Kids when young vs. kids when old(er)

[jjquantz]

The thread on "most important financial decision" seems to have devolved into a "no kids" vs. kids debate. I would like to hear stories about your experiences with having made the choice to have kids. How have you seen the financial impact of having kids early in life as opposed to later?

My wife and I had kids very early, I was 23 and she was 22 when DD1 was born. DD2 followed just under 4 years later. In our experience, having kids early tended to push us into a more frugal mindset than we would have had if we were childless. That frugalness then resulted in the ability to save large chunks of our income when the kids left home and our incomes increased. Of course, it is difficult to tell if the frugality might have been there anyway.

We have noticed many of our peers and near peers having their first offspring in their 40's and it does seem that this makes it more difficult for them to act frugally. They have money and aren't afraid of spending it on the kids. Not being in their shoes, I don't know how I would react, but DW and I are convinced that we would not be in the financial position that we are had we delayed child-rearing for 15-20 years.

Anyone have a story illustrating the opposite?

 

[Meadbh]

This is a very complex question because the economics are interwoven with so many social and biological factors. A very common situation nowadays is the couple who come late to choosing parenthood, and discover that they cannot become pregnant without fertility aids. They may spend many thousands of dollars in pursuit of achieving a pregnancy. The risks of pregnancy increase with maternal (and paternal) age. If it is a multiple pregnancy, the risks of prematurity, mortality and handicap are significantly increased. Handicap in particular takes an enormous financial and emotional toll. The incidence of divorce is higher in these families too.

 

[LeavingOhio]

The thread on "most important financial decision" seems to have devolved into a "no kids" vs. kids debate. I would like to hear stories about your experiences with having made the choice to have kids. How have you seen the financial impact of having kids early in life as opposed to later?

My wife and I had kids very early, I was 23 and she was 22 when DD1 was born. DD2 followed just under 4 years later. In our experience, having kids early tended to push us into a more frugal mindset than we would have had if we were childless. That frugalness then resulted in the ability to save large chunks of our income when the kids left home and our incomes increased. Of course, it is difficult to tell if the frugality might have been there anyway.

We have noticed many of our peers and near peers having their first offspring in their 40's and it does seem that this makes it more difficult for them to act frugally. They have money and aren't afraid of spending it on the kids. Not being in their shoes, I don't know how I would react, but DW and I are convinced that we would not be in the financial position that we are had we delayed child-rearing for 15-20 years.

Anyone have a story illustrating the opposite?

I agree with your thought here. I've long thought that those who have children when they have to be frugal as a result ends in the ability to save and invest later on. We had our kids when I was 30 (wife 29) and 33 (wife 32). We definitely had to learn to be frugal as she stayed home for years before she went back to work (and only part-time).

For many reasons, I would not (and did not) wait until my 40s to have children. We couldn't have done it much earlier even though we were married at 22 and 23. We spent time chasing graduate degrees and then finally a couple years getting some solid work experience before having our first child.

Now, we are about to turn 48 and 47, our oldest will enter college in fall 2015, and then it's a countdown until they are both out of the house and done with college. Hopefully the job market for the careers they choose will be good enough so that they don't have to move back in with us after college. I honestly think we will be able to save up to 60% of our income once they are both out on their own. Looking forward to that.

 

[RunningBum]

I have trouble thinking of having kids as a financial decision. It seems to me there are more important factors such as when you have the time, desire, and are emotionally ready. There are many valid reasons for people not to have kids, and financial reasons is one of them. But I just can't imagine thinking "I'd really like to have kids, I think we'd make great parents, but I'd rather not spend the money." I don't think there is anyone on this forum who truly can't afford to have a kid if they want to. I'm truly not trying to judge anyone for not having kids for whatever reason. If a couple isn't really excited to have any kids and would rather retire early, travel or spend time on their own interests, I have no problem with that. You might say that's a financial decision but if that same couple had enough to ER even with kids, it still doesn't sound like the best thing for them to have kids.

I suppose there are a few financial reasons to delay having kids. To me that would be something like when the parents have to work in different cities so one wouldn't be around at all, or if you just don't feel you live in a safe area to raise a kid and want to wait until you can move. Good schools, ok, but I think a motivated kid can do well anywhere. Mostly, I feel, some people are just more ready to have kids when they are younger, and some after a few years, and finances aren't the major factor.

Rip it apart if you like. It's just my view.

 

[LOL!]

Our kids were born as we approached 40. We were already well-established in our careers and nearly financially independent at that time. Before kids we were able to save/invest big chunks of our income. We even worked overseas for a few years. We travelled the world then, too. When our first was born, we were still renting an apartment.

Our early start on the portfolio meant that it had reached the point where it was growing annually by multiples of our annual expenses.

We always found kids easy and inexpensive. When the kids came along, we did not change our saving/investing habits at all. We were still able to save/invest big chunks of our income. Our friends and famliy provided lots of used clothing, books, toys, etc for the baby, toddler, and pre-school years. Our kids are 4.5 years apart and different sexes. We thought that both of them would not be in college at the same time, but the oldest is getting a masters degree, so there will be one semester of overlap. Nevertheless, while the oldest was in college, the portfolio was gaining more in value each year than the full cost of a 4-year private elite college education. This was because of our early start with saving for retirement or if you will, waiting until we were older to have kids. Basically, we didn't have to save for college because normal cash flow from the investment portfolio would cover the cost.

Because of our early experiences travelling and our enjoyment of that, we simply took our kids with us when we travelled. With relaxed parents who are experienced in the ways of airports, renting cars, hotels, passports, customs, and so on, adding a kid or two has virtually no impact on travel. Our kids are adept at subways, trains, airplanes, cruise ships, etc. We can send them alone to visit cousins or friends across the country without any fear.

I was able to go part-time when my oldest entered high school. Then I retired when my youngest graduated from high school. When I was working part-time, I devoted a lot of time to coaching youth sports. Both my kids begged me to coach their teams, but because of the age and sex differences, I had to switch between them. They both had the experiences of other coaches to compare dad's coaching to.

Whether one is young or old when they have kids, I don't think is really matters. One might have different experiences, but I don't think those experiences are better or worse than any others.

PS: If anybody wants advice on how to raise their kids, I am willing to share advice.

 

[haha]

Biologically much better to do it early-early to mid twenties. Speaking statistically, there is no argument that this tends to be better for the child and the mother.

However, I think that I have never known of an American man or woman to make this paramount in their decision as to when to have children

Ha

 

[rodi]

I can chime in on the later in life arguments. I was 39 when I had my oldest, 41 for my younger one. My husband is almost 10 years older than me. We married late, neither had kids from previous relationships, neither had been divorced.

Advantages both socially and financially with having kids older: We already had established careers that we didn't have to "prove" ourselves at - so we were both in the position to negotiate part time status when the eldest was born. I remained part time until I retired a few weeks ago.

Marrying late - we both had good head starts on our financial portfolios - both owned homes, both had healthy retirement savings. So merging them, we were instantly more wealthy. But still spent frugally, because of years of being single.

We made the agreement to get by on the just the larger of our salaries, and bank the other one. Even an 80% engineers salary was enough to live on.

Yes - the early years, especially while still nursing, were hard because of age and sleep deprivation - but we didn't have the added stress of career pressure or financial stresses.

Having 2 boys, 2 years apart we got full advantage of hand me downs for the younger. Being older parents, we got full advantage of hand me down cribs, strollers, and other baby gear.

I agree that adding kids to travel plans doesn't kick up the price too much - except for airfare. That was an adjustment. But once there - having kids along doesn't add much expense. My kids are well traveled.

 

[rodi]

I should add - I didn't plan to marry later in life and have the "AMA" tag on my OB file. (AMA=advanced maternal age). But I didn't meet the right man till I was 38. I know I got lucky having 2 pregnancies with little effort and no complications.

 

[aida2003]

PS: If anybody wants advice on how to raise their kids, I am willing to share advice.

You'd need to start a thread for that advice alone. I'd be curious how you went about their allowances, chores, wants vs. needs, and their puberty/teenage years...

But not to hijack this thread, based on LOL's experience it seems one factor in choosing when to have kids is one's chosen profession/career. It seems this set of parents were lucky (or they made their own luck) to have well paid careers from the start and were smart enough to save instead of blowing that money so they had a portfolio built before started their family and compounding was their BF then.
OTOH, other people have not so well paid careers and choosing to have children early might teach them frugality just to raise their offsprings and after they're gone it's like hitting a jackpot to save for their retirement. I've heard a few stories that some people started saving for their retirement in their forties and retired by early 60's.

I cannot speak for myself. We travelled quite a bit in the states before children, but started saving seriously a couple of years before getting the 1st child. If we didn't have children, I cannot tell if that money would go to additional savings/investing or to more traveling (in Europe mostly). The kids and the bug for traveling made me realize to think about the future retirement and saving as much as we can.

 

[Enjoy the Ride]

We had our kids when both of us were 30. We saved quite a bit by then. Big part of our current portfolio is from that time. We paid off all our debt and retirement/college is pretty much funded (when it reaches those time periods). Now, we don't worry about money that much. My wife switched career and went part-time. I can just chill at my job.. no need to move to get higher pay.

If we had kids in our early 20s, I think it would've been difficult to get to where we are now. I guess you never know but that's just my assumption. Like that other tread about 250k portfolio and compounding, I think asset base built from our 20s is pretty much taking over due to compounding but, if we had kids earlier, that compounding wouldn't be there even though we're saving the same amount.

 

[misanman]

Our kids were born between our ages of 24 and 33 and I think that worked out well. I've got to believe we had more stamina at that age than later and we are not so old now that it hinders being extremely active with our grandchildren. I don't remember the child rearing years as being a financial issue and now we have all that behind us.

 

[LOL!]

It seems this set of parents were lucky (or they made their own luck) to have well paid careers from the start and were smart enough to save instead of blowing that money so they had a portfolio built before started their family and compounding was their BF then.

I have to write that I never considered our careers particularly well-paid. We may have even out-mustachioed MrMoneyMustache. My spouse has never come close to exceeding a 5-figure income and I was a late starter with grad school and post-doc before my first "real job" in my late twenties. That's when our real investing started. Our agreement was to bank the higher-paid spouse's income and live off the income of the lower-paid spouse.

We were (and still are) very good at minimizing our income taxes. When our oldest started college, our family taxable income on the Form 1040 submitted with the FAFSA was well-under $100,000. Nevertheless, the outcome was "No financial aid."

 

[jIMOh]

The thread on "most important financial decision" seems to have devolved into a "no kids" vs. kids debate. I would like to hear stories about your experiences with having made the choice to have kids. How have you seen the financial impact of having kids early in life as opposed to later?

My wife and I had kids very early, I was 23 and she was 22 when DD1 was born. DD2 followed just under 4 years later. In our experience, having kids early tended to push us into a more frugal mindset than we would have had if we were childless. That frugalness then resulted in the ability to save large chunks of our income when the kids left home and our incomes increased. Of course, it is difficult to tell if the frugality might have been there anyway.

We have noticed many of our peers and near peers having their first offspring in their 40's and it does seem that this makes it more difficult for them to act frugally. They have money and aren't afraid of spending it on the kids. Not being in their shoes, I don't know how I would react, but DW and I are convinced that we would not be in the financial position that we are had we delayed child-rearing for 15-20 years.

Anyone have a story illustrating the opposite?

I don't think retirement and kids ages are linked. Meaning I could see have kids early and save later, vs save early, then have kids older. I could sell both ways.

The bigger variable is when people adapt life to save for retirement. My ex wife did not see retirement savings as a value, and that led to problems.

I am now looking for my second ex-wife, and the retirement savings is well on track. I had my kids when I was 35. Its a focus on mindset, not the age when I had them.

The women I tend to be attracted to have older kids and more established financial patterns if that matters.

 

[jjquantz]

OTOH, other people have not so well paid careers and choosing to have children early might teach them frugality just to raise their offsprings and after they're gone it's like hitting a jackpot to save for their retirement. I've heard a few stories that some people started saving for their retirement in their forties and retired by early 60's.

I'm really enjoying hearing everyone's stories. aida's quote resembles our situation - when raising our kids I was in grad school and then teaching and DW was teaching preschool and then some social work. We never were broke, but we certainly didn't have a lot of money. When the kids left home and we came into jobs that more than doubled our salaries we often had conversations that boiled down to "How do people spend this much money?" We had no trouble saving because we felt that we were swimming in money.

Getting established in a career at a young age and saving - that's what I see my kids doing. Financially, they are both way ahead of where DW and I were at their ages. I just hope that they decide to have some children along the way.

 

[W2R]

I have trouble thinking of having kids as a financial decision. It seems to me there are more important factors such as when you have the time, desire, and are emotionally ready.

+1 Well said.

 

[foxfirev5]

DW and I had three from between age 22 and 30. We always saved from my paycheck albeit very little at times. When the last one entered school full time DW went back to school for a couple years and became a nurse. She then worked for 15 years in which time she paid for college tuition (no loans) and a lake house to boot. Other than those years we never made big bucks but it worked out. Now with our third grandchild coming before age 59 I'm glad we started early. In any event it can work either way and it certainly was not a financial decision at all.

 

[Brett_Cameron]

My oldest is 33 and youngest is 10 with two in between. It is easier for me to deal with the younger ones because I am more patient and experienced. Financially it is a wash.

 

[jjquantz]

+1 Well said.

I have trouble thinking of having kids as a financial decision. It seems to me there are more important factors such as when you have the time, desire, and are emotionally ready.

Or in our case, the "Ooops factor".

 

[aja8888]

A very common situation nowadays is the couple who come late to choosing parenthood, and discover that they cannot become pregnant without fertility aids. They may spend many thousands of dollars in pursuit of achieving a pregnancy.

Good point. The latest Money magazine has a feature article about a couple in their late 30's (now early 40's) who spent $80+ K (so far) on a variety of things related to fertility aids over the last 5 year period and still have not successfully conceived a child. Not all are like this, but it is a possibility.

 

[LastOfTheBoomers]

A different spin on this thread - my mom was 43 and my dad 47 when I was born. Mom was a homemaker dad an engineer - he retired at 59

I learned all my frugal habits from them

 

[aida2003]

Good point. The latest Money magazine has a feature article about a couple in their late 30's (now early 40's) who spend $80+ K on a variety of things related to fertility aids over a 5 years period and still have not successfully conceived a child. Not all are like this, but it is a possibility.

I felt sad for this couple and I hope they get lucky soon because financially they are not well at all because of fertility issues. OTOH, did you notice that they're not so great with their finances? Their debt could've been quite a few thousands lower if not their spending. The article stated they don't go out to eat anymore but then in the 'financial advice' section they got an advice to cut their discretionary spending that tends to run $1,000/month (it didn't specify for how long they've been "wasting" their money like this though) or like letting her sister's family charge $2k for X'mas presents at a Best Buy. I thought that was crazy....

 

[aida2003]

We were (and still are) very good at minimizing our income taxes. When our oldest started college, our family taxable income on the Form 1040 submitted with the FAFSA was well-under $100,000. Nevertheless, the outcome was "No financial aid."

I need to ask then why you were turned down for the financial aid because it sounds you played your cards right. Were your assets so high that their share of 5.2% made a big dent? I'm not familiar with FAFSA, many years until we need to read and fill it out.

Still it was a good 'problem' to have, right?

 

[aja8888]

I felt sad for this couple and I hope they get lucky soon because financially they are not well at all because of fertility issues. OTOH, did you notice that they're not so great with their finances? Their debt could've been quite a few thousands lower if not their spending. The article stated they don't go out to eat anymore but then in the 'financial advice' section they got an advice to cut their discretionary spending that tends to run $1,000/month (it didn't specify for how long they've been "wasting" their money like this though) or like letting her sister's family charge $2k for X'mas presents at a Best Buy. I thought that was crazy....

Yes, they were (are) out of control I thought. Even from the start with the expensive wedding. They certainly were not starting out with a financial plan at that age. There was also a comment about Dad using his SS check to pay for something they needed (I don't have the article handy).

 

[CaliforniaMan]

Had kids in our very late 30s. Thought I was going to be the oldest dad around. Joined YMCA Indian Princess program with my daughter and then Y-guides with my son and noticed something interesting. All the dad's seemed to be around my same age! All older. Where were all the young dads?

It wasn't because of where the YMCA served, a large geographic area with a good mix of young and old. But the conspicuous absence of young dads was hard to miss.

We came to the conclusion that either being older we just either appreciated being with kids more, or maybe we just had more time. In my experience guys in their 20s tend to be more self-absorbed than when we get into our 30s. But who knows.

I don't think there is a wrong or right time to have kids or not to have them. One thing you get with kids is more involvement with the neighborhood, a good helping of delights along with a dishes of difficulties.

I wouldn't have had it any other way though.

 

[lrak]

We knew we wanted a couple of kids and spent our 20s preparing for that. Spent half of our take home pay that decade on a 4BR house in a good school district. Then we took a type of vacation we wouldn't be able to take for a decade after having kids. Had two kids in early 30s. With no mortgage my spouse can stay at home splurging on the kids and I can still max out the tax advantaged retirement accounts. We wouldn't have been able to do that having kids earlier. At the same time, if we had kids much later than we did I'd be far more concerned about age/experience related layoffs when paying for college.