Financial Implications to Think About Before Starting a Family

For many, raising a child is the most rewarding but expensive thing they'll ever do! It's easy to get caught up in the joy of starting a family, and although getting bogged down in your finances can take away from the excitement, it isn't something you can avoid.

Having children can impact your economic situation in so many ways, from upfront and day-to-day costs to changes in tax payments and your ability to progress in your career. To ensure you can give your family the best possible future, you need to dedicate time to assessing your monetary matters in depth.

This can be quite a lot to take in, but we've broken down all the key costs you need to account for with this practical guide!

Costs to Consider

Pregnancy and Birth

Pregnancy and birth can cost very little, depending on the healthcare offered in your country or your insurance policy. In some cases, though, the fees for scans, check-ups, and hospital stays can be incredibly high, so it's vital to examine how this will affect you.

Additionally, in the lead-up to your child's due date, you'll likely find yourself decorating a nursery and stocking up on clothes, baby hygiene products, and other essentials. 

General Living

Your general living expenses, including groceries, utilities, and transport, will all be impacted when you start a family. While this may seem obvious, these everyday costs can stack up quickly, and spending even a little extra each month can make a noticeable difference in your outgoings.

Of course, this will vary significantly based on how many children you hope to have, but it's crucial to keep in mind whether you have one or ten kids!

Childcare

Childcare can be one of the biggest expenses for families, with monthly fees sometimes being as high as mortgage repayments. As a result, this is an aspect of raising kids that needs careful planning.

You may be fortunate enough to have family members living nearby who can help out, or maybe you're in a position where one parent can stay home while the other goes to work. In some cases, childcare costs can be so high that it's more financially beneficial for couples to survive off one income rather than pay for daycare.

Education

Being able to afford to put your child through college is a dream for so many parents. Between tuition fees, accommodation, and daily expenses, it's not always possible to do so without financial aid or scholarships. This is something that's worth giving plenty of thought to, especially if you're planning to have a big family.

College isn't the only education-related expenditure to think about. Unsurprisingly, those wishing to send their children to private schools will incur substantially higher costs, but you might also need to relocate to a more affluent area to avail of better public schools.

Housing

Housing may not be a major concern if you rent or own a home that's a suitable size for your family. If your place is on the smaller side, it might mean that a move will be on the cards before you start having children.

For some, moving house may never have been on their agenda. Yet, it's not uncommon to have more children than you initially planned for, or you may simply find the space feels too cramped as your kids start to grow older.

Other Factors to Take Into Account

Your Current Financial Situation

Being realistic about your financial situation is a must before you consider having children. To get a clearer view of where you lie in terms of incomings and outgoings, you could think about tracking your spending over a number of months.

You also need to think about any possible changes to your fiscal status. Perhaps you're expecting a promotion soon that you'd like to get before bringing kids into the picture, or maybe you have debt you'd prefer to finish paying off while you're still child-free.

Impact on Your Career

In this day and age, your familial status shouldn't hinder your ability to move up the ranks in the workplace, but unfortunately, that doesn't mean it won't. Though this tends to affect women more so than men, it can happen to both mothers and fathers, particularly if you work in a high-pressure environment that requires long hours and overtime.

When planning your future, ask yourself whether your role as a parent can determine your success at work and if it's something you're prepared to accept.

Your Ability to Set and Stick To a Budget

Budgeting comes more naturally to some than others, but nonetheless, it's a life skill that everyone should learn to develop. It becomes increasingly important when there are children involved. As such, it's something you should be working on before adding any little ones into the mix.

In short, if you're not the most financially responsible person when taking care of your own expenses, it's best to focus your efforts on brushing up your ability to budget first!

Insurance Policies

Everything changes as soon as children come around, including the types of insurance you take out and the specific policies you choose. You'll likely be adding them to your health insurance policy, provided you already have one, but you'll also need to think about life insurance.

Some people choose to take out life insurance when purchasing their first home, but for many, it only joins the to-do list when the first child is on the way. When you take out a life insurance policy, you'll protect your beneficiaries, usually your kids and partner, from facing financial hardship should you pass away.

Ensure Your Finances Are in Order Before Expanding Your Family

Before you bring your little bundle of joy into the world, take the time to prepare financially as best you can. Not only will you be helping to build a more promising future for your children, but you'll also have peace of mind that you've laid the groundwork.