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7 financial topics to discuss before you have kids

Kelly Dilworth

When my husband and I first started talking about whether we were ready for a second child or if we were permanently one and done, we mostly steered clear of talking about our finances.

For us, it felt uncomfortable to discuss whether we could afford another kid.

Like many of the people I’d spoken to about the financial realities of adding to one’s family, my husband felt strongly that we’d find a way to make it work – somehow. I, however, wasn’t so sure.

I’m confident we have the resources we need to cover the basics, such as food, shelter and clothing, but I’m not so sure we’d be able to live and parent as we wished.

You might feel uncomfortable, selfish or embarrassed to talk honestly about the financial sacrifices and changes you would have to make to accommodate one or another child. I certainly did. But talking openly about these issues will help you make the best-informed decision and prepare you for any issues you might encounter.

Here are seven financially sensitive topics that are worth discussing before you decide to have a baby: 

1. What’s your first-year spending strategy?
The first 12 months of a child’s life are shockingly expensive. There are so many must-have essentials – ranging from car seats to cribs – that it can be financially overwhelming.

When I was pregnant with my son, I was floored by how quickly baby costs added up.

If possible, spend some time thinking carefully about how you would pay for those baby expenses. Would you be willing to shave costs by relying mostly on items you purchased second-hand? Or would you have to take on high-interest credit card debt to buy cutting-edge gear?

2. How can you use credit cards to cut your costs?
You may be surprised to discover how much money you can save on baby costs just by utilizing a credit card reward program.

For example, my husband and I depended heavily in our baby’s first year on the gift cards we cashed in from our rewards cards. We dramatically whittled our overall expenses by using card rewards to pay for clothes and diapers.

We also are currently using travel card rewards to help pay for a family trip.

Other financial tools also can save you money. For example, the money you add to a 529 college savings account isn’t tax deductible, but the amount you saved won’t be taxed if your child uses it for educational expenses.

Before having a baby, discuss the different financial tools that are available to you and whether you’re willing to use them. Do you mind using a credit card for all your expenses to earn money-saving rewards? 

3. Can you afford child care?
Nothing has surprised me more since having a baby than the persistently high cost of child care – particularly for toddlers and infants. 

We currently live in a high-cost area in Southern California, so we spend more than the expense of in-state college tuition on full-time child care. But even in the Midwest, where we lived previously, child care costs for infants ran as high as $1,000 or more a month.

Research the cost of child care in your area and do the math to see whether you can afford to send your child to the child care facility or home care provider of your choice. If that’s not within your financial reach, maybe one parent will have to stay home.

You may find that you need to space out when you have your children just to afford full-time child care. 

4. How much is too much for toys and enrichment?
My husband and I have been relatively conservative about the number of toys we buy our child, but I still regularly surprise myself with just how willing I am to overspend on playthings and other nonessential purchases. You may remember how one-click shopping lured this sleepy mom to overspend.

My husband and I also stretch our budget significantly to provide our son with enriching activities and experiences. Before we had a baby, I told my husband that enrolling our kids in extracurricular activities and educational experiences was important to me, and I was willing to make sacrifices to make it happen.

Discuss with your partner how you would approach spending on toys and other discretionary expenses if you had a kid.

5. How will you afford to travel as a family?
Traveling together as a group is extremely costly, especially as your child gets older. 

For example, once your child turns 2, you’ll have to pay for your child’s airline tickets. Hotel costs, amusement park tickets and other travel expenses also tend to become significantly more expensive as your child grows.

Talk with one another about how often you’d like to travel, and discuss whether you can afford another ticket for your little one. 

6. How will you swing your child’s education costs?
It’s also a good idea to think about how much you’re willing to spend on education.

Are you OK with your child attending the public schools in your area, or do you plan to send your child to private school?

Will you limit your child to community colleges or state universities or will you allow him or her to consider going to college out of state?

What you decide on these educational issues has enormous financial ramifications.

7. What if your child has special needs?
You may find that your child needs additional, specialized care or has higher medical costs than average.

Plan ahead. Discuss whether you can afford to absorb these extra expenses and talk about how much extra room you have in your budget to pay for unexpected costs.

How we’re making ends meet
So far, my husband and I have managed to afford semi-regular cross-country trips to visit grandparents, occasional date nights and enriching extras, such as children’s museum memberships, zoo trips and puppet shows.

We squeezed our finances so we could send our son to the highest quality day care we could find and hope to indulge his early fascination with musical instruments by enrolling him in music lessons once he’s ready. (Yes, I’ve become one of those parents.) If we have another child, we may not be able to afford to do any of that.

We are also in a more precarious financial position than we’d like to be now due to the nature of my husband’s work. Ignoring that reality felt irresponsible, so I eventually decided I had to bring it up. Talking about our finances in more detail and weighing potential risks made it clear we weren’t yet ready to have another kid.

Once our finances are more secure, we may eventually change our minds. But for any would-be parent, the financial realities of bringing a child into the world or adopting one is crucial to reflect on and discuss.

Your bottom line: Adding to your family is a deeply personal and complicated decision. Adding up the costs and thinking through your parenting choices may not change your mind about whether or not you want to have a kid, but it will help you to be more financially prepared.

See related: To curb spending, I’m making it harder to use my credit cards, 5 credit card tips for savvy family travel, 4 easy things I did to trim my credit card bill

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