollars a year at community colleges to $50,000 a year for a private university education.

I’ve read a lot of personal finance posts that say something along these lines: kids don’t have to cost all that much money! All they need is love and attention! They just want time with you! I don’t disagree with that, because it’s true, kids don’t really care if they wear Target or Tommy Hilfinger (just wait until they become teenagers!). But having kids also impose some very real costs – impact on your career (and thus income) trajectory, impact on your personal freedom, impact on your relationships. Achieving a certain level of financial security can mitigate some of these impacts – having enough money to pay for a night nurse so that the new mom can get enough sleep after the delivery, having enough money to hire babysitters so the mom & dad can go on a romantic date, having enough money so you don’t worry (too) much about health insurance or paying for school supplies.

So money isn’t everything when it comes to children, but not having money also causes a lot of problems for new parents and puts further strain on a marriage. CB is probably a little less enthusiastic about kids than I am… and I am about a 5 on a scale of 1 – 10, 1 being Childfree Forever! and 10 being Must Have Baby NOW! One of his reasons for CB’s reluctance  that he is very worried about the impact a baby would have on our finances and our freedom. Which are legitimate concerns that I share. I take this to mean.. we are definitely not ready now.

We might be ready one day, however. I am finding babies cuter and cuter, much more so than I have in my early 20s. I see a pretty biracial toddler with straight black bangs and a bowl haircut, and I start wondering… well, maybe it wouldn’t be so bad to have one of those. Perhaps the biological imperative cannot be denied. If so, here is what I’d like to have accomplished financially before CB and I bring a baby into this world.

  • Save up an adequate retirement fund. I am not sure what “adequate” means just yet… but $250,000 sounds like a good number.
  • Achieve an income and a level in our careers that would allow us to continue to save for retirement, give the kid a leg-up, provide childcare, and buy a modicum of balance.
  • Live in the same city. This may seem like a no-brainer, but given that we will likely move to different states a month after the wedding, I’d like to ensure that we will not be in a long-distance relationship WITH a kid.
  • Pay off our student loans because baring a mortgage, I really would like to be debt-free by the time we have a kid.

On the one hand, I can chalk these goals up to my Type A personality and my desire to really, truly, prepare financially before we are responsible for another human being. On the other hand, setting these very high financial goals may just be a way for us to delay becoming parents without shutting the door on parenthood. I don’t know what is the “right” level of financial security before you have a child. Obviously, people have become parents under less-than-ideal circumstances and still have raised great children. And obviously there are very wealthy parents who are horrible parents. But most of the time, parents are just trying to do the best they can with the resources they’ve got. The truth is, I am not confident in my ability to be a good mother, but I’d like to have as many ducks in a row as I can to mitigate that uncertainty. Having more resources have to be better than having fewer, right?

When do you think you would be financially ready to have kids?

  • Michelle - I think I'll be ready when we're able to live on one income and be able to successfully save the other half. ReplyCancel

  • Emily - I like your analysis here. I have many of the same feelings but I haven't given thought to the concrete goals we should achieve before reproducing. My only two ones so far are: live in the same city and both have real jobs. However, my husband wants to get pregnant when I'm writing up my dissertation. I'm afraid having a baby shortly after graduating could mean I won't properly launch my career (as you were discussing). We still have a year or two before I get to that point so we'll see! I try not to have too firm expectations because accidents can happen and I don't want to feel resentful if I get pregnant "too early." ReplyCancel

  • Bridget - I'm having a child at 30, with or without a partner, with or without achieving financial milestones (… ok just kidding I have to be totally OK financially if I'm going to raise a child, especially alone). It's about striking a balance between waiting for things — the right person, the right job — and declining fertility.

    I have a job with incredible maternity benefits, but I want to earn more money (maybe ~$25,000 more on my salary) before I have a child. Additionally I want to be completely student-debt free and own my own home. I think 4 years is enough time to do this, but I'll wait longer if necessary. ReplyCancel

    • Well Heeled Blog - I really hate thinking about declining fertility. 30 is 3 years away for me, and I cannot under any circumstances imagine that I am ready to be a parent by then. ReplyCancel

  • Laura Vanderkam - Thanks for the link. Yes, money can make working parenthood easier, but until you have a ton of money, what makes it easiest is having extended family around or very close friends who can serve the extended family role. So that might be a goal to build up alongside the finances — a really good social network. Not the Facebook kind, the kind who will show up when you have to leave on a business trip and your sitter calls in sick. Of course, the issue with all of this is that there really isn't a perfect time. I've had friends who waited until they were financially stable, then the baby took several years to show up, either via expensive fertility treatments or an expensive adoption. That adds a wrinkle to the calculation. On the other hand, you may not have a negative impact on your career either. Sometimes people buckle down with the mindset that "I'm providing for a family now!" It makes them more focused. ReplyCancel

    • Well Heeled Blog - Great point about the extended family / social network. We want to move around (and probably will have to move around to move up in our careers), but eventually we'd like to come back to where both our parents are. Sometimes I wonder… do I REALLY want kids? They just make everything more complicated. But they also make everything more magical, right? I know that's what my mom would say about me. (Har har har. Kidding. She would not say that. She would instead show you my college tuition bills). ReplyCancel

  • Money Cone - You can raise a kid absolutely broke or give the kid a comfortable life. Keep the focus on the kid – it is a great injustice to the kid if you yourself are broke.

    I think having decent savings before deciding to have a kid is necessary. And of course the mental preparation …life changes more than you can imagine! ReplyCancel

  • StackingCash - People have kids when they are in dire financial straits. I would think anyone in the PF world would be more than capable to raise a child. My fear is having a child that is disabled where that would take a tremendous amount of resources to raise. ReplyCancel

  • @LoveNotDebt - I probably could have written this post before we had our little one. The truth is that (especially for males, at least the ones I talk to) you'll never be ready BEFORE you have kids, but when there's a baby in your house and you NEED to take care of it, you have no choice but to be ready.

    If you wait until you're ready you may never have kids. Money is only a part of the equation. As Laura pointed out above, the best thing that we have going for us is that my parents are only a short drive away and close family friends and our persional friends have been super helpful and supportive. Without their support, I bet all the money in the world could make parenting only marginally easier.

    Oh yeah, night nurses are for sissies. Sleep deprivation is where it's at! ReplyCancel

    • Laura Vanderkam - I am totally a sissy. ReplyCancel

      • Well Heeled Blog - Is it bad if I really truly want to be able to afford a night nurse (for… at least 3 months?) LOL. Not being able to sleep for more than 2 hours at a stretch sounds like a horror story. ReplyCancel

    • Liz - Society sells women a bill of goods. Everyone says "get your career started before you have kids, you have plenty of time for that." With fertility declining with every year, that is not true. ReplyCancel

  • PKamp3 @ DQYDJ - Not bad, and probably worse for people like me in the not-so-cheap Bay Area!

    Luckily there is some economy of scale mentioned in the report (I skimmed it) – so for you multiple child families you're saving a bit in some of the categories. Hand me downs for the win? ReplyCancel

  • Newlyweds ona Budget - I would also like to be debt free by the time we have a kid, so we've got a ways to go! ReplyCancel

  • Newlyweds ona Budget - I wanted to add to my comment since i just realized we're about the same age. (I'm 27, soon to turn 28) and I have kind of been under the impression that I'll get pregnant after I turn 30, but this is assuming my husband has his firefighter job by then. I don't think we'd actually be able to have a baby until he is financially set. at the same time, i would like to enjoy the extra income for a while and go on trips together before we have kids…and also save up for a house oh and pay off student loans. that's not too much to ask right? 😛 ReplyCancel

  • Karen - This is such a timely post for me to read. I am 31 and 5 weeks pregnant! At first I was really freaked out about money — we're 3 years out of grad school, still have a considerable amount of student loan debt, are relatively junior where we work — but then I sat down with our budget and realized that we are also insane savers so have more retirement savings than the average bear our age, student loan rates are very low and we could keep saving a lot between now and Oct to prepare for baby.

    Our calculus for starting to try was that we would be able to do it if the child had a disability, have some credibility at work if I needed to be on bed rest or wanted a flex-time schedule and early enough that if we had fertility problems we'd have a few years before I turned 35.

    There are a lot of balancing factors, but I think thinking about it early is a great way to get prepared. We started saving for college a few years ago to get started! It was fun to watch the account grow and think about our future baby even if we weren't ready yet. ReplyCancel

  • Melissa - Of your list, I think the most important one is to live in the same city as your spouse. I think everything else will fall into place since you're already concerned about managing your finances.

    Other than that, I think you need to think about whether you want to have kids or not. It's a big decision. Once you have a kid, A LOT changes. Not everyone is meant to be a parent and that's ok.

    Lots of college educated women are waiting until they're stable in their careers before having kids, but then there's the declining fertility and greater risk for having a special needs child. When I lived in San Francisco, I was one of the younger moms I knew (had my first child at 30), but then there is a lot of discussion about fertility treatments, which are both expensive and stressful ReplyCancel

  • eemusings - I SHOULD be concerned about fertility, esp as my mother had trouble conceiving. But somehow, I'm not. I do want kids, but if we weren't able to have em when we want them (which I think would be around 30. My time line goes marriage, buy a house, reproduce) then I wouldn't be devastated. I don't think. T's family is full of kids (fertility is not a problem for them, among other things) so we could be the cool aunt and uncle. I really would love if we were in a position where one of us could stay home if we wanted (although of course that brings up questions of remaining employable later on, plus retirement savings etc).

    I would say T and I are in reversed roles to you and CB – being financially set has always been much more important to me, plus he has seen kids raised on practically nothing (not saying that's a good thing but it shapes his view on what is needed to have a family). ReplyCancel

    • Well Heeled Blog - I'm with you – I don't foresee devastation if we couldn't have a kid. I'd be perfectly fine with adopting, although that comes with its own set of expenses and heartaches. I would LOVE to be the cool auntie. ReplyCancel

  • The Happy Homeowner - Eek…loaded question…haha!

    I can't possibly imagine having a child right now, so that certainly tells me that I'm not ready. Partly because I still have financial goals to attain but also because I have other life goals to achieve as well. I imagine as I get a bit older (although I'm no spring chicken as far as the land of fertility is concerned), these views will change because I absolutely do want children. When I think of it now, I think that I will first plan to have a baby e-fund in addition to my regular e-fund, much like a house downpayment fund. Having this in combination with my retirement, job security, home, etc. will make me much more relaxed about baby time in terms of finances.

    Thanks for the thought-provoking post! ReplyCancel

  • BrokeElizabeth - I've always heard that it is impossible to be 100% financially and emotionally ready to have a child… but that time is waaay down the road for me, so I haven't even thought much about it. ReplyCancel

  • kim - In the movie Idiocracy, the family who waited to finish education and have enough money was then too old to conceive. There are also costs to waiting – fertility treatments ($25k a pop), adoption ($25k), more tests required if you're 35+ plus a higher liklihood of complications (medical $$) which can be lifelong.

    I liken the $222k cost to that of the "average" wedding – many go under, many go over, just don't be stupid. For example, the cost of housing makes up 33% of the $222k (i.e. assuming you buy a bigger house), and housing costs is a squishy number since it's overpriced, 17% is daycare, 16% is education. Also this doesn't account for economies of scale (i.e. having more than 1 child) or hand-me-downs from friends/family. See the WSJ article http://blogs.wsj.com/juggle/2010/06/10/cost-of-raReplyCancel

  • oilandgarlic - I had kids way too late.. No one told me about declining energy levels, never mind all the risks of being an old mom in terms of increased chances of having disabled kids or health issues. Well, maybe people mentioned it but I didn't pay any attention. Anyway, to me, being mentally ready and physically capable are more important than finances, but finances/stability make life with baby or babies much easier. ReplyCancel

    • Well Heeled Blog - I have a feeling that I will be one of those moms who have kids "way too late." It's not a matter of me putting other goals ahead of the baby, it's more a matter of me deciding if a baby SHOULD be a goal. Unfortunately Mother Nature does not encourage endless dithering on the subject. But hopefully I still have a good 5 years to make a decision either way. ReplyCancel

  • retirebyforty - It took us a long time to be ready for a kid, but we are very happy with the little dude. :)
    A couple I know lived apart for like 8 years now. That's nuts. I think you'll know when you're ready. ReplyCancel

  • Amber - These comments are so interesting! I'm 30 years old and 9 weeks pregnant, and I basically came to the conclusion that, while having children certainly affects finances and requires some financial consideration, it is ultimately not a financial decision so much as it is an emotional one. You're ready when you want children enough that the other factors don't matter. Very poor people make it work, and even raise good kids. The planners are certainly capable of doing so as well, even if they don't meet every check box on the list of things they think they need to accomplish before having children. I absolutely agree with the comments about developing a strong social network being as important (and, in my life, more important) than financial milestones. ReplyCancel

  • Earn Save Live - We did it absolutely backwards, but it will work out well for us. I'm 33 with a 12 year old child – that means that he will be at university before I am 40. He's had a solid middle-class life, lived and traveled abroad, and had the chance to learn sports, music, and much more. Now that I am done with graduate school, I'm earning a six-figure salary, making substantial headway on our debt, and looking forward to reaching our financial goals.

    Here's the thing: there's no right time to have children. I have friends who did all of the "right" things and waited until they were financially ready. Now, they are going into their fifth year of trying to get pregnant and having to make some difficult decisions. I have other friends who put their career first and are now in their late 30s and single. Life doesn't always happen when we want or need it to, you know? For me, being a mother, a wife, and a professional has really made me reconsider my goals and decide how I want to live my life.ReplyCancel

    • Well Heeled Blog - Here's the thing – if I were 100% positive I want to have a child or if I were 100% positive I DON'T want to adopt, it'd make sense to start trying soon or in the next couple of years. But I am not. I have a very deep ambivalence on becoming a mother, and I don't think it's fair to bring a child into this world unless I want it and love it more than almost anything else. And… right now… I don't. You could argue that once I have a baby I will, but that seems to be an awful gamble to make, both for myself and for the baby. But by the time I figure it out, it could be too late. Up the proverbial creek without a paddle! ReplyCancel

  • Jana@DailyMoneyShot - This is one of those questions that is almost impossible to answer. There is no perfect time to have a kid. And if you're finances are in complete disarray (like ours were), that little baby is typically enough to kick you into gear.

    I don't pay much attention to the arbitrary figures that the USDA assigns to the cost of raising a kid, especially since it includes the house and car payments and a few other ridiculous expenses that for most people would remain the same with or without the kid. There are too many variables to even put a figure on it. ReplyCancel

  • Jerry - We've managed with 2 children but we're still paying off student loans. And, I think that will be for a little while. I think being financially stable leads to less stress when you have kids but for some that might mean waiting forever. And, doing all the 'right' things financially isn't insurance you won't have stress with children. It's stressful with money or not! ReplyCancel

  • Nick - I used to worry about whether I was ready or not, financially and emotionally for kids. I used to say "once I've been employed for 3 years then I'll be ready" or "once I save up $xxx I'll feel ready" or whatever. Then it struck me that I'd always want to be better off and miss some great, young years with kids, grandkids and (if I waited long enough) great grandkids, so I dove in. I admit my finances were pretty good when we had our kid (although we got pregnant RIGHT before the 2008 fiasco hit a peak, which freaked me out a bit). But I don't there's a general rule as to when you're "ready" financially.

    If you have a solid plan and commitment to smart finances and supporting yourself and your family, I'd say go for it. ReplyCancel

  • Epic Finances - I want to have $50,000 in liquid assets (not counting retirement) and no debt other than housing. I know this might seem silly, but this my personal goal before considering having children.

    $50,000 is enough that if a disaster happens I think I can get back on my feet (hopefully)>

    Love the picture. ReplyCancel

  • Aloysa - I made a choice a long time ago that I am not having children. For a lot of different reasons. One of my friends who has built a great career, who is financially stable to the point that she can stay home and not work anymore, wants to have a child. She and her partner have been trying to conceive for over a year. Money is not a question, but age and fertility is. My point with all of this is: besides finances you should take into account your age. Do you really want to wait to achieve your financial milestones? Or do you really want a child? Once a friend of mine told me that she believes that every child comes with a piece of bread in their hands. :) ReplyCancel

  • Weekly Update 4 | Evolving Personal Finance - […] Heeled Blog shared her thoughts on the financial impacts of having a child and her career and financial goals to achieve before she reproduces.  The comments from actual parents add a lot of value as […]ReplyCancel

  • Yakezie Carnival – The Daytona 500 Edition - […] Heeled Blog: Financially Ready to Have Kids? – Kids take a great deal of time and money to raise. What level of financial readiness do you […]ReplyCancel

  • addvodka - This is really interesting. I think it depends on the family, like you said. I want a house with a yard before we have kids; I want at least a 10K emergency fund + for us both to me making 50K+ per year (the guy is already there, I'm not). Plus, I want to be at a certain point in my career – I've got it mapped out, I just don't know how long it will take me to get there.

    I also would love to wait for my dad to retire before I have kids so he cant stay with them when we're at work. I hope this is a possibility; I have no desire to be a stay at home parent and it's hardly even possible here in Vancouver.

    I think it would be a good goal to have $100K in retirement accounts, too. But I don't know how the guy would feel about that, haha! ReplyCancel

  • Don - Crazy expensive huh! And that doesn't include the cost if you spouse and decides to stop working and become a SAHM…

    I wonder if it's too late to return mine? lol.

    My kids are great and they are worth every penny and then some (at least on most days)…


  • Telkari - I know this part of the blog is a little old, but I ran into it doing research on this very same question, and I feel like I absolutely have to comment. My husband and I (well, husband in August :) ) are only 20 years old, but we've been together 7 years, have lived together 2 years, and are definitely in a stable relationship. We're both currently attending college, but also jobless due to this tough economy and the fact that no employers seem to want college students where I live. We DO know where both of us are going professionally though, and expect to be out into the world within 2 years, 3 maximum, and we both already have future professional jobs lined up and ready for us when we graduate. Both of our parents, and entire families, have had children when they were our age, so both of us are definitely biologically wired to be having children right now. God knows I want a baby very badly, as every cell in my body is screaming to have a child. Despite this, both of us are doing what is the "responsible" thing, and waiting until we are out of college, have some headway on paying off our loans, know our jobs are stable, and have purchased a home. It's been a very, VERY hard decision and both of us are suffering because of it, but we make do as best as we can.

    For us, it may not be the right choice to wait to have a child, especially since fertility problems run on both sides, but we feel we have no other option. Especially since the entirety of my side of the family is against us having children, and his entire family says we should have had a baby a year ago. *sigh* Who knows? ReplyCancel

  • To have or not to have a baby | Well Heeled Blog - […] many? Why do I want to have kids? How will we be able to afford kids? When should we start trying? Will we regret our decision later? What if we end up with kids that […]ReplyCancel

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