By guest author June, she’s a new blogger over at Dinks.co, read about her journey!
After marriage, one of the first questions that many young couples get is, “So, when are you going to have kids?” My partner and I have gotten used to the question, which has been repeated in a variety of forms in the years since we have gotten married. The truth is that while we do want kids, we are also enjoying our lives without them. As a two income household without any children, we have been able to reap financial rewards from our decision to put off starting a family. This will ultimately put us in a better position once we do decide to have children.
We Are Better Able to Manage Our Home
The first major purchase that we made as a couple was our house. While we love our home, it requires quite a bit of time, money and effort from us. We spend a lot of time on improvements, and have put quite a bit of work into make it our dream house. Without kids in the picture, we can devote our weekends to things like retiling the kitchen or adding on a deck. These not only increase our enjoyment of the place but they also increase its value — something that will be useful if and when we decide to sell. Putting off having children has allowed us to take our starter home and turn it into a beautiful showpiece.
Being child-free has given us more than time to do these home improvement projects. It has given us the money to purchase high quality tile and top of the line appliances to replace broken or outdated ones. We can handle mishaps with relative ease (such as when the old hot water tank broke) because we are not spending $1000+ a month on daycare.
We can also put more money each month towards our mortgage. Based on a mortgage calculator, the few hundred dollars that we add to our mortgage payment every month will shave more than 5 years off of our mortgage — along with tens of thousands of dollars in interest payments. Waiting to have kids allowed us to make this happen, which will free up our money later to devote to other things, like saving for college.
We Can Pay Down Debt Sooner
Each of us came into the marriage with certain debts, like student loans from college. We also had some credit card debt that had to be addressed. Because we each earn a healthy salary, we are able to dedicate ourselves to paying down our debt, focusing ourselves on a particular strategy (the debt avalanche) to become debt-free before we become parents.
We know that once kids arrive, certain expenses cannot be avoided — diapers, clothes, new clothes and shoes, car seats and more. By devoting our extra money to debt now, we can start off on the right financial foot while we have the spare cash.
High interest rates can make it incredibly difficult to get out of debt. That is why we are so devoted to putting as much money as possible towards our high-interest debt. By waiting to have kids — and taking the financial hit of setting up a nursery, maternity leave and so forth — we can chip away at our biggest debts until we pay our debt off early.
We Can Save for Retirement More Effectively
Finally, by waiting to have kids, we are in a better position to save and invest. With two incomes and no children, we have more financial freedom than we otherwise would. This gives us the ability to max out our 401(k)s, contribute to Roth IRAs, and even start investing to maximize our nest egg. If we currently had children, saving for that dream retirement would be much more difficult.
Once we have kids, we would either be bringing in less money, or paying more each month in order to earn the same amount. One parent would likely need to either stay home from work or cut back to part-time, or we would be paying a fair amount of money for child care. This significantly reduces the amount that we can contribute towards retirement and other savings and investment.
On top of that, we would also have to start contributing to a college fund, paying for numerous other expenses, and otherwise plan our finances in part around our child. While the joy of a baby would be worth it, we know that we aren’t ready yet — which is why we are taking advantage of being child-free for now to maximize our saving and investing.
There are many financial advantages to having two incomes and no kids. The ability to manage our household better will give us an edge in the future, when our home has greater value and we owe less on it. We can also use this time to pay down our existing debts, and to continue to save and invest as much as possible. By taking all of these steps, we are positioning ourselves to be in the best place possible when we eventually do decide to become parents.