When people consider to plan a family, finance budget include cost of having children. It comes after one has learned the fundamentals of personal finance, also called “the third stage of personal finance”.
Today, the cost of having kids hit the personal finance of many people, and the extra money depends by as expensive is the plan people choose.
If you don’t have children, you don’t have to spend for them now, or spend for them in the future. The money you spend on them you can spend on other things as making reservations for an cruise, or buy clothes and stuff.
You no need be paying a lot extra on the mortgage, because your mortgage will be paid off in less years. You reduce your retirement contributions, and still having a confortable amount of money to decide as spending.
Also, if you don’t have children you see your balancing saving for, medical needs, and life insurance premiums. In general, if you have kids:
- You’ve need to build a larger cash cushion.
- You’ve need to delay paying off your debts.
- You’ve need to reduce your retirement contributions.
When people add these extra cost in their home finances it’s easy to understand why many of them not arrive to the third stage of personal finance.
In my view, is much harder reaching the third stage of personal finance once having kids. Today, each child costs us about $1000 per month.
That’s the total amount for health insurance, childcare, and the additional life insurance policies that we took out when they were born, without including what we spend each month for clothing, food, entertainment, toys, and so on.
Also, when people add the extra cost for future education, it’s easy to see why they don’t feel they’re even remotely close to the third stage of personal finance, despite how well they’re have done with the fundamentals.
