December 23, 2024
44 S Broadway, White Plains, New York, 10601
THE MONEY MINDER

I want financial stability but also want to enjoy life – how can I pay down debt before starting a family?

I want financial stability but also want to enjoy life – how can I pay down debt before starting a family?

Hey Money Minder,

I’ve got a not-so-pretty, but real picture of my financial situation here. I’m looking to get my act together before diving into parenthood. Any advice on how I can tighten things up over the next year and a half?

But hey, go easy on me!

Just to give you a heads up, I’m a 35-year-old woman, married, and this only covers my share of income and bills. My partner chips in for things like home expenses, car insurance, utilities, and our vacations. Speaking of vacations, we manage to cover flights and hotels with points I rack up from work and credit cards. I also earn a bit on the side from work bonuses and fitness expenses, but I’ve left those out for simplicity’s sake. When I get those bonuses, they go straight to paying off debt.

Between us, we’ve got $85k in our 401(k)s, a $15k emergency fund, around $35k in home equity, and $75k in stock options that may or may not be worth anything. If they do pan out, it’s all going toward the mortgage and retirement savings.

On the flip side, I’ve got $330k left on the house, $35k on the car, $45k in student loans, and $45k in credit card debt (at 0% until Spring 2025). Meanwhile, my partner handles his own car and credit card debts.

We’re thinking of starting a family in about a year. I’m on track to clear my credit card debt around the time I’d like to conceive. Once that’s done, I’ll put that $3k a month toward knocking out most of my student loans during pregnancy. Post-baby, I aim to allocate around $1600 a month to daycare (though it’s probably an overestimate with family assistance) and use the remaining $1400 to eliminate my student loans and car debt entirely. My partner will cover all other child-related expenses outside of daycare.

As a final note, I’m not looking to pinch pennies and amass a fortune. I just want to be debt-free and financially secure while still enjoying life. I’ve spent the past ten years exploring the world, and I have no regrets. But before I start a family, I want to be in a better place financially than where I am now.

Cheers, Financially Fabulous

Response from THE MONEY MINDER:

Hello There,

Congratulations on taking the initiative to plan and prepare for the next phase of your life. It sounds like you have a clear understanding of your financial situation and are actively working towards securing a stable future for your family. It’s commendable that you are looking for ways to improve your financial health before welcoming a child into your lives.

From the details you provided, it seems like you have a solid plan in place to address your debts and allocate funds towards your upcoming expenses. Paying off your credit card debt before trying for a child is a wise move, as it will relieve you of that financial burden and allow you to focus on other priorities once you are pregnant. Transitioning that amount towards your student loans during your pregnancy shows great foresight and discipline.

Given your intention to maintain a balance between financial stability and enjoying your life along the way, it might be helpful to set specific financial goals for yourself and your partner. Consider creating a budget that accounts for all your expenses, including those related to childcare and other child-related costs. This will help you stay on track and ensure that you are prepared for any surprises that may arise.

Remember that financial planning is a journey, and it’s okay to adjust your strategy as needed. Stay focused on your goals, continue to communicate openly with your partner about your financial aspirations, and make conscious decisions that align with your values and priorities. By being proactive and intentional with your finances, you are setting a strong foundation for your future family.

Best of luck on your journey towards financial stability and parenthood. THE MONEY MINDER

Leave feedback about this

  • Quality
  • Price
  • Service

PROS

+
Add Field

CONS

+
Add Field
Choose Image
Choose Video