Having your own family is considered by most an important and satisfying milestone in life.
Increased responsibilities are a consideration, but the decision to start a new family is more complicated than you may think.
The best time for you is determined by aspects such as family dynamics, emotional readiness, spiritual readiness, and individual preferences.
Regardless of the reasons behind your desire to have a child, examining your financial situation honestly is a critical step before determining whether or not to proceed with conceiving.
Having a child brings both immense joy and unexpected costs. While there is no one-size-fits-all answer and you may never feel completely prepared, here are six signs that you're financially prepared for the additional member of the family.
Making financial sacrifices is an essential aspect of parenting. To cover all the expenses related to a child, good budgeting skills are required. If you don't already have good financial habits, adjusting to the expenses of having a child may be difficult.
What did you spend your cash on today? If all the money you earn goes toward "needs," you may need to concentrate on improving your cash flow before you can realistically plan to have a child. You could consider getting a side hustle to better your cash flow. But even more importantly, you have to know how to prepare and stick to a budget.
It is critical to also have some savings each month for unforeseen costs. Children often require numerous costly products, in addition to everlasting love and attention. They frequently incur additional costs as they grow and develop. It is a never-ending journey.
What about recurrent costs such as food, clothing, and activities?
You're probably already familiar with big expenses like childcare, and baby cribs. Smaller expenses are more prone to accumulate than larger one-off ones.
Understanding your current expenditure, divided down into needs and wants, will assist you in determining how much of a reserve you can put in place for a child.
If you are scrupulous enough, you will make sure your child has their own budget.
This is not only an important indicator, but it is also a need if you want to have children. If you have a consistent income, you are more likely to be capable of taking care of everything associated with starting and extending your family.
If you have a consistent income, you will be able to plan financially and have certainty about the costs that will begin to accrue with this new commitment. If your income is uncertain, it will be tougher to meet all of your child's shifting needs and may most likely cause you additional financial difficulty.
The worst-case situation is being forced to pick between two necessities, such as food or healthcare because your weekly or monthly income is insufficient to cover both. If you operate in a field with fluctuating earnings, such as sales, you may need to set away more money for such situations.
If you have an irregular income, you can still prepare to have a child by building a significant financial cushion beforehand and crucially, investing your money in places that guarantee periodic payouts that can plug holes introduced by fluctuations in income.
Your career is your primary source of income - whether it’s a business or employment - and you should be able to rely on it to maintain your growing family and accumulate assets.
Before deciding to begin a family, you should feel reasonably secure in your current career or in your ability to find profitable work if your present job becomes temporarily or permanently unavailable.
Here are some questions which may assist you in determining the stability of your career:
There is no doubt that life is unpredictable. Unexpected medical bills, automobile or property damage, or job changes can occur at any time. When a newborn is involved, any unforeseen expense becomes significantly harder to manage.
This is among the first and most important steps toward financial stability. Especially if it involves someone other than you! In the event of an unanticipated emergency, three to six months' worth of expenses should be saved. If you have an irregular income, you might want to even save for longer.
You can use this fund before having children to pay for things like a flat tire, home repairs, or to cover unemployment. After bearing kids, the list grows to include more doctor appointments, unanticipated babysitting demands, and various important things.
As an outcome of having a baby, your monthly expenses will surge, therefore if you're establishing security plans, you'll have to adjust your savings rate to match the rising costs.
You should also prepare for much more than just emergencies; having enough money on hand to cover many months of childcare costs, bills, and newborn supplies will be beneficial too.
Many people feel that they should be debt-free to start a family. However, given that Central Bank Governor, Patrick Njoroge in 2021 warned that the country was witnessing a crisis in household debt largely fuelled by unregulated digital lending platforms, waiting to be completely debt-free may not be tenable for many.
Rather than trying to get rid of all your debt at once, focus on managing it. Make your bill payments on time, utilise cash if possible, and consult a financial expert if necessary.
Dave Ramsey, a personal finance multi-bestselling author, advises potential parents to only allow debt to control family plans in the most extreme circumstances, such as during bankruptcy processes.
How will you pay for a visit to a doctor if your baby needs one? Do you have the proper insurance? When you decide to have a child, there are hospital expenses, paediatric bills, pregnancy and postpartum medical expenditures for the mother, and so on.
Many of these costs will be covered by health insurance, which may also provide you with doctor appointments, and some services for new parents. When making your decision, make sure you get health insurance that covers both you and your baby.
Consider also reviewing your employee healthcare benefits or personal health insurance cover such as NHIF. It's critical to be aware of the services available so that you are prepared before your child arrives.
Many workplaces offer paid parental leave, others don't. So you should be aware of your options and make plans to adjust necessarily.
Have you noticed that the bulk of the issues we discussed require you to set money aside for various costs? Good.
The wonderful experience of having your first baby is loaded with unexpected costs as well as overwhelming delight. When deciding how to deal with the uncertainty of a new child, a steady income will serve as a stress-relieving buffer.
Budgeting and maintaining your expenses will give you freedom when it comes to charges. Having an emergency fund ensures your capacity to deal with unexpected circumstances.
Finally, health insurance is essential for covering the costs of you and your child's medical expenses.
To savvy parenting!