How Do People Afford Kids?

Can I be really, really transparent? 

I am personally ready to have kids. At the time of writing this article I am 32, I have matured immensely over the last few years and I realize that it will (God willing) probably happen in the next few years.

But if I am being honest, we cannot afford kids because of student loan debt and daycare costs. To be quite honest, we wonder all the time, “How do people afford kids?”

It sucks saying that but it is the truth… and we're not the only ones saying it.

In fact, millennials as a whole are prolonging on having kids more and more each year. Just recently, I wrote about the sacrifices we have made to pay off student loans, and not having kids was one of those sacrifices.

So why exactly are people delaying on kids and waiting longer to have them? Because of finances.

How Do People Afford Kids These Days?

You will never be ready to have kids”

While I understand that a new baby is something you can never be 100% ready for – I wholeheartedly disagree with the conventional wisdom that you cannot be financially ready to have kids. 

People with kids typically disagree with this statement because they figured it out, which is fair enough and if the timing wasn't right they deserve credit.

However, comparing having kids in the 1970s and 1980s, heck even the early 2000s, is like comparing student loans from the 1980s to today… they are just not the same.

There is nothing wrong with being in a financial position that is more conducive for kids – and that is what more and more millennials are doing.

What is a better financial scenario for having kids?

Scenario 1:

Couple, 26 and 25, one is finishing up a Master's degree while working full time, the other is currently paying off $3,000 in consumer debt, $35,000 in student loans and the car is almost paid off.

They live in an apartment and combined they have $65,000 in debt and $4,000 in savings. 

Scenario 2: 

Hypothetical couple #2 are 29 and 28, both have full-time careers and they have no consumer debt. Both cars are paid off in full and the remaining student loan balance is $10,000. Additionally, in an emergency saving account, they have 6 months saved up. They recently put 20% down on a home and their mortgage is the same as their previous rent. 

Can both figure it out? YES

Will both figure it out if blessed with a little one? YES

However, is there a better financial situation that would be more ideal to bring a little one into the world? YES, YES, YES!

Now, I hope my wife’s mom doesn’t see this post because I know she is itching for some grandchildren, but we can not make it happen….yet.

Between the cost of daycare and just child expenses in general, we are just not in a financial position to have a little one.

Sure we could make it work if we were blessed with the opportunity, but the struggle would be real. However, my wife and I are not the only ones in this position.

With more and more Gen Y’s staying in college longer and focusing on their new careers,  the average age of first-time parents is increasing.

(Really good news! The NPR said one of the factors, besides college, resulting in the average age of parents increasing is teen pregnancy rates are decreasing)

Adults having kids later in life.

30 is the new 20.

I hear it all the time and you probably do to.

I don't feel like I am 30. Personally, I don't feel 30, look 30 or act 30 (Not sure what the exactly means). But financially at age 30 we were not ready to have kids.

However, at 32 we will be (So I wrote this in 2017 at age 30, now as I update this article at 32 I can tell you we are on pace to pay off our debt by spring 2020 so this number should hold true).

Blame student loans, blame careers, call it more responsibility – the simple truth is more and more young Americans are waiting to have kids. Women want to minimize career losses and with an emphasis on higher education degrees, people are delaying having kids.

College, coupled with a live free while you still can millennial mindset, has made the urge to have kids even seem less appealing (this is not a fact, more of an observation). Knowing a lot of changes occur once there is a child in the picture, I think you will see more and more young adults delay having kids.

Security or Siblings?

My wife and I are at a crossroads. Do we choose to have kids and putting our financial security goals on the back burner? Or do we keep crushing debt and delay for another 2 years? 

Our intentions are to have a few kids pretty quickly so they can grow up together, however, daycare throws a wrench in that plan. 

The going rate for a daycare where we live is about $250-300 a week per kid, depending on their age. I am sure the national average is right around there, if not more.

So with the crazy amount of debt we are focused on paying down each month, we could afford one kid, but a second would significantly impact our financial security.

See Also, Financial Awareness – Why We Drive $5,000 Kias

Why does money determine so much of our lives?

Money once again determines how we live. Whether we (or anyone for that matter) want to believe it, money is often the determining factor for just about every decision we make in life.

Think about it, money tells us where we can live, what we can drive, what we wear and in this case when and how many kids we can have.

So when people say money isn’t everything I politely agree and disagree. Yes, money is not everything, but not having enough to live a happy life is.

I wish that wasn’t the case but money is the reason we don’t plan on having kids for a few more years. Money is the reason we get up every day and go to work (Teaching and doctoring do have tons of rewards). 

And MONEY is probably why you are reading this post… chances are you might even be at work.

Money does not have to be the determining factor forever.

We used to think that money, and not the abundance of it, would always dictate how we live.

However, over the last few years, we have learned to really focus on paying off debt and saving for the future.

When we accomplish our financial goals we can travel and have kids with money being an afterthought. Learning how to delay gratification and put things on hold was a challenge at first. 

Delaying has become easier, but delaying on having kids is not so easy.

We know the restless nights and early mornings are not far away, but for the next 2-3 years, we are bearing down and attacking our financial goals so that we can provide a great life to our kids. 

I am not usually super open about sharing this because we typically hear, “You can never be too ready when having kids,” but with so many people in our situation, I thought sharing might help others.

There are a lot of people in our position because of college debt who have to make big decisions about kids. Not forgetting, there are still a lot of people living the college 2.0 lifestyle and haven’t even thought about kids. 

If that’s you, save this for when you are ready. If you already have kids this post is not a volunteer-ship to babysit. However, if you are like my wife and I and you are wondering if waiting is worth it I feel your struggle. 

I have learned to make our future kids the driving force behind everything we do!

Feel free to share as there is many young adults facing this very dilemma. Thanks for reading as always and I would really like to hear comments on what people think!

Q: What is something you are currently delaying?

Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $200,000 in student loans with his wife in less than four years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post and more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their chocolate lab named Morgan, working out, helping others with their debt and recommend using Personal Capital to track your finances.