Having Kids – The "Serious" Talk

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Having Kids – The "Serious" Talk

This is a five part blog series focused on the financial aspects of having children.  Specifically, the issues one should consider prior to bringing a child into a family.  This is part one, The “Serious” Talk.  The other four blogs will be published at one week intervals.  


The decision to bring a child into your life is one of the biggest decisions that you will make in your life.  Most people will follow the traditional route to becoming a parent.  Fall in love, get married, and have a child.  For others, becoming a parent will be forced on them by Mother Nature.  Still others will follow a non-traditional approach and decide to become a parent through adoption.  Before making a rash decision, one needs to have a very serious conversation(s) with their partners (and themselves) about becoming a parent. 

having children - the talkFirst and foremost, why would you want to become a parent?  And this question applies to either married or unmarried individuals, women or men.  Regardless of where you are in a relationship, one needs to address and understand the motivation for wanting to have a child.  Second, does your partner feel the same way?  Have the “conversation”.  Preferably numerous conversations that cover you and your partners personal desire and wish.  Ensuring both partners are in agreement and understand the purpose and intent of having a child, they then need to determine if they are emotionally and financially prepared for parenthood. 

 You’ve had the conversation; probably several conversations.  You’ve decided you are emotionally ready.  You are out of the honeymoon phase of your relationship and believe your relationship will actually work for the long haul (meaning you both communicate, compromise, and show compassion for one another).  Then again, maybe Mother Nature intervened and in less than nine months, you will find yourself a parent. 

Regardless of the method, adding a child to the household impacts the family budget in very measurable ways.  Whether this is your first child or the fourth, here are some financial matters to think about and plan for before and after the baby arrives. 


Your budget WILL change

Many expenses typically increase when you add a baby to the household, including:

  • Groceries (think diapers and wipes), baby food, maybe formula
  • Clothing and baby equipment—designer outfits or thrift store, a tricked-out stroller with Blu-ray or a gently used stroller from a yard sale?
  • Transportation costs—will you need to buy a larger, more practical, or second car?
  • Housing costs—will you need to move to a larger apartment or house, renovate/add a baby’s room, or will you simply need to push a vanity a few feet to make room for a crib? 
  • Day care costs—location, services or your own family network?
  • Insurance costs—what changes will you need to make in your insurance coverage; such as healthcare, life, and disability insurance?
  • Legal costs—such as estate planning, wills and nominating a guardian
  • Future education costs—pre-school? Public or private school?  College savings plan?

Yes, having children costs money.  But there is good news as well in the form of reduced income taxes:

  • Extra tax exemption—if eligible, you can file an extra exemption
  • Tax credits—you may qualify for one or more tax credits


Decide if one of you should stay home

In many relationships, this is can be a make-or-break decision.  Do both partners work or does one decide to stay at home?  Will it be Mom?  How about Dad?  If someone does decide to stay at home, how long will it be until they try to re-enter the workforce?  Will they reenter the workforce or is this “forever”?  Are both partners okay with the career and financial trade-off(s)? 

This is a question only you and your partner can answer.  Back to having another conversation, right?  Before you decide, review all aspects of having a two-earner income vs a single income.  Maybe both of you want to work because you enjoy your jobs.  Or maybe you have no choice if the only way you can get by financially is for both of you to work.  Then again, the financial benefits of two incomes may not be as great as you think.  Remember, you may have to pay for expensive day care if both of you work.  You’ll also have commuting and other work-related expenses. 

In order to make a rational financial decision, you’ll need to run the numbers to see how much of a financial benefit you really get if both of you work.  Then, weigh that benefit against the peace of mind you would get from having one spouse stay home with the baby.  A compromise might be for you of you to work only part-time. 


Read Part 2 – Budgeting for a Baby 

Read Part 3 – Are You Going Back to Work?

Read Part 4 – Financial Planning for Adoptive Parents

Read Part 5 – Becoming a Step-Parent

By |2017-05-09T22:13:02+00:00March 13th, 2014|Categories: Personal Planning, Uncategorized|Tags: , , , , |0 Comments

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