Ready To Have Kids? Make Sure You’ve Reached These 5 Financial Goals First

Catherine Alford
April 4, 2019

There’s no doubt that millennials are delaying major life milestones, like buying a house and becoming parents. In 1972, the average age of first-time moms was 21. It’s now 26. And, these days, more babies are born to moms in their 30’s than to younger moms.

One of the reasons for this shift is undoubtedly financial worries ranging from student loan debt to the rising housing costs. Which begs the question, what financial milestones do you really need to achieve before becoming a parent, and can your bank account ever truly be ready for children?

Goals People Think They Should Achieve Before Having Kids

Many people have a checklist of things they think they should have accomplished before having children. These checklists can lead to uncertainty about taking the plunge into parenthood. Here are some examples:

Buying a Home

According to a 2017 survey by Discover, 82.5% of millennials want to buy a home before having children. At the same time, a quarter of young adults between the ages of 25 and 34 still live with their parents. It’s no wonder that some millennials feel home ownership is years away. Although it’s important to have a stable home for your children, you don’t have to own a house to provide that. Plus, you can save money for a down payment after you become a parent by making it an integral part of your budget.

Paying Off Student Loans

Over two thirds of millennials say that paying off loans is the number one goal they wanted to accomplish before having kids. Student loan payments can make a major dent in your finances, especially when you’re also faced with pediatrician visits and daycare costs. Ultimately, though, student loan payments can be worked into a post-baby budget, even if you have to cut back in other areas.

Paying Off Credit Card Debt

Among millenials, credit card debt is actually the most common type of debt. In a poll by NBC, 46% of millennials said that they had credit card debt. According to the survey, 16% of millenials say that they’ve put off having children because of debt.

Many financial experts, Dave Ramsey included, advise against putting your life on hold for credit card debt. He suggests moving forward with your plans to start a family, pausing aggressive debt repayment while you’re pregnant, and resuming a debt payoff plan once mom and baby are healthy post delivery.

Goals You Should Actually Achieve Before Having Kids

The truth is, there’s no law that says you have to own your own home with a fenced in backyard before having kids. There’s also no rule saying you have to be 100% debt free to provide a stable and loving home for children. Sure, being fully financially independent before becoming a parent would be a nice goal, but it’s not a life requirement.

If you do want to make sure your financial life is in order before having kids, here are some of the most important goals to pursue:

Create a Robust Emergency Fund

When you have kids, emergency expenses are inevitable. When my twins were born prematurely, they spent time in the NICU, causing us to max out our $4,000 out of pocket expenses for our insurance. Luckily, I’d saved a $10,000 emergency fund while I was pregnant knowing there could be issues. So, if possible, pad your savings even if you have to work an extra job for a while to do so. With kids, it’s not a matter of if an unexpected expense will happen. It’s when.

Plan Childcare Expenses

Lots of people decide they want to have kids and plan for childcare later. However, childcare is extremely important to consider before having a baby. If both you and your partner intend to continue working, you’ll need to pay for childcare — and it isn’t cheap. In fact, childcare is often more expensive than college tuition.

Pay Off Consumer Debt (Ideally)

Your expenses will increase with kids, so it’s nice not to have the burden of credit card debt and the accompanying high interest rates. If you are able to pay off your consumer debt before having a baby, that’s a plus.

Create a Plan for Student Loans

You don’t have to totally pay off your student loans, but having a solid plan to reduce them or pay them off is a good idea. Remember that if you can pay off your own student loans, you’ll be better able to save for your children’s college expenses so they can avoid debt in the future.

Save Money for Any Potential Unpaid Leave

Take the time to understand your company’s parental leave policy and what portion of your leave will be paid. Many companies offer partially unpaid leave. If you want to take advantage of that, plan in advance for the decreased income during your leave period.

Final Thoughts

You don’t have to complete a checklist of financial milestones before having kids. Instead, come up with a realistic budget and work slowly but surely towards your financial goals. If you have a robust emergency fund and a sensible debt-repayment plan in place, there’s no reason to put off having a baby.

Catherine Alford is a nationally recognized family finance expert who is the founder of, an award winning personal finance blog that she created in 2010.

Feature Image: Adam Katz Sinding/Le 21ème