TTTC but Nervous about Finances

BGoperadiva · October 2013

Hello all!

I am relatively new to thebump.com, although I have been reading a bit and starting to become more familiar with things. My husband and I will be married 5 years next month, and we have recently begun discussing TTC. However, I am super nervous about actually conceiving because of finances. We both went to college and had to pay for it on our own - needless to say, we did not make sound financial decisions and have quite a lot of student loan debt. We also both work, and while mine is a steady income, he works on commission (with a possibility of moving up to salary - but it could be a few years away).

We do not have much of a savings right now, but I am actively working to remedy that. I am 32. Our families both live 2 hours away, but we do have a lot of friends that would be willing to support us that live near us. With our outstanding debt, there is absolutely no way that one of us could stay home, so we would have to find daycare.

I just feel like everything is against us. I know this is a lot to pack into one post. Does anyone have any suggestions? Should I be so concerned about finances, or just see how things all work out? I am afraid if I wait too long, I will miss my window of opportunity, and I am really starting to get baby fever.

FemShep · October 2013

I posted the info below a few weeks ago, and you may find it helpful. You don't necessarily need to be completely out of debt, but you should at a minimum have 6 months of living expenses in savings, as well as address some of the items listed. In addition, please don't worry about missing your window of opportunity. I had my first at 32 and second at 39; you have lots of time and being financially prepared as well as physically and emotionally prepared for parenthood will be a huge help. Before you TTC, think about a "financial checkup" to go along with a physical one. Do you have STD insurance? You can't get it once you're PG, so sign up now. Do you and your DH have life insurance worth at least 5x your incomes? There's another item to make sure you have in place. Can you afford daycare? Depending on where you live, infant daycare can cost $1000-$3000/month. A good way to boost your savings would be to live on a "baby budget" for a few months and put the money you'd spend on daycare into your savings account. If you take maternity leave, you may not get paid; do you have enough in savings to cover the missed salary? And do you have enough to buy all of the gear a new baby requires? Even if you get many gifts, figure between $500-$1000 for the bare minimums, including things like a car seat, crib, and mattress you really shouldn't buy used.

Twinkie0612 · October 2013

I would make a budget and start researching costs (insurance, daycare, diapers, formula, etc). Start looking at if the additional costs of a baby will fit into your budget. If it doesn't you need to find a way to either increase income or decrease costs. The money doesn't just work itself out.

dogperson11 · October 2013

DH and I were in a similar situation. We buckled down and payed off some of the student loans. We've also saved up several months living expenses to use for maternity leave. I know people say you're never really ready, but financial stress is the last thing you'll want when you've got a newborn. I'd focus on making a budget, sticking to it for a few months, and saving as much as you possibly can.

BGoperadiva · October 2013

Thanks for the advice everyone! This is something that I've been thinking about for a while now, and I think these are very practical things to consider. I am glad to know there are some people who think like I do. When you are surrounded by people who are just like "Oh you'll never be financially ready to have a baby, so just have one already!!!", you tend to feel like you are over thinking things.

mrsquannab · November 2013

I just posted about babies and money-- should've looked around more to see how recently other folks have posted about it.

Hubby and I will not have 6 months living expenses squirreled away... but we're off BC and are NTNP. We set aside $8,000 for Baby Bump fund, have money emergency fund growing in another savings account (aiming to have 2 months living expenses by end of summer 2014), and are continuing to save in our general long term savings account.

We did do some financial modeling to determine that we can afford healthcare costs of the baby + daycare on our current salaries, and how that would impact our projected ability to save. (We already have life insurance, STD, LTD, etc in place.)

But, I'm not going to stress out about it any more. No need to hold off your life forever... God will provide if you have faith.

BGoperadiva: What have you decided so far?

mrsquannab · November 2013

P.S. Check out this quick/assessment on if you can afford to have a baby: https://money.usnews.com/money/blogs/alpha-consumer/2008/06/12/can-you-afford-a-baby

barely · December 2013

@mrsquannab "god will provide if you have faith" I love it!

Mysterious_wife · December 2013

Barely5feet said:
@mrsquannab "god will provide if you have faith" I love it!

This is one of the most infuriating responses people give. I wish all of the newbs will close their pie holes and think before posting. So what if she doesn't make her savings mark? Does God love her less? What if someone has IF? Do god feel she is unfit?

hoffse · December 2013

OP, check out the Money Matters board on the Nest. I'm not just giving it a plug because I'm active over there - the people on those boards have some great collective experiences and will talk hard numbers with you if post a budget. I'm no accountant (or wealth manager), but I am a lawyer and I do a good bit in tax and estate planning. That board also has a couple of accountants, realtors, etc. Plus some other folks who managed to get out from under an enormous amount of debt to the point that they even own their own homes outright in their 30s and 40s. It's a great board. My perspective on this:

1) The emergency fund depends on your circumstance. If you are in a job where you might get laid off at any moment, then you do need 3-6 months of your SPENDING stashed away in case you lose your job. If, however, you are in a field where jobs are generally stable and relatively plentiful, your e-fund only needs to be enough to cover all your insurance deductibles simultaneously. Because if your job is pretty stable you would really only be tapping into the e-fund if your house burned down or if you were in a car accident. I might add $1,000 on top of that deductible amount for things like your A/C breaking. Though most of us on MM have a slush fund and then a true e-fund, and the A/C repairs would come out of slush.

2) Student loan debt isn't "bad debt" unless it's to the degree that you can't pay it back. And if that's the case, call the loan servicer and see if they can put you on a longer payment period. You will be paying more in interest, but your monthly payments will go down, and you could always use windfalls, raises, etc. to pre-pay your new loan obligations when you are able. All that said, student loans also can't be discharged in bankruptcy, so I prefer to pay those off before, say, a mortgage.

3) I'm like the retirement crusader on the MM board, but it's so important I can't stress this enough. A very (very) basic rule of thumb is that if you start saving 15% of your gross income at age 25, you can stick to 15% for the rest of your working life and have enough to live on in retirement age. But if you wait until your early 30's, you need to increase that to 20% for the rest of your working life, unless you have a windfall (a massive raise, an inheritance, etc.) that lets you make up for lost time. Investments are strange things where the first couple of years typically don't feel like they are doing much... but once that seed money has had time to start to grow, eventually it just snowballs. The trick is to be contributing early enough for that snowball to be huge.

I know that things happen in life that might affect your retirement contributions, but I would absolutely take retirement into consideration before TTC. I really believe that the best thing you can do for your children is not be a financial burden on them in your old age. You and your kids can get a loan for college - you can't get a loan for retirement. And if you live long enough (I hope you do), you might spend 30+ years in retirement.

4) You also need to consider life insurance and very basic estate planning with small kids. Both you and your husband need enough life insurance to replace your incomes until the kids are old enough to live on their own. I think it's also a good idea to have enough to pay for college and perhaps help with graduate/professional school as well. H and I also plan to have enough to pay off our respective student loans and any house we buy. Again, if you buy this while you are young it's very cheap (maybe a couple hundred bucks per year for term life). And it's so important. Estate planning - again it will cost several hundred dollars for a small-shop lawyer to do this, but having wills in place is important with little ones. You need directives about who will have custody over them if you and your husband pass.

5) Hospital costs - for most couples, this is the single most expensive part of the pregnancy process. Call your insurance company and try to get details about exactly what this will cost. Find out how they will bill your baby once s/he is born and find out how they will bill out of network doctors if one is called while you're delivering.

6) Daycare - yes it's $$ but if you need to work, you need to work. Do some digging and find out exactly what that costs. I live in a city (southern), and one of the best daycares in our city is $850/month. That's a lot but it's nowhere close to the $3000 somebody mentioned earlier. It varies wildly based on where you live, so you need to do that research yourself.

7) Finally, BUDGET. I can't stress this enough. And if you don't know whether your're spending too much on a particular category, post your budget in MM and folks will tell you where your money waste is coming from (we all waste money - it's just a matter of figuring out where). Track every penny and be honest with yourself about your spending. Denying bad spending habits doesn't accomplish anything. And the best way to identify these bad spending habits is to track every penny for a couple of months and then look at the big picture.

JordynLeighx3 · December 2013

I totally disagree with that money calculator. I don't need to have 5-10k stashed away in addition to having all the other things they rule out as "necessary"

mrsquannab · December 2013

Mysterious_wife said:

@mrsquannab "god will provide if you have faith" I love it!
This is one of the most infuriating responses people give. I wish all of the newbs will close their pie holes and think before posting. So what if she doesn't make her savings mark? Does God love her less? What if someone has IF? Do god feel she is unfit?

@Mysterious_Wife: Please go back and re-read my original response. Your questions are attempting to insinuate things that I never said or expressed in my reply.

BGoperadiva : Just want to ensure you that I understand your dilemma. My hubby and I used to worry about whether or not we have enough as well... but I am of the mindset that if you wait until everything lines up perfectly, you may be waiting too long. I was responding to your post to offer this perspective and am genuinely curious to see what you have decided.

Ducktale · December 2013

First of all, OP, you have some time. 32 is not too old. Regardless of your age, you should not try for a baby you cannot afford. I hate the phrase "if you wait for the perfect time it will never happen" (and other variations) because too many people use this as an example to try for a baby when they just cannot afford one. I am NOT saying that's you, OP. I just caution against using that phrase. While there may be no perfect time, there are certainly stupid and irresponsible times (again, not necessarily you, I have no idea). And whatever you believe about God providing, he also gave you brains to hopefully make wise decisions, patience to wait until you're financially capable, and the ability to work to earn an income to support said child. I have yet to see him drop money out of the sky, so I wouldn't count on that.

msheppard0831 · December 2013

OP - thanks for the post, I am in a similar situation. I've been married a little over a year but I've been with my husband for 7 and we are really getting baby fever. I am a Virgo and total planner so I keep thinking about all the money too. We have lots of student loans too but we live a comfortable life as far as paying bills and being able to to do things we want to do. I've hear the whole "you will never be ready so just do it" also and it is not very comforting to someone with a planning brain!!! Good luck and let us know what you decide. I'm thinking my current pack of bc will be my last so its starting to feel real! PS - thanks to whoever it was that mentioned STD - I never thought of that so its something I will need to look into.

SmileyJay · December 2013

Around this time last year we briefly considered TTC and just ran the numbers. I was so shocked at what it would cost us to add a dependent to health insurance and the cost of full time child care!! I still don't know how some people do it. We know people who make way less money than we do that somehow make it work. All I can figure is that we all have our set of ideals and some people don't have the luxury of a safety net.

Since then, our jobs have become more stable and our income has grown by about $20K/year since DH finished college. That completely changed things for us and I know we really just got lucky a few times. The main thing that helped us is we have always lived frugally... we own our cars outright, have netflix and an htpc instead of paying $100/mo for cable, have cheap cell service, plan all of our meals, budget, etc. But we enjoy saving money so it doesn't feel like a chore at all.

We have had to sit down and talk honestly about our finances and how we want our futures to look. We decided together that for our family we would prefer to have student loan payments that are manageable for the next 8 years (paying the minimum) than delay having our first child for 3-5 years to get them paid off first. We are able to manage the payments along with savings and adding in the expenses of a child or two. Things could always change, but for now that is where we are at. We hope to have 2 or 3 children and would like to have the first sometime next year. I'm 24, he turns 26 next month.

The great news is that just by paying the minimums in 3 years we will have extra money from dropping PMI, so that will be about the time we would be considering a 2nd child... and in 8 years we will no longer have student loans and that would be around the time of child #3. So even if our incomes don't increase a cent, I feel positive about our financial future. I tend to see the glass half full, though!

Want a personalized experience?

TTTC but Nervous about Finances

Re: TTTC but Nervous about Finances

Choose Another Board

Search Boards