There is no fixed number for how much money you need before planning kids, but you must have financial stability. It means you have a secured job and a healthy emergency cushion. Having kids is the most beautiful experience in your life, but it also brings long-term commitment.
In your late 20s or 30s, you start wondering if you should have kids, and if so, are you financially ready? You will have to be emotionally, mentally, and above all, emotionally prepared. Now the question is when you should plan kids.
A rule of thumb says that you should be financial strong before having kids, and it does not matter if you have turned 35. Of course, you will try to conceive before your biological clock is tickling, but thankfully you have the chance of getting pregnant until 40, so in the meantime, try to build a lot of wealth.
Tips to know if you are ready to have kids:
There is no right age to start a family, but it makes sense to do so when you are sure that you are financially ready.
Do you have an emergency cushion?
Though you do not need a lot of money stashed away, you may need funds to dip into when your baby arrives. It must be big enough to cover expenses of six months worth of your living cost. Well, you have read it many times – what is so new about it? It is vital to remind you to have an emergency cushion of sufficient size because money will drain quickly after your baby arrives.
You will be away from work for a couple of months, and not all companies provide paid maternity leave. In fact, some companies do not wait for you to be able to join back the company.
Some people, until a baby arrives, think that they will join the office after recouping, and there will be no impact on your finances because you and your significant other are both earning money. This is a plain hallucination that shatters when a bay arrives.
Your baby needs you, and the beginning years are so crucial that you will hardly find yourself separated from your baby. It is undoubtedly hard to raise a child when both parents are working. You can send your baby to daycare or hire a babysitter, but it will undoubtedly cost you a lot of money. It can cost you more than your monthly income.
Day care is cheaper when your kid is about two-years-old. However, it will still cost you somewhere between $700 and $1,000. It is vital to remember that the unexpected can happen at any moment.
You may undergo labour before time, or your baby may be required to be kept in the intensive care unit for a couple of days. This will add up to your medical expenses. Despite a great insurance plan, you will likely need additional money, and your emergency cushion will support you at that time.
Do you have a stable career?
Having a stable career is paramount before you plan your baby. Whether you have a full-time job or a business, you must have been earning money consistently. 100% security does not exist. If you are a full-time employee, you may undergo a temporary phase of unemployment, or if you are an entrepreneur, your business’ sales graph may decline.
These events are temporary, but you must have savings to tide you over unless you bounce back. You must have the answers to the following questions:
- How do you maintain a work life balance?
- Does your job offer any flexibility?
- What benefits does it offer you, and are you satisfied with your job?
- How soon will you likely land a new job if you do not fit in your current company?
- What if your business stops producing revenues? Do you have an alternative?
- What else will you try out if you cannot find a similar job or survive your business?
When you started your career, you may have relied on loans for unemployed students with bad credit in case of emergencies, but you cannot rely on loans every time after a baby arrives. The financial world is completely unpredictable, so do not let it keep you from raising your child the way you want.
Have your settled your debt?
Debt is largely responsible for eating up your money. Your expenses will immediately shoot up when your baby arrives. Think beyond diapers and food to calculate the monthly cost. If you have some outstanding debts, you will likely suffer from meeting all of your expenses smoothly.
If an emergency crops up, you will face more complications. Before you plan a baby, you should try to settle all of your outstanding debts. Start building good credit habits by paying off credit card bills on time.
You will likely be having big loans after having a baby, for instance, a mortgage and a car loan. Apart from your emergency cushion, you should have enough money salted away like the down payment for a mortgage or a car. Improve your credit score so you can avail of lower interest rates.
This will not put a burden on your finances. As you will be paying for a lot of baby-related expenses, you will have to make adjustments with other costs. Your financial situation likely seems favourable at the time of planning a baby, but when your baby arrives, you may start feeling chaos.
If this chaos is temporary, you may fill the gap with guarantor loans non homeowners, but if it seems enough, you will have to take significant steps. For instance, you may have to downsize your house. Shifting to a smaller home may cover your additional expenses. You may have to put off the plan of buying a car and dip into the down payment you have put by for it for other fees.
Raise your income
Even if you feel that your financial situation is superb, you should try to raise your income. Having a side gig can help you have cash that you can use to raise your baby. In some families, husbands do full-time jobs and wives during pregnancy try to do freelance.
If you do not need additional medical care during the gestation period, you should try to utilise your leave period to make extra bucks. Every penny is worth a lot. Raining a baby may require you to spend a lot of money. Therefore, building your wealth before having a kid is imperative.
The bottom line
Before you plan a baby, try to be financially ready to raise them. Raising a bay can be very expensive, and financial life is unpredictable. You should consider all aspects – your current financial situation and your futuristic financial situation – so you do not end up facing any difficulties in rearing your child.
Building an emergency cushion and settling your current debts are the two most important aspects to consider before planning a baby. Consult a financial counsellor as they can guide some essential tricks and tips. However, you will also have to estimate what suits your financial situation carefully.
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