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Message
How do you prepare for your first children financially 2 years in advance?
Posted on 3/2/17 at 9:05 am
Posted on 3/2/17 at 9:05 am
Wife and I agreed we will start trying in December when I finish grad school (that part should be fun).
So lets say we have a kid in 2 years. What do I need to start doing today?
Saving more or focus on aggressively paying off student loan debt instead? (its not a mountain by any means, say about 8k left in 2 years with the track I'm on)
We own a home I can afford the mortgage on easily, we have limited credit card debt (we keep a 15% usage approx.).
I have a solid 401k I've been accruing since I was 23 (29 now). Do I start a college fund now?
Thanks in advance.
So lets say we have a kid in 2 years. What do I need to start doing today?
Saving more or focus on aggressively paying off student loan debt instead? (its not a mountain by any means, say about 8k left in 2 years with the track I'm on)
We own a home I can afford the mortgage on easily, we have limited credit card debt (we keep a 15% usage approx.).
I have a solid 401k I've been accruing since I was 23 (29 now). Do I start a college fund now?
Thanks in advance.
13
Posted on 3/2/17 at 9:07 am to TheCaterpillar
quote:
Do I start a college fund now?
What happens if you are not able to start a family? Pay taxes and penalties to roll that into something?
Posted on 3/2/17 at 9:07 am to TheCaterpillar
I would say the smartest thing you can do to prepare for a kid is get yourself in position such that your family can live on a single income.
Posted on 3/2/17 at 9:08 am to TheWiz
quote:
What happens if you are not able to start a family? Pay taxes and penalties to roll that into something?
We'll adopt.
But seriously, lets just say we can. I was just assuming savings could be in a standard savings account, not some tax protected official college fund.
I didn't even know those existed. Do tell...
Posted on 3/2/17 at 9:09 am to notsince98
quote:
I would say the smartest thing you can do to prepare for a kid is get yourself in position such that your family can live on a single income.
Working on that now. Wife will still work part time, but long term this is the goal.
We are going over a new family budget soon to learn how to be more frugal before we add to the family.
Posted on 3/2/17 at 9:12 am to TheCaterpillar
529. Open one in the name of the kid when he/she is born or adopted.
Posted on 3/2/17 at 9:13 am to TheCaterpillar
Research 529's and the START program.
Posted on 3/2/17 at 9:15 am to TheCaterpillar
I'd pay credit cards off, and save cash. Kids are expensive, but the first year isn't that bad. You'll find you make life adjustments that offset some of the additional expenses. Wife and I ate out for dinner 4-5 nights a week before our first kid. We barely ate out at all the first year with our first one, just as an example.
Daycare, should you need it, will be your biggest expense. Be prepared for serious sticker shock. And depending on your health insurance co-pays/deductibles will add up quick that first year as well.
Having cash is the best strategy so you don't extend those credit card balances. I wouldn't worry about college until the first one arrives, then set up a 529.
Daycare, should you need it, will be your biggest expense. Be prepared for serious sticker shock. And depending on your health insurance co-pays/deductibles will add up quick that first year as well.
Having cash is the best strategy so you don't extend those credit card balances. I wouldn't worry about college until the first one arrives, then set up a 529.
Posted on 3/2/17 at 9:16 am to TheCaterpillar
I'm in a similar situation. Getting married in a couple of months and it will be almost two years before she can have a child, but she wants one ASAP.
She is aggressively paying off her student loans and I am building as big of a nest egg as I can.
I'm waiting for any college savings plan until the child is born.
She would like to stop working, but will probably end up working part time.
She is aggressively paying off her student loans and I am building as big of a nest egg as I can.
I'm waiting for any college savings plan until the child is born.
She would like to stop working, but will probably end up working part time.
Posted on 3/2/17 at 9:19 am to TigerSaints318
quote:
She would like to stop working, but will probably end up working part time.
No, she'll stop working. Prepare yourself.
Posted on 3/2/17 at 9:21 am to TigerSaints318
quote:
Getting married in a couple of months
Not sure your or her age, but my advice is enjoy marriage for a little bit first.
We've been married almost 3 years in our late 20's while we both work full time and its been so enjoyable. So much freedom and so much time to enjoy each other's company.
But, if you're at "that age" where the chance of birth defects goes up dramatically (mid-30's) than I totally understand.
Posted on 3/2/17 at 9:24 am to The Spleen
quote:
No, she'll stop working. Prepare yourself.
I essentially got mine to put it on paper she is going to work part-time. I nudged her to have a meeting with her boss about it and I witnessed a hand shake deal and some email agreements to do it.
But yeah, I eventually want her to quit if that's what she wants. She's going to be an insanely good mother.
Posted on 3/2/17 at 9:31 am to TheCaterpillar
Get out of debt as your only priority, throw more money into your retirement now, etc. I wouldn't worry about saving money honestly, I'd get out of debt.
Also, if you have any trips you want to do that aren't kid friendly in the next 10 years do them now.
Be prepared for childcare costs, you are talking between $150-250/ week. Yes a week, per kid for one under 3.
Also, if you have any trips you want to do that aren't kid friendly in the next 10 years do them now.
Be prepared for childcare costs, you are talking between $150-250/ week. Yes a week, per kid for one under 3.
Posted on 3/2/17 at 9:32 am to TheCaterpillar
For someone who recently had their first child, and my wife and I both make pretty good money here is my advice:
1) There isn't a hard $ amount to figure how much the child will add to your monthly cost. Our child has a cow's milk allergy and his formula can run around $800/month. Also we didnt care for his original daycare so we switched him to a private school daycare (which he will also attend the school later on) and that cost $850/month compared to the $600 we figured before. (Also never know with any other medical issues, hopefully your child will have none)
2) Pay off the student debt, live as frugal as possible between now and then to do it. It will be such a financial relief and not a burden.
3)Keep putting towards the 401k forever and always (up to the company match) same for your wife if applicable
4) If yall qualify for a ROTH IRA I would look into that as well, if not you can backdoor from a Traditional IRA (research will help you with this)
5) If your job offers insurance benefits, take full advantage of all of it. Figure out what works best for your situation between Traditional Health Insurance and a High Deductible policy with an HSA. My additional advice on this is for the next couple of years I would put as much towards the HSA as you can to cover any medical cost involved when your wife becomes pregnant. When your yearly enrollment comes back around right before you start trying, you may want to look back at it to see if it would make more sense to switch back to the Traditional Health insurance for the first couple of years due to kids having a lot of doctor visits the first couple of years and any unforeseen medical conditions that would also minimize your yearly out of pocket maximum and deductible.
If more comes to mind I will add back to this thread.
1) There isn't a hard $ amount to figure how much the child will add to your monthly cost. Our child has a cow's milk allergy and his formula can run around $800/month. Also we didnt care for his original daycare so we switched him to a private school daycare (which he will also attend the school later on) and that cost $850/month compared to the $600 we figured before. (Also never know with any other medical issues, hopefully your child will have none)
2) Pay off the student debt, live as frugal as possible between now and then to do it. It will be such a financial relief and not a burden.
3)Keep putting towards the 401k forever and always (up to the company match) same for your wife if applicable
4) If yall qualify for a ROTH IRA I would look into that as well, if not you can backdoor from a Traditional IRA (research will help you with this)
5) If your job offers insurance benefits, take full advantage of all of it. Figure out what works best for your situation between Traditional Health Insurance and a High Deductible policy with an HSA. My additional advice on this is for the next couple of years I would put as much towards the HSA as you can to cover any medical cost involved when your wife becomes pregnant. When your yearly enrollment comes back around right before you start trying, you may want to look back at it to see if it would make more sense to switch back to the Traditional Health insurance for the first couple of years due to kids having a lot of doctor visits the first couple of years and any unforeseen medical conditions that would also minimize your yearly out of pocket maximum and deductible.
If more comes to mind I will add back to this thread.
Posted on 3/2/17 at 9:34 am to TigerSaint1
Posted on 3/2/17 at 9:38 am to TheCaterpillar
quote:
But yeah, I eventually want her to quit if that's what she wants
New mothers have a completely different mindset than women planning to be a mother, and even expectant mothers. The mother-baby bond is a beautiful thing to witness, but it is STRONG, and no handshake agreement can trump it if it is her desire to stay home. Just keep an open mind to that and don't hold that agreement over her head.
My wife planned to go back to work after 6 months. She ended up going back, but arranging a deal to work from home all but 2 days. And she was miserable those 2 days for the first month or so. She went back full time when the first one started walking and talking.
Posted on 3/2/17 at 9:38 am to TheCaterpillar
I would also look at what vehicles yall both drive and if they are kid friendly vehicles, if not you may want to start looking into that. Also minimizing depreciating assets (boats, atv's etc..) If you can still afford them when the time comes then great, but I can assure you there wont be much time for them the first couple of years so dont wait til they depreciate more before you decide to get rid of them. Like another poster said get rid as much debt as possible while setting your family up for success later in life and not living every month cash strapped.
Posted on 3/2/17 at 9:41 am to TigerSaint1
quote:
I would also look at what vehicles yall both drive and if they are kid friendly vehicles,
Yeah, those rear facing infant car seats don't fit in the back seat of a lot of sedans if someone is riding shotgun.
Posted on 3/2/17 at 9:41 am to TigerSaint1
Both have great vehicles for kids that are both 2016's (one paid for, one not).
No other depreciating assets.
We're taking several trips before kids and I'm really milking the golf thing for all its worth
No other depreciating assets.
We're taking several trips before kids and I'm really milking the golf thing for all its worth
Posted on 3/2/17 at 9:47 am to TheCaterpillar
Yes, take the trip, play the golf, spend as much time together as possible. When the baby first comes and for the near future, you will not only be put on the back burner, you wont even be on the stove any more. But it gets better.
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