Six Financial Issues To Consider Before You Have Children
The chances are pretty good that you will have children in your lifetime. More than four out of five people do. If you think it might be time to settle down and start a family, you might want to stop and think about these six major financial issues before you start having those children.
1. Housing
Where do you live right now? How much living space do you have? If you’re living alone or with just a spouse or significant other, you’ll probably want to find a bigger apartment or buy an adequately-sized house. Figure out what size home you’ll need based on how big your family is going to be and whether or not you’ll be able to pay for it with your current income.
2. Income Loss or Daycare
Unless you have a relative that’s willing to watch your child for free, a lot of your income is going to go down the drain for child care costs. If you have children, you have to choose between the heavy financial burden of daycare expenses or choosing to sacrifice and have one parent become a homemaker and caretaker.
3. Education
Do you have a good public school near your home? Private school costs a lot of money, and homeschooling can add up to a pretty penny depending on which curriculum you choose. Even attending the nearest public school doesn’t come cheap. You will need to come up with funds for a backpack, books, and all the accessories that your child will need to be successful in school. Don’t forget about saving for college, either.
4. Extracurricular Activities
Once your child reaches school-age, chances are that he or she will want to become involved in extracurricular activities. Gymnastics and music lessons don’t come cheap. Between sports, music classes, and other activities, you could easily rack up a few thousand dollars in related expenses. As a parent, you don’t want to deprive your children of opportunities- you want to provide the maximum amount of chances for them to discover and fulfill their dreams. The reality of the situation is that most of these opportunities cost a pretty penny.
5. Everyday Costs
This is probably the most overlooked expense, but keep in mind that a family of four uses up twice as much electricity, takes twice as many hot showers, and eats about twice as much as a family of two does. Kids are infamous for leaving lights on and letting all the heat out of the house by leaving the door open. These little expenses can begin to dent your monthly budget and make other things harder to afford.
6. Emergencies
Nobody wants to think about it, but how would you afford an emergency if something were to happen to your child? Do you have an emergency fund? How’s your credit? If it’s poor and you don’t have any other backups, now might be the time to look at credit repair options.
While you shouldn’t be scared away by the costs of raising a child, it’s always a good idea to go into everything prepared, and starting a family is no different. Having a financial plan for the next 18 years will keep you from becoming too stressed out by the costs involved with having children.
Category: Budget, Financial Planning
