Finances play a pivotal role in our lives. More so if you’re having kids with needs that have to be met by parents who are financially ready. Hence, finances have been a major contributing factor for millennials preferring to have fewer children than their past generations.
According to CDC data, the US birth rate tumbled down to 4% in 2020 which is the lowest record level. It means there were only 56 births per 1000 women, which is almost half of births since 1960.
Why is being financially ready a major contributing factor to having kids though? Let’s learn about it from this comprehensive article that answers all the related questions to the topic of finance and its relation to children.
Are family and finances related?
Finances are not always the first things that hit you when the idea of expanding the family is passed around. However, being financially ready is definitely a contributing factor that cannot be dismissed and helps to determine the right time to have kids.
When financial aspects are abundant, it relaxes the mental toil and regulates positive energy to think about becoming parents. Finances help to get rid of any disrupting factors and discuss the matter with more sincerity. It also removes the societal pressure and snarky comments from other people or family members.
How to know if you are financially ready?
If your earnings are not stable and have a volatile nature, then you should first regulate them. For example, if your earnings are not steady, make sure to get stability first and think about having kids later.
However, life is like a rollercoaster and you don’t know when any event hits you unless you can predict the future! Hence, you should create a robust financial foundation that can help you through a few setbacks in life. You can create a bulletproof balance sheet that allows some wiggle room for error.
How much money do you need for a newborn?
- You first need a good financial base to have a baby. This amount will vary from parent to parent but you need a simple estimation for all needs.
- You need an estimation of your medical bills which you can enquire from your insurance company to know about how much maximum money you will contribute from your pockets.
- You need to know about the needs and wants of the baby and their costs. For example, clothing, diapers, and bassinet, etc.
- You also need post-birth or prenatal services like lawn care, doula, and housekeeper. You also need to expand your budget for the added requirements.
- You have to understand that having a child is more concerned with the money that comes in every month or day rather than the amount of money that you already have. A child is an ongoing expense that you might have to manage for a minimum of 18 years.
What are the current costs of becoming a parent?
As per the data from USDA, having a child can cost you over $15,000 per year. Many people forget about the expense that there is also accompanied pressure on the cash flow if they have a baby. For instance, they might feel the urge to renovate the home.
In earlier days, people could manage to have a baby, paying a mortgage from the current budget, but now it puts extreme pressure on the cash flow.
also know about: 10 Ways To Mentor Kids About Money
Advice for people who are still unsure
If you are still unsure about having a child and finance is a major factor, that is not a problem. If you are desperate to have a child as soon as possible but are unsure about your money status to afford it, then assess your current spending pattern and budget. Is your spending in alignment with your goal? If that is not true, you will have to reform your habits and make changes in the area to enable cash flow for becoming a parent.
Remember, becoming a parent is not only about money. Your baby will also need presence, commitment, love, and attention first. You can save more money by asking for help and hand-me-downs and maybe try to enhance your income.
You cannot only expect money to be a single factor but take into consideration all the other factors that a child needs. If necessary consult a financial planner. Hence, you are now well on your way to welcoming a new member without financial constraints.
