When is the Right Time to Have a Baby, Financially?
Awhile back I wrote about 6 conversations you must have before you get married, but today I wanted to write about a particular question that a lot of couples our age have: is there a right time to have a baby, financially?
While Toots and I don’t have children, I’d be crazy to think that we won’t eventually have a few miniature gingers running around the house. For those of you that don’t know me personally, this is a groundbreaking realization as kids weren’t anywhere on the radar when we first met 7 years ago.
Is There a Right Time to Have a Baby?
Having coached hundreds of parents and having a myriad of friends that have babies, I have a fairly good grasp of the financial implications that bringing a baby into the world entails:
- Delivery costs and medical bills (pre- and post-pregnancy)
- Diapers — whether you go cloth or disposable
- Day care costs
- Food, formula, clothes, more clothes, and LOTS of toys
Oh yeah, one must not forget that these little tots eventually grow up. When that happens then we’re talking about more clothes, sports expenses, camps, maybe private school, and even college!
While reports vary, I used a handy calculator at BabyCenter.com, and they were quickly able to estimate that the cost of raising a child is around $300,000 if your baby was to be born within the next year.
Wow! Three hundred THOUSAND dollars.
While I realize these numbers can be disputed and will vary based on each household’s unique financial situation, the reality is that babies and children cost a lot of money. Especially if you want to pay for their college education.
Should Your Finances Be In Shape?
I know families that were strapped for cash, had piles of debt, and couldn’t manage money well. Despite their strenuous financial situation, they each decided that having a baby was right for them.
Is there anything wrong with that? Absolutely not! I’m not here to tell anybody that there is “technically” a right time to have a baby, financially. But what I can tell you is:
The better shape you’re in financially, the more likely it is that you’ll be able to provide some of the blessings that having a strong financial foundation provides.
Wow, I know…earth-shattering stuff there.
Does that mean the baby is loved more by a family that has a good financial footing before having one? No. Does it mean your baby is going to love you more? Probably not. Does that mean your baby will be worse off or that you shouldn’t have a baby just because you may not be able to provide them all of the worldly luxuries? No.
Our Financial Checklist Before Having a Baby
1. Have an Emergency Fund in Place
Having a rainy day fund is important regardless if you have a baby or are planning on having one in the near future. However, if you’ve been unable to save consistently, then you have to ask yourself whether or not you can truly afford the additional expenses that a baby brings with it.
We currently have $2,500 saved in our emergency fund. While I’d like for that to be more, I think that could handle most medical emergencies or issues we’d have with a baby (while taking into account our insurance).
2. Have at least $1,000/month in Disposable Income
While I’m not suggesting that a baby costs an additional $1,000/month (especially as an infant), I’d personally like to be able to ensure that we can cover all of the baby’s costs while still being able to save money in a high yield online savings account, pay down debt, and/or save for retirement.
Furthermore, if my wife would want to be a stay-at-home mom, the disposable income would need to be greater as we’d lose her income. If she continued to work, then we’d have the eventual, absurd cost, of a day care facility. From the rates I’ve seen, that can range anywhere from $700-1200/month!
3. Be Debt Free
I’d NEVER tell somebody that has debt that they shouldn’t have a baby. However, if you’re determining the right time to have a baby financially, then having debt may be a huge hurdle that stands in the way of you being able to provide for your child.
For us, we have $500/month in minimum student loan payments. While we’ve paid off $60,000 worth of debt over the past 5 years, we still have a ways to go and eliminating that debt will go a long way to helping our disposable income.
4. Take a European Vacation
For us, the right time to have a baby will also coincide with accomplishing some of our personal goals. This won’t be the case for everybody, but Toots and I have spent years climbing from underneath the pile of debt we’ve created. In doing so, we’ve neglected many of our personal goals and many of those involve traveling the world.
Having a baby would make it more difficult to travel and save for an expensive vacation, and that’s something we want to accomplish before our lives change forever.
So, Is There a Right Time?
Every person and situation is different. Some men/women out there feel called to have children at an early age and desire nothing more than starting a family. However, on the other hand, there is nothing wrong with wanting to wait to have children.
Determining the right time to have a baby is different for every couple. However, if you’re wondering when the right time might be financially, then having an emergency fund, understanding the principles of budgeting and having a decent disposable income, and being debt free may all be factors you consider.
Did you give any thought to the financial side of things before you had children? If you’ve yet to have kids, is it simply because you’re waiting to get your finances in order?
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If you worry about the 300K your baby may cost, then there will never be a right time. However, having your finances together, specially if one of you can stop working for a few months or work from home is a very positive place to be.
I don’t have kids yet but am not too worried about the financial side of things. Several friends told me having kids pushed them to find better work opportunities to give more to their kids, so you may not think you have enough, but the kid should give you an incredible drive.
@Pauline: I think you are right. We don’t have kids yet but I don’t have set financial goals to achieve before we have kids.
There is probably no better motivation and/or way of getting your priorities in line! Bringing a baby into the world will certainly help you shift the way you value family versus your career!
Great points. The saying goes that if you wait til you can afford children, then you won’t be having any. That said, my wife and I waited until we were able to climb out of all our debt til we started. I think you have to do what’s right for you as a couple after you look at all the circumstances.
Tough loss for KU on Saturday Andy! I couldn’t believe it when I saw the final score.
I think you said it well, John: finding the right time to have a baby is ultimately dependent upon each person and scenario. I was very fortunate to meet with a couple this evening that was born in India, and their priorities are very different than the normal Americans. Here in this country, it’s common to get married and have kids at a very early age. However, the priorities in other countries dictate that education and establishing a life should take precedence before having children.
It’s interesting to see how our cultures shape our mindset and thoughts on when the right time to have a baby is.
We’re waiting until we’re a little older. We want to be able to get our traveling done with and out of our minds, and we would also like to have most debts gone (including our future mortgage).
I can’t say having the mortgage gone is something I think is necessary before having children, but there is no doubt that not having that payment will free you up to do a lot of things when you decide to have kids. I know you and the boy are quite young, as are we, and I think traveling and enjoying life is important prior to having kids.
We had all these thoughts in mind when thinking about having babies…but the babies had minds of their own! Two surprises and they came along at the worst financial times we have experienced as a couple. They made the times bearable because they are the best parts of our lives and they did force us to make better decisions. In all honesty, I’m not sure I would have had the strength to get through those rough times and not sure we would have been able to make it as a couple. They give us a reason to fight through everything together as a team.
Great thoughts and testimony; I appreciate the insight! I’ve often heard from couples that have children that they were the best things that ever happened to them. On the flip side, I’ve talked to people that never had kids and they said they wouldn’t have changed a thing. lol.
My wife and I had this conversation about 3-4 years ago. The biggest obstacle for us was that she isn’t sure if she wants to go back to work full time or not. This meant that we had to wait until we could get our debt down to a point where it could be serviced from just my income.
We finally got to that point earlier this year and I now have my first son on his way in January
That’s a great story Glen and congrats on being a dad here in the near future! That’s amazing.
I do like your mindset though and I can appreciate the logical approach to figuring out how exactly you’d be able to survive on one income; I think a lot of people decide to have children before they actually think through these sorts of things. Saying that, our situation would also be similar…I can’t practically see how we’d survive on my income alone (as it’s completely unknown) especially given our monthly debt payments.
Thanks Andy, i’m super excited about it!
Obviously everyone’s situation is going to be different. I would like my wife to return to the workforce full time as we will certainly struggle on a single income, but it’s nice to have the option available to us.
We made sure that we were financially stable before having children and it made things a lot easier! But, as you know, kids don’t have to be expensive. Buy used toys for pennies on the dollar. Buy used clothes at garage sales. Take your kids to the free park instead of Disney World. We spend very little on our children and they don’t know the difference.
I love the innocence of children…they just have no clue and they can be completely happy with nothing. I often tell my clients not to spend a lot of money on gifts for their children, and instead just buy them A LOT of cheap toys. They’re more happy opening 15 gifts that cost a few dollars as opposed to opening 1 gift that cost $100.
My wife and I had our first daughter quite accidentally. We weren’t even married then. Oops. Neither of us had jobs or any savings to speak of. But we made it. Tough road, but we made it. Finances shouldn’t hold people back from having kids (because there’s never a “right” time to have a kid, right?) but it would’ve been nice if my wife and I had had something saved in the bank first!
Gotta love the “oops”!
Certainly I don’t think somebody should wait to have children if it’s something they really want, but I also think (and even based on the comments) that getting your financial life in order prior to having kids is something that makes the change and added expenses a little easier to handle. Am I making these seem to much like a financial transaction? ha. That’s not the point though…because it’s not and it’s ultimately based on your desires and call to have a family.
My girlfriend want to have kids before she is thirty. Luckily we still have a few years.before that happens because I am definitely not ready yet.
30 seems to be a decent number for people…when I mention that they seem to be okay with it, but when I say maybe 32 or so then they think that’s too old. It’s strange to see the cutoff that the status quo is comfortable with.
I’m not ready yet either. More power to you if you can hold out another 6+ years!
As a parent myself, I can attest to the fact that there is no “right time” to have a child. And having children actually does force you to really look at your finances much differently.
I would say that there are ways to cut expenses regarding diapers, formula and the like, but definitely have an emergency fund set up. Especially with kids, prepare for the unexpected!
Yeah, I could imagine that having kids is a great way to get your priorities in line and awakens you to understanding that you have more than just yourself to provide for. I do think there is a “right time” to have a baby…it’s just dependent on each person and scenario; not necessarily in regards to finances but more so with their goals, desires, responsibility, and thoughts about being a parent. I would definitely say having a kid 7 years ago was not the right time for me as I was a disaster back then.
Honestly when it comes to raising a family money shouldn’t be an issue. If you are comfortable then you should go for it. If you wait for the perfect time then you will end up waiting too long and it will be too late.
Eh…it’s never too late! I just saw a show the other week about a lady having kids in her 60s! My dad actually had kids when he was in his 40s. Now, whether it’s responsible to have children when you’re 60 is a completely different conversation, but I don’t buy the cultural belief we have that you NEED to have kids while you’re young.
I don’t know if there is ever a right time or enough planning, but it does help if you are not living paycheck to paycheck because you will have added expenses. I love the trip to Europe. We barely made it and went to Italy when I was 6 mos pregnant. If I had it to do over again, I would have never put so many things on credit during that time, but hindsight is 20/20 and we’re much smarter now.
Yeah, the Europe deal is the least important of the goals before we have children and ultimately that won’t be up to me. But…my goal is simply to enjoy our marriage and make sure we can do some things before we become full-time parents.
I also think there is never a ‘perfect’ time for kiddos, there will always be that ”one” thing on your long list of things before baby. I 1000% agree you should have an emergency fund in place first. We didn’t but we’re working on it now. Thankfully we didn’t have to worry about medical expenses of any kind and I can’t imagine the stress of having to. Children don’t have to be expensive I agree. We had a diaper party which saved us hundreds on diapers (we didn’t do cloth b/c she will be in daycare eventually) I breastfeed which saves the most, my friend is paying 40.00/week for her formula! and buy used! especially clothing which kids outgrow so fast. Although we have the debt that we do it was still the right time for us. If I waited until everything in my life was perfect it would be well beyond my fertile window! I do regret not having a ER fund but, like I explained in a post I recently did, me losing over half my income was one of the best things for us…it made us get real with money.
I mentioned this to an earlier commenter, but I do believe having kids could be a great reality check and force you to analyze your life and how you’re handling your finances. The problem is that having children doesn’t always serve as that kind of reminder for some parents.
They continue to do what they’re doing (i.e. making terrible financial decisions) regardless of having kids.
Way to tread the line there, Andy. It really can be a sensitive subject for many of us, but you said it right. There is absolutely no “one size fits all” method for determining when. For us, we definitely felt called to stop waiting on our own terms and really trust that God knows what he’s doing with us. We had a baby, didn’t have enough “disposable” income, but it has worked out well for our situation. Sure, things are extremely tight financially, but we wouldn’t have it any other way. The financial considerations were just a small part of the decisions, and we feel comfortable with our decisions.
That being said, I do like having some goals and guidelines when talking with other people about their finances and children. I will NEVER tell someone to not have a kid, but if they choose to while in a bad financial situation, I will emphasize the urgency to geth their finances in order, ASAP!
Thanks, Jake. I try to not step over the line as much as possible on these discussions because there are VERY opinionated beliefs on both sides. Maybe I should enter into politics…hah!
I like your point about trusting God and that’s very valid. He certainly knows what he’s doing and letting him take the reigns is a good thing.
I don’t have kids yet and definitely have a lot of personal goals I’d like to reach before that happens, but when it comes to financial goals, I complely agree with the items on your list. The better a family is prepared, the easier it will be to handle the inevitable unexpected events that come up when children are in their life. Raising a child is challenging enough without having money be another stressor.
I do think this mindset is becoming more popular for many people in the younger generations. Saying that, I will also mention again that I don’t think having children should be a decision that should be made simply based on the financial consequences or situation that people are in. Ultimately it comes down to whether or not you’re ready and feel that it’s time to have a baby and start a family.
We definitely have considered the financial aspects of having kids, and will run some hard numbers before hoosing to efinitely go down that road.
In the meantime, we have a lot of goals that we want to achieve for ourselves before we feel like we’re handing our lives over to some tiny alien. =)
Haha! Yes…”alien”…that is awesome. I do often believe that some babies look like miniature martians. It’s kind of creepy.
Loving this post. SO many people don’t think about the financial ramifications of having a kid, and then they get burned out on top of the other parenting responsibilities. I STRONGLY advocate firm family planning as I have seen too many families having kids in a bad financial situation.
Glad you liked it LBEE! I do generally believe people should plan and be prepared, but that’s often not the case. Frankly, I’m not sure there is any greater thing that you should plan for, but I’m also not foolish enough to believe that everything can be perfect; therefore, is there really a “right” time to have a baby, financially? As somebody mentioned above, there will always be 1 more thing on the ‘to do’ list.
Andy, these are all really good points. I don’t see anything wrong with having some financial stability before you have children. But I would like to remind people not to get too hung up on this. As you said, there really isn’t a perfect time, and I know a lot of people that DO wait for that perfect time or sign to have children. My wife and I were very poor when we had our first child, and everything worked out. Like all things in life, even if things aren’t perfect, you adapt and learn how to make things work!
Well said, MMD. Adapting and working diligently to survive through any circumstance is a great lesson and one that many parents have to face.
I don’t think there really is a “right” time because it will always be a big financial hit to raise a child. That said, I do think it’s horribly irresponsible to have a child if you cannot afford one. If you’re deep in debt and strapped for cash, having a baby will just add demands to an already stressful situation. I wouldn’t want to put that much pressure on my family. Much better to wait until you’re in a better place financially.
I couldn’t agree more and that’s tough for me to say because I do think everybody should have a baby if they want one. But, should you really bring a child into the world if you can’t even support yourself?
I try to keep in mind that even if we got pregnant now it wouldn’t be a DISASTER financially. We make more than the median household income and have no debt and other people have made it just fine on less.
We’re not really delaying kids because of finances, even though ideally I would like a higher income before we reproduce. It’s more about waiting for the right time in our relationship (IMO 5+ years married) and careers (post-PhD). I think financial readiness will tag along with the real jobs. We also don’t wan to wait too long as my husband is very concerned about declining fertility as we age. So the finances are not really at the top of our list in terms of important timing factors, I suppose because we already have them going along OK.
Thanks for commenting, Emily! I know you’re very numbers and fact-based, so I’m glad you gave your thoughts. I think it’s good to be career oriented and have the education out of the way…but that also ultimately comes down to each person. I mentioned in an earlier comment that I met with a family from India tonight, and they VERY MUCH believe that education comes WELL before having children or starting a family. I don’t think that’s the overwhelming belief here in the US though.
I had a client that was from India. When her and her husband finally had all the expected “ducks in a row” from their cultural tradition, she found that she could not conceive. It was devastating and then the ordeal and cost to adopt was huge. Fertility is definitely important to consider. There is a lot more that doctors have to watch out for when a woman turns even the young age of 35. It’s obviously different for men and yes women do have success after that age , but a woman’s peak fertility age is quite low.
My best friend had a baby 7 years ago. He was 22, and it was a surprise baby. Needless to say that he wasn’t ready for it, but I have to say that he is one of the best dads I know. His son (my god son) is healthy, intelligent and one of the friendliest kids you’ll ever meet. The best part is that he raised his son by himself (with a little help)
My point is that yes, family planning is extremely important, but that doesnt mean that you can’t raise a child properly even if its a surprise.
Great point, Marissa. You can raise wonderful children regardless of what setting you’re in, and furthermore, financial status really can have zero impact on whether or not you’re going to be a good mom/dad.
As a lot of people have already said, kids don’t have to be expensive. We have a number of friends with 1 or more kids already, and the ones who complain about how expensive the kids are also seem to have piles of toys (many with batteries) strewn about while the ones who say kids aren’t that expensive seem to buy used clothes and toys. Hmmm.
I’m sure I’ll get a more formal education when we eventually have a few mini-mes running around, but right now I really believe that kids are less expensive than many think.
I do believe kids can be expensive, but they can also be in-expensive. It really comes down to how you personally manage money: if you commonly eat out, blow money randomly, and have no financial discipline, then my guess it that will also be how you handle the expenses associated with your child.
However, if you’re responsible and frugal, then I do think you can easily raise a child without too many expenses.
Saying that…one that you can’t hide from is the cost of daycare and/or having a spouse stay home. That’s a big hit either way you look at it.
I think this is great advice, especially the $1000 in disposable income. There is just so many new costs that creep up when you have children. Everything basically costs more from cloths, to food, to water, to travel… you name it there is a cost involved.
I don’t think this disposable income is a requirement, but will definitely relieve a lot of stress.
Yeah, the disposable income certainly isn’t a requirement but it is one that I’m not sure I can get around. Simply using wisdom and being rational makes me understand that you have to have so much coming in each month to pay the bills and support the family. If you have $100 in disposable income before having kids, then it’s going to be pretty tough to make it once you do.
Saying that…there are also ways to reduce that such as moving to a cheaper place and adjusting your lifestyle.
We didn’t set too many financial goals (we’d always been frugal and savers, so it wasn’t an issue really). I definitely freaked out a bit at the responsibility though!
That’s my biggest hurdle! That’s a lot of responsibility and I’m not sure I’m ready for it. If it was something that happened and was told I’d need to step up to the plate tomorrow, then I’d be able to do it…but…I’d still be a little nervous.
We considered the financial aspect but we never though of the implications of single income. 6 years later and we survived pretty well and mommy has even taken up a part time job. Should we remained a dual income family I dont think we would have learned as much as we did when we were single income and I have to say we may not have been in as good a shape as we are now.
Interesting perspective! I’m not sure I’ve ever heard anybody say that, but it is amazing how opening your life up to different things brings new opportunities and can shape your life without you really knowing it.
In my case, I’m not sure that there will ever be a “right” time. I’m just going to be prepared for when it happens and make sure that me, my boo and our baby can survive. (P.S Diaper prices and childcare are crazy!)
lol. I love the name some of you lady bloggers have for your husbands/boyfriends. Michelle from SenseofCents calls her BF, “boy”, and now you have “boo”. Lol. I call my wife Toots so that fits in I guess.
It makes sense to be financially prepared for a baby but since most children aren’t planned that usually isn’t going to happen.
One of my biggest issues is that I’m a planner…I often see that as a good thing but I think it does hinder me at times.
Mrs.CBB and I do not have kids and were at the point where it’s have one or move on with life. We were both the type that we wanted to be debt free except for the mortgage and have our education and careers on track before starting a family. Sometimes I think the more we read the worse it is for us lol but it’s like budgeting you should be prepared. In the end if we don’t have kids I will still love my wife more than I did yesterday and live our lives to the fullest. Cheers Mr.CBB
Thanks for the honest insight CBB! I didn’t realize you were DINKS; having followed your financial situation I do think you’re more than prepared to have children if you want. Now the question comes: is that something that’s placed on your heart or not? I don’t think it’s a requirement for everybody to have children, but if it’s something you desire then I don’t think there is anything that should hold you back.
Yeah, I’d say #4 isn’t really a necessity, but the other two aren’t really ones that I think will change as time goes on. Having disposable income is extremely important if my wife wants to stay home with the kiddos.
We are not interested in having children. Certainly for any life change, it’s good to have an emergency fund and a good amount of disposable income, so I think those are good tips.
I was in your same boat about 3-4 years ago! For some I don’t think the desire ever changes, but for me personally I know I have opened up to the idea a lot more over the past few years. It will be interesting to see how things play out.
I think it is important to have insurance setup and in place as well. That could be important if something happens early on.
I read this and couldn’t believe how similar we think. We are planning on having kids in the next couple years and here are our steps that we are taking to be financially ready. Be debt-free, budget up to $1000/month for baby expenses, Have an emergency fund of six months expenses, and go to the UK next summer. Unbelievable! Side note: I know most people say that you can never be truly ready, but our hope is that we will be more ready than if we didn’t have any plan at all
Andy,
Nice article.
I was in graduate school when my wife and I had our two boys. We were financially stable at the time, but the decision was based more on my wife’s biological clock more than anything else.
She said she was “ready” to have babies and there was on turning back.
We waited until we had been married for 7 and a half years before we started trying to have kids. Before that we had done a lot of things to prepare ourselves for having kids. We got rid of all our debt, we saved up a nice emergency fund, I started creating a second income so my wife could stay home with our son, and we did some traveling including a Mediterranean cruise the year before my wife got pregnant.
Everything seemed to work out perfectly in our situation where we were able to get our finances in order, do some traveling and be with each other before we brought a child into the mix, and we’re glad we did. Now that our son is here it’s been one of the biggest blessings you could ever imagine. Also, I have to say I think some of those “how much you can expect to spend on kids” forecasts are a bit overblown.
While we waited and go everything in order, I can see the other side of the coin, however, having kids before everything is 100% set and ready.. There are times when there isn’t a perfect time to have kids, and you just have to go ahead and do it. Kids are a huge blessing, and they definitely change your life for the better. Sometimes it’s more than just a financial decision.
This is great advice. Too many people have children before they’re financially able…almost like they’ve gotten the craving for a big screen tv or ….I know…..a baby!
Cheryl & I debated for a long time before having children. We decided to have children while we were young because we wanted to be able to enjoy them as adults when we were older. Her parents are much older than mine. Now that I’m an adult my parents are closer to friends than parents. It’s great to hang out with my mom and dad and I think they also think so.
Baby is a very big responsibility on parents.
Baby should be planned. parents should be financially and mentally prepare themselves and then have a baby. Financially sound is really important as every parent see lot of dreams for their baby so they sound be financially sound to take care of him and provide him all what he wants in his life. If they are financially sound then only they should plan a baby.
The funny thing about having a baby is that when they look up at you (while you are holding them or feeding them), you don’t see the dollar signs at all.
Now, when they reach their teens and start looking at you like an ATM? That’s a different story (but I am not really complaining).
My wife just hit 3 months and we are so thankful we did some much needed planning and debt crunching before hand. We also have about $1k in disposable income to account for when the baby does start going to daycare. Between all the things you mention I would say being realistic and understanding that your life will change is key. You can never have “the right time” but you can make sure you are in a good situation.
Did you give any thought to the financial side of things before you had children? Yes! We purposely waited until we were around 30 to have children. We wanted to be able to provide the best for our children and waiting allows us to do that. If we would of had children before, who knows were we might have ended up financially.
It really depends on how much you can live within your means once you have a child. If you are willing to sacrifice driving the luxury car or that Hawaiian vacation for a pinto and a staycation, you will manage just fine.
I think if you really want to have a baby, you will adapt your finances once you have the baby. This is what happened to me. Although I was already frugal, this made me EXTRA frugal. If you keep worrying about having money for a baby and yet you want to continue to buy Starbucks in the morning, then maybe a baby isn’t for you.