In the world of finance you hear many reasons to delay parenthood, such as a recent article on the costs to raise a child now exceeding $245,000. So you may find yourself asking the question, when IS a good time to raise a child? Besides that, if you are an only child or the only married child of your parents, is delaying parenthood depriving your parents the joy of grandchildren? I have been married just over three years while my only sibling is not married so my parents have no grandchildren. There is no guarantee how long anyone lives, am I denying them some enjoyment in their life? Also, if you put off having kids are you denying YOURSELF immense amounts of joy from parenting? With that said, when IS the right time to have children?
Obviously, the longer you wait, the closer to financial independence you will should be, which is what some may advocate as the “right time”. But just how do you determine when isn’t or is the right time if you cannot wait until you are financially independent? I am not going to cover reasons you should delay being a parent, you have probably heard enough of that. Instead I am going to cover why there is no reason to delay.
Reasons NOT to wait
You have an Emergency Fund
This one should be obvious, but if you don’t have any savings then how can you handle the more potential ups and downs now that you are caring for another person? If you can’t take care of your own emergencies can you imagine how much more magnified that will be with a baby completely dependent on you? If you have this basic fund in place you may need to increase it a slight amount as your monthly expenses increase.
You can survive on only one income
Day-to-day cash flow is king. You may be stuffing retirement accounts, building equity in your house, but those activities will not feed you (at least not in the short term). So if that little bundle of joy comes into your life you want to be financially secure. What would happen if you or your spouse were to lose your job? Will you be able to make ends meet on only one income? If you know places where you can cut back if that time ever comes then you are in a good position to not deplete your emergency funds in the short term. You aren’t just losing one salary when a job is lost, you are also losing all of the associated expenses such as transportation costs, and maybe even day care expenses if you expect to be out for awhile.
You are afraid it will delay early retirement
Of course taking care of another person will be expensive and if you are not already financially independent it will inevitably delay the process as your expenses increase. But would delaying your retirement date along the way be the only reason that you should delay having a child? If being a parent would bring you great joy, should you not be a parent while still working hard to achieve financial independence?
You are worried how to pay for your future child’s education
As a future parent you would want to give your child every advantage possible, but where is it written that you must provide for a university education? Sure it would be nice to and when that time comes if I don’t mind working extra to help go through school without debt that would be nice. But I feel I should teach my kids to be self-sufficient at an early age. My wife and I had limited assistance in this area and we have started off with some student loan debt, but the best thing I can do is help teach my kids to manage finances well and understand how burdensome student loan debt can be. From there I can help them explore the best financial options and make decisions, but where should it be expected for you as the parent to foot the entire bill? Should this not be considered a luxury item for yourself to pay?
You know what your insurance will or will not cover (and at least HAVE medical insurance)
If you are going to have a child, you are probably going to need medical care. Beforehand you should take the time to review your medical coverage and see what the costs would be for having a child. Take the time to build up a fund for these in addition to your emergency fund as you know you will have those expenses coming. You can potentially use tax advantage accounts such as a Health Savings Account (HSA) or a Flexible Spending Account (FSA) to get the most bang for your buck on these expenses.
You have researched the costs of daycare
If you have researched the costs of daycare in your area (if you are not having a stay at home parent) and know how it comes into your budget. Don’t forget to include the possibility of using a FSA for daycare. If not, don’t forget that you will probably qualify for a tax credit and can reduce your withholding accordingly. If the cost after accounting for the tax break works into your budget, then you are one step closer!
Do you believe having a child will bring you joy and fulfillment?
If you are in a solid place financially, having the things mentioned beforehand, and feel that having a child will bring you enjoyment then why should you wait? Yes, every year you delay will add a little more stash to your retirement account, or a little more down on that mortgage or student loan, but if you can continue to live and improve frugally during this process I believe you can not only survive, but possible thrive! Also, be realistic. If you are having a child you will know that your savings rate will probably be decreased. But the fear of a couple more years working shouldn’t be the determining factor. The determining factor should really just come down to the question if being a parent will increase your happiness. And if you have a somewhat solid financial footing, then why wait to make the leap?
Photo Credit David Castillo Dominici / Freedigitalphotos.net
Note: I made this post to be an against the trend post. Most financial advice tends to be to wait, but you may not desire waiting if you will feel empty during the process. Some things may not be worth delaying, almost everyone striving for financial independence has a few areas they decide to keep during their journey, why should being a parent be any different?
We weren’t in the best financial shape when we had our first child, but we survived. In a lot of ways, having kids actually made us become more serious about our finances. All of a sudden, we have someone relying on us to make good decisions.
Hey Holly, that is a good point. Many people survive financially when having kids and for some people it helps give them focus.
We were financially stable when we had our baby a year ago. One of the reasons we waited was because my wife went back to grad school, plus we just wanted to enjoy married life without kids first. We both love kids and knew we wanted them, but life changes a lot when they come along!
Oh I would imagine life would change greatly with kids! It is also a good point to wait if you are doing grad school, that probably wouldn’t be the right time to start growing your family.
Well thought-out arguments, Kipp!
I’m not sure how I feel about having children (leaning more towards no though), but I definitely wouldn’t want something like reaching financial independence get into the way of a dream like that.
You should check out Ryan’s article on the right time to have kids at Impersonal Finance! His post blends nicely with yours.
Cheers,
NMW
Hey NMW,
I have definitely read Ryan’s post and I agree it was a good one. You need to be on solid footing and actually you know, want to be a parent. But you also shouldn’t trap yourself into a “one more year” mentality indefinitely either.
The counter-argument. I love it! I’m glad you said that, because I was thinking “OH GOOD GOLLY DO NOT HAVE KIDS TO MAKE YOUR PARENTS HAPPY!” Although it’s nice to think about, most people would be well to consider their happiness, too. I think that waiting is definitely the thing to do for just about everyone. We’re financially able to have kids right now, but there are still some things we want to cross off the list, which is why we’ll wait just a little bit longer.
Oh, I did not put having kids to make your parents happy as a legitimate argument FOR having them… it is really more of a bonus if YOU want them. I agree on having a few certain things to do first, right now I am killing a student loan and plan on building up my HSA balance – because health costs are expensive for having kids. But there will always be one more thing you can add to that list to get done. I just don’t want to fall into that trap of “one more thing” :). Of course… if you don’t want to have kids… take the necessary precautions.
Great post Kipp! I think parenthood can be a good thing. I want to be a parent one day, need to find the other half first haha. And yes, children are expensive, especially day care. But they can bring great joy. And isn’t the goal in life to fall in love and do something meaningful? You never know, you can give birth to the next Bill Gates, so it can be a great investment!
Cheers.
Ha, I never thought we would develop the next Bill Gates (or would it be the next Zuckerberg at this point?), but you never know! But in general I think having a kid isn’t considered an investment monetarily at least.
Good luck on finding your other half!
Good thoughts here, Kipp! Mr. Frugalwoods and I recently made the decision to start trying for kiddos. Our rationale for why now is a good time covers many different aspects of our lives: we’re in an extremely stable financial position; we’re emotionally mature & ready for a baby; our marriage is the strongest it has ever been; and we want to get started while we’re still fairly young from a health perspective (I’m 30 now). We definitely put a lot of thought into when the right time would be for us.
Hey Mrs. Frugalwoods, yea timing health-wise is definitely a consideration that needs to be made. You have to be readily emotionally, but you should have a minimum standard financially. Some things may not make the best long term sense, like paying off lower interest loans than investing, but it provides better security for a lifestyle change such as having a kid.
Congrats!
But fFugal Hound won’t be jealous, will she?
There will probably be photo competitions between Frugal Baby and Frugal Hound!
You guys are so right… we’re not even pregnant yet and Mr. FW is already trying to figure out how to stage photo shoots of Frugal Baby riding on Frugal Hound’s back… don’t say I didn’t warn you
We’ve discussed it and we’re going to wait another two years before we start having kids. Financially, we’re ready now. But I’m not sure we’re ready mentally.
I have two nieces and they are great. If all kids were like them I would say let’s do it now, but I also have cousins and they are terrible. Every time we’re around them, we look at each other and say “We’re not having kids!”
There are great examples and there are bad examples, not sure how much is natural and how much of that is nurture.
Definitely need to decide on a time line for yourself that works mentally and financially, you need both!
My wife and I are mid-20s and definitely do not want kids for another 4~5 years – there’s too much to enjoy as DINKs before transitioning out of that lifestyle!
Oh yea, if you don’t want kids then you are probably better off not having them. I would rather start having them while I am relatively young (27 right now), but it all comes down to preference. Once you have some basic financial footing you can choose when is a good time for yourself!
We talked ourselves out of having kids for years – there were always reasons (some good, some bad) to put it off. We finally decided to just go all in and do it – two years ago, with no results. Having kids isn’t as easy as it looks! I’m glad we still have time left (I’m only 30) and have time to choose alternative options, if it comes to that. I agree that you should have a strong financial footing before you decide to start a family, but you don’t need to be perfect. You have to dive in at some point.
Hey Autumn, that is a very good reason not to put it off. Once you have a basic financial footing, who knows how long until a kid will actually come? At a minimum you have 9 more months to prepare, but in your case you are pushing almost 3 years! If we stopped preventing now, I would be almost 30 while the wifey would be 29 in 2 years, so about the same time frame. You don’t know when it will happen!
This is a great article. I agree that many people are needlessly denying starting a family over the idea of “waiting for the right time”. If they wait for that, then there never will be a right time.
Currently my husband and I are talking about adding a third child to the mix and how it will affect our finances.
Thanks Tennille. I think it is important to avoid that trap of continuously saying “one more year” if having a child is what you desire and you have a basic finances in place. I hope the third one works for you!
Taking on the responsibility of a child should never be done to make others happy.We have 3 children and we made it work. Our first 2 are twins so we had a little sticker shock between diapers and formula. It should be part of your plan, but sometimes its out of your control.
I agree Brian! No kids here yet, but I am sure readers may pick up on the hint that that may change in the future.
One important fact about insurance that I didn’t know prior to having my kid:
my deductible/care covers pre-natal and everything until the moment she left my body. HER insurance covers her part of the hospital stay. Thus, I am paying toward two deductibles. I’m a bit bummed, as I thought I’d get through my whole deductible (high deductible plan), but now I have to pay more since it’s really two of us. It’s going to be a few k more. Nothing I can’t handle (thanks EF), but it’s something to be aware of.
Hey Leah,
VERY good point, and this is WHY you need to look into insurance costs. We had inquired about the costs with the insurance carrier a few weeks ago when gathering information and they said the same thing. Now her coverage is a low deductible but high co-pay limit, so our out of pocket costs can reach the same as a high deductible plan, we just can’t use a HSA (stupid IMO… I don’t like the co-insurance idea… just do High deductible instead, or a what-ever deductible then 100%. Because of the co-insurance not counting towards deductible, she can’t use a HSA…).