Having Kids While in Debt

Having Kids While in DebtShould we have kids while paying off debt? How much of a financial burden are they, and should we be debt-free before we have children?

I think that’s the wrong question with the wrong mindset. Instead of wondering when you should have kids, you should focus on what kind of life you want them to have when the kids finally come. Let’s not raise our kids living paycheck-to-paycheck. They end up learning that paycheck-to-paycheck is the only way. Wanting to be debt-free before having children is fine, but then in the same thought, people consider going further into debt to buy a house because raising a kid in an apartment is unacceptable in their mind. The truth of the matter is that having kids do not ruin a financial plan. Parents making the wrong financial decisions ruin their own plan.

Having a Baby with Debt

The cost of having a baby can range from a few thousand dollars to $20,000. Pregnancy or delivery complications can increase this cost. The cost of having a baby is unavoidable for most people. It’s easier to manage this expense when you do not have debt. However, there are things you can do to pay for having a baby while you are in debt because you get 9 months to plan for this expense most of the time. Plus, hospital bills aren’t due for another month after that. If you are working your debt-free plan with intensity, then you should have no problem saving $1,000 to $3,000 each month once you know you are having a baby. You and your spouse should be able to pile up $10,000 to $30,000 in those nine months! If you cannot do this and want to be debt free before you have kids, don’t expect to have kids anytime soon because you’re not getting after your debt with intensity.

Having a Baby before Owning a Home

“If we cannot buy a house, we cannot start a family!” Usually, this is said, as mentioned before, right after saying we can’t have a baby until we clean up our debt. It’s mostly just an excuse to keep up with your friends and families because they all have houses. There is plenty of room in a one-bedroom apartment for a crib. This really has nothing to do with having a house for a newborn. This gets back to what plan do you want to follow. If you want to get out of debt and have an emergency fund in place before you buy a house, then follow that plan. I know that plan works. If you want to follow a different plan, then do that. I have seen other plans work, but I do know 80% of Americans live paycheck to paycheck and having a mortgage with all their other debt is not helping their situation.

How Much Do Kids Cost

How much do kids really cost? According to the USDA, the average cost of raising a child until they are 18 is around $233,000. That’s around $13,000 a year, or $1,100 a month. That seems ridiculous for most families. It’s an average, and that’s way more than just the basic cost of raising kids. Higher income families inflate that number. Even according to the USDA’s data, the higher the income, the “costlier” it is to raise kids. This is lifestyle inflation! You do not have to spend more on your kids just because you make more.

Kids cost whatever the parents spend on them. Some things are not optional like medical expenses and car seats, but other necessities cost whatever you want to spend. You can give each of your kids a 200 square-foot room of their own in a brand new house, or you can put the boys in one room and the girls in another room with bunk beds. You can buy a brand new SUV for $60,000 because you want a reliable vehicle and so that your kids can be safe, or you could buy a few thousand-dollar vehicle which will keep your kids just as safe and be just as reliable. It’s not your kids who are making these decisions. It’s you making the decision on what type of lifestyle you want.

Stay-At-Home Parents

My wife and I have three* small children. After we adopted our first child, my wife became a stay-at-home mom, and our income decreased. After realizing we needed to save more, we decreased our spending while having three kids in the house. Some of our expenses have decreased because of having kids. We eat healthier, which ends up being less expensive over-all, and we spend our time on walks, bike rides, and in parks instead of restaurants and other expensive entertainment.

I think having a parent stay home with kids is a great idea, but it’s ok if you do not raise your children that way. One bad financial decision people make is not changing their lifestyle spending when their income drops because one parent stays home with the kids. Instead of living within their means, they do stupid stuff like reaching for a credit card to supply all their kids’ wants, buying a house they can no longer afford, and getting that $60,000 “safe and reliable” vehicle on payments because someone made them feel bad for having just a few toys for their kids, renting, and buying a $10,000 safe and reliable vehicle.

Whether or not you should have a baby while in debt or while you are living in an apartment is way above my pay grade. Having kids doesn’t have to derail your financial plan. What will you do if it happens right now? What will you do if it never happens? Follow the plan so that you can become debt free and save an emergency fund. This way you are prepared for one of the biggest changes that you will have in your married life whenever they come.


*Life keeps changing, and we now have number 4 on the way.

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