7 Signs You're Financially Ready to Start a Family


There are no two ways about it; having kids is expensive. The USDA estimates the cost of raising a child from birth through age 17 to be an astounding $233,610. This figure includes food, housing, transportation, health care, clothing, child care and education, and miscellaneous costs. And anyone with children knows that they remain an expense far past the age of 17.

Understanding that having children is a lifetime commitment both emotionally and financially is a great first step in the process of deciding when to start a family. But what comes next? How do you know that you are financially ready to handle the responsibility of starting a family?

There is no definitive answer to this question because there is no magic income or savings number that can dictate when you are ready for a family. However, there are some benchmarks and indicators that can assist you in making this life-altering decision. Here are the signs that you are financially ready for kids. (See also: 15 Unexpected Expenses of a New Baby)

1. You have a clear financial plan

Having a clear vision of where you would like to be in the future is extremely important. And though things rarely go exactly as planned, it is still important to put a plan in place. Planning for your retirement, and setting clear investing and savings goals, is crucial.

Your financial plan should include things like a college fund, sports, music lessons, and all of the other things you want to expose your kids to. Will one parent stay at home for a while? How many children are you planning to have? Do you have aging parents that you may have to assist in the future?

You'll also want to set aside money specifically for "kid stuff" such as baby proofing the house, child care, tutoring, equipment for extracurricular activities, and the list goes on. The cost of having kids is never-ending, so that must be accounted for in your overall financial plan.

2. You stick to a budget

A financial plan establishes the ultimate destination, whereas a budget acts as a GPS and governs the day-to-day details. If you struggle with budgeting, you may want to hold off on starting a family until you master the habit. Kids can throw your finances completely out of whack, and if you don't live by a budget, you can quickly find yourself drowning in debt and unable to save for retirement or your children's future. (See also: Stop Using These 5 Excuses Not to Budget)

3. You have decent health care

If you are considering starting a family, decent health care is a must. When you have a child, you become responsible for their health and wellbeing. And while health care is expensive, you have to value the physical and emotional wellbeing of your family over having nice things.

Take a look at your current health care policy to see what adjustments you need to make. Your plan should change as your family changes. When your kids are babies, it's best to have a plan that is comprehensive to cover the "what-ifs." New parents need to be able to take a baby to the doctor whenever they sense something isn't right. Some of those trips may result in the doctor simply reassuring them that the baby is fine, but that peace of mind is priceless. (See also: The One Question You Need to Answer to Choose the Best Health Care Plan)

4. Saving is one of your top financial priorities

In order to provide stability for your family and for your future, saving money has to be one of your top priorities. Savings — emergency, rainy day, retirement, and college funds — are your source of security when life gets unpredictable. At the very least, an emergency fund with six months' to a year's worth of living expenses can protect your family from an unexpected expense or job loss. Before you add kids to the mix, work toward saving at least that much. (See also: How to Find the Savings Strategy That Works For You)

5. You have little debt

If you have (and value having) little to no debt, this is a sign that you are financially ready to expand your family. Kids are expensive and full of hidden financial surprises. They grow faster than expected and come with gifts and talents that need nurturing. And nurturing comes with a hefty price tag.

You should aggressively eliminate as much debt as possible before you grow your family. This means getting rid of student loans and paying off credit card debt as much as you are able to. It is impossible to anticipate every expense you will have with kids, but you'll want to free up as much money as possible so you can provide your family with appropriate health care, child care, and education options. (See also: 7 Easy First Steps to Paying Off Debt)

6. You know how to live frugally

Having a family is a sacrificial endeavor. Before you have children, you must come to grips with the fact that you can't have it all and do it all. The ability to stretch a dollar and pinch pennies in tight times is a necessity. You have to know when and how to cut costs to ensure you can provide for your family long-term.

Start looking for ways to cut costs before your children come. Visit the dollar store, start thrifting, and embrace the DIY lifestyle. Figure out a system of meal prepping that will save you both time and money. What skills and abilities do you already have that can translate into savings? Can you cut your child's hair, alter their clothes, or tutor them yourself in math? Evaluate what you already have and figure out how to put it to use.

7. You view family as an investment

The last sign that you are ready for kids directly relates to your perception of family. As a parent, viewing your kids as an investment will help you make solid financial decisions that will yield high returns. It is imperative that you analyze your financial decisions and make each one count. Maybe in lieu of buying your kids the newest sneakers, you'll get them a tutor. Instead of purchasing the latest gaming system, you'll invest in music lessons or science camp.

Investing in your kids sets them up to win in life. This means saying "no" to indulging their every whim. There's nothing wrong with buying your kids designer clothes, of course — but you must ask yourself, is that a good investment and is that the best use of those funds?

Growing your family can be one of the most rewarding decisions you'll ever make. But it certainly comes at a cost. Going down a financial readiness "checklist" is a smart guideline that can help set you — and your future kids — up for a successful and financially stable life.

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