4 Financial Hurdles to Cross Before Starting a Family

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We all hope for a financially successful future. We also know that that hope takes a plan, especially before starting a family. Otherwise, the road to financial freedom could be a difficult one. Two good ways to lay the groundwork are to drop some bad financial habits and pick up some good ones.

“Good habits formed in youth make all the difference.” – Aristotle

Easier said than done. Believe me, I know. I was employed full-time with very few living expenses from age 20 to 25, and I have nothing in the bank to show for it. I nickel and dime’d my money away on $5.00 DVDs at Target, fast food, and sloppy financial planning.

4 Financial Hurdles to Cross Before Starting a Family

If you’re single, newly married, or thinking about raising babies someday, here are four financial hurdles I wish I’d crossed before starting a family.

financial hurdles1. Find out if you’re a saver or a spender.

Most people naturally lean more toward either spending or saving. They usually marry someone who is the opposite, though not always. These aren’t faults or defects. It’s important to learn that about yourself or your mate so that you can better understand one another.

For example, the minute my husband receives extra spending money from a bonus, gift, etc., he knows where he wants to spend it. He’s wired that way. I, on the other hand, stick my money in an envelope in a sock drawer, pondering over it for days or weeks, unsure of what I should use it for. I’ve come to understand that I’m not superior to my husband. He helps me have more fun by actually spending money, and I help him focus on our saving goals. It’s a cool balance.

Why do this before kids? The better you understand your financial strengths and weaknesses (as well as your spouse’s) before kids, the easier it will be to navigate the ocean of decisions you’ll make when you’re starting a family. One of you will probably want to buy all the baby equipment, nursery trimmings, and gear that you can, while the other may value putting away extra money for the delivery above that. Neither is wrong, but if you’re aware of these financial hurdles before, it will be easier to understand each other’s wishes.

2. Dial back the spontaneous spending.

In the back of your mind, you know the best way to become wealthy is to make a financial plan and stick to it, but what does that look like on a day to day basis? Perhaps you should start familiarizing yourself with what you’re already doing.

  • Bring up your online banking and view last month’s statement.
  • Pick your three most common impulse purchases (i.e. fast food, coffee, restaurants).
  • Add up how much you spent on each category last month.
  • Is it more than you thought? If so, lower it and only spend your new amount.*

*The easiest way for me to measure my spending is to carry a set amount of cash for each “impulse” category (i.e. food, entertainment, misc.).

Why do this before kids? In the short term, learning to rein in your spontaneous spending will enable you to save up for future purchases with your family, like medical bills, vacations, etc. In the long term, you’ll be setting a great example for your children when they develop spending habits of their own. Heck, this might even reduce the financial hurdles in their future!

financial hurdles3. Conduct monthly budget meetings.

Your place of employment would be in over its head if periodic financial meetings weren’t in place. Each member of the team is held accountable and can communicate his or her point of view, concerns, and ideas for improvement in a neutral space. The same is true for budget meetings in your own home. Besides the benefit of creating a good habit, other perks include:

  • Understanding better where your hard earned money goes each month.
  • Creating a better flow of communication between you and your spouse (or an accountability partner).
  • Being able to direct your money (or your debt load) instead of it directing you.

Why do this before kids? It’s no walk in the park saving up for the expenses that come with starting a family. According to the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project, U.S. hospital deliveries cost $3,500 per visit on average. You can reduce the stress of all those expenses, and the unknowns that come with them, by practicing with a budget now.

4. Practice living on less than you make.

If there’s one thing I hear from my friends with kids, it’s that they wish they would have spent less and saved more when they were younger. I’m the same way. Rather than wallow in regret like a pig in the mud, I started trying out some of these steps with my husband. We fumbled through our first budget, trimmed back on the $5.00 DVDs and delivery pizza nights, learned how to communicate about what we wanted to do with our money, then started living on just my husband’s income. It definitely didn’t happen overnight, but eventually we put every dollar from my paycheck toward our student loan and credit card debt, paying off $22,000 and becoming debt-free.

Why do this before kids? Living on less wasn’t fabulous at the time, but eventually, I was able to quit my job and be a stay-at-home mother since we knew we could survive on just one income. That moment was a dream come true for me.

“Money is better than poverty, if only for financial reasons.” – Woody Allen

What’s one of the financial hurdles you’re planning to cross before starting a family? Share in the comments below!

This article was written by Laura Harris, a fantastic writer and blogger of personal finance.

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