My grandparents always told me, “We never worried about having enough money for children. We just had them and made it work!” However, today, finances seem to be one of the major issues holding people back from having children, aside from perhaps a desire to be more settled, own a home, or get further in a career.
My husband and I had the conversation about when to have children a million times. Given his chosen career path (medicine) there didn’t seem to be a time that we’d be financially ready for children at all. Either he was poor medical student, a poor resident, or a brand new physician strapped down with $400,000 in student loans trying to pay them back. Anything past that and I’d be pushing it in terms of my age.
Not seeing a time when we’d be financially ready for children, we decided to have them now (or rather, a few months ago) even though he’s still in school. We didn’t make the decision lightly. In fact, we planned our finances quite a bit and worked really hard to save $10,000 before our twins got here.
10 Signs You’re Financially Ready for Children
If you’re in the midst of that conversation about when you’ll be financially ready for children, here’s my ten cents on signs that indicate you might be ready for kids.
1. You can pay all your bills on time every time. You aren’t worried about living paycheck to paycheck.
2. You have an emergency fund that will cover major issues like home repairs, car accidents, and layoffs at work. The emergency fund is in a secure location and isn’t being used for anything else.
3. You understand your health insurance policy and have calculated the amount you need to save for your heath care professional’s fee. You’re ready to call and do battle with the insurance company if they decide not to cover something.
4. If you are planning to be in a hospital for the birth, know an estimate of how much your stay will cost, keeping in mind your hospital bill is somewhat negotiable at the end.
5. Consider unforeseen issues, like NICU stays. Even though I knew multiples often came early, I still wasn’t prepared for the high NICU bill or the fees of the eight different physicians who took care of my children over a two week period. I’m happy to pay the fees for those who were responsible for my babies, and I saved money ahead of time, but I wish someone would have let me know about those possibilities and the associated costs.
6. You know how much childcare in your area will cost. You’ve run the numbers and are comfortable paying for it in addition to paying all your bills on time. You know how much sick time you can take from your own work if you need to take a sick baby to the doctor.
7. You have life insurance and have an updated policy.
8. You can afford diapers, clothes, and formula if necessary. You are ready for a myriad of issues that might require prescriptions. If you need help, read our guide on how to get free baby formula samples to stretch your budget.
9. You feel secure in your investments and believe you will be able to continue investing even though you have a child.
10. You understand that you’re going to fall head over heels in love with your baby and you’re going to want to buy them anything and everything. They’ll tempt you to break your budget every step of the way!
What am I missing? What else should you have in place financially before you have a baby? Do you feel financially ready for children? What helped you arrive at your conclusion?