How to Determine If You’re Financially Prepared to Have Children

by Tamila McDonald

am I financially ready for a baby

There is no magic number that lets a couple know they are financially ready to start a family. Instead, you have to analyze your unique situation, determining whether you have the monetary resources and confidence to proceed. While being rich isn’t a prerequisite to financial preparedness, there are a few signs that suggest you might be ready. Here’s what you should examine before you take the leap.

Do You Have a Clear Financial Plan?

While you may have a clear vision of your ideal family, if you don’t have one for your financial life, then you should get a plan in order before you have kids. Even if things likely won’t go exactly to plan over the years, having basic guidelines for your retirement, savings, and other goals is essential.

After you have a child, you are going to face all kinds of new expenses. You might want to pay for their college education, be able to enroll them in sports or music lessons, have the ability to get them a tutor if the need arises, or take them on trips to show them the world. If any of these are part of your picture, then you need to plan for them.

The cost of having a kid can be high, so you need to be ready for them as much as possible. By creating a clear financial plan, you have a reasonable framework to guide your actions, ensuring you stay more or less on track.

Can You Successfully Stick to a Budget Long-Term?

While having a financial plan is step one, the ability to stick to a budget is also critical. The best plan in the world won’t help if you can’t follow it, so, if you struggle with budgeting, you might want to wait to add a kid to the equation.

If you can’t follow a budget, then you may be setting yourself up for debt. Similarly, making your savings goals a reality may be impossible, and that can lead to serious hardship.

Ideally, you need to know you can stick to a budget long-term. If you don’t have a history of being reliable in that area, create a strict budget based on your financial plan and try and stick to it diligently for at least six months, preferably a year. That way you’ll know you can do it, increasing the odds that your budget is both realistic and that you can dedicate yourself to it when the baby arrives.

Are Healthcare Costs a Problem?

If you are getting ready to expand your family, then the ability to maintain decent healthcare coverage is a must. The cost of having a baby can come in above $10,000 even if there aren’t any complications. If you add in pregnancy care and post-birth expenses, that total can reach $30,000, all of which you’ll owe out of pocket if you don’t have insurance.

Plus, you want to make sure that your children have access to the medical care they need whenever the need arises. Even basic “well baby” exams and initial vaccinations can be costly if you have to pay for them yourself.

If the cost of maintaining healthcare coverage is a problem today, then having a child now might not be ideal. Instead, you want to make sure that you can have solid medical insurance for the long-term. Otherwise, the expenses can quickly have you in financial trouble.

Is Your Debt Manageable?

While waiting until you are debt-free isn’t necessary, having only a little debt that feels incredibly manageable could mean you are financially prepared for a child. Kids are often more expensive than first-time parents anticipate and bring a lot of financial surprises with them as they grow.

If you are struggling with your debt, then bringing a child into the mix could make that problem worse. It would be wise to get that situation under control before you bring a kid into your household.

Are You Willing to Sacrifice What You Want for Them?

When you have a child, you may find yourself in a position where you have to sacrifice what you want to make sure their needs are handled. This could mean forgoing vacations, nights out with friends, the latest gadget, and much more, all in the name of ensuring your child has what they require to thrive.

Similarly, it’s important to understand that you might not have the ability to do it all. For example, you may have to choose off-brand shoes to afford your kids tutor, skip a smartphone upgrade to pay for their field trip, or make similar trade-offs for their entire lives.

Are You Willing to Say “No?”

Every parent wants to give their child the world. But, rarely can a household afford everything kid could possibly want.

For example, your child may want the latest toy every few months. If it doesn’t fit into your budget, will you have the willpower to say “no?” If you aren’t sure, then you might want to wait to have children.

Ultimately, maintaining the financial well-being of your household has to be a priority. At times, this may mean denying your kid a “want” to make sure a “need” is covered. While it can be hard to stand firm and not indulge their whims, it is a necessity. If you aren’t sure you can do that, then you either need to wait until you feel that you can or until your financial situation gives you more of an ability to say “yes.”

After reviewing the points above, you should have an idea of whether you are financially prepared to have a child. If not, don’t fret. Instead, use what you learned to help you get ready. That way, when you bring a child into the world, you know you can give them the life they deserve.

Did you make sure that you were financially prepared before you had children? Tell us about your experience in the comments below.

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