Financially Speaking, Is It Better to Have Kids Earlier or Later in Life?

It costs on average $233,610 to raise one child.¹ For most, that’s a significant chunk of change. If you and your spouse are curious about the financial ramifications of having a child earlier or later in life, there are plenty of pros and cons to consider. 

Considerations About Having Children Earlier   

If you want to have children, but aren’t sure about the timing, here are a few financial reasons why you may find having children earlier in life beneficial.

Lessen Your Chance of Joining the Sandwich Generation

The sandwich generation refers to those adults who are “stuck in the middle” between financially caring for their children and aging parents. Being a part of the sandwich generation is stressful on an emotional level, and it wreaks havoc on your plans for retirement. With more financial obligations between caring for your children and parents, you have less money to put toward your own retirement. This could mean jeopardizing your future financial independence and staying longer in the workforce.

While it’s no guarantee, having children earlier in life could help you avoid being apart of the sandwich generation. Why? Because by the time your parents reach the age in which they require assistance, your children are already grown and you’ve gotten a decent headstart on your savings for retirement. (Of course, this is no guarantee and depends on the age of your own parents as well). 

Greater Odds of Having Your Parents Help Out

The younger you are when you have children, by default, the younger your parents will be as well. With millennials tackling tough economic circumstances - rising student loan debt, two recessions, rising healthcare costs, etc. - affording to have and care for a child is no easy feat.

In the state of Pennsylvania, for example, the average annual cost of infant care is $11,842, or around $987 per month.² For many families, childcare is simply unobtainable. In this particular instance, having parents of your own who are on the younger side can be a big advantage. Grandparents who have maybe just recently retired but are still relatively healthy can be a huge help to new parents - and save them thousands in childcare services. It can often be a win-win for recent retirees as well. Watching their grandchild can really help fulfill a sense of purpose in those post-work years. Plus, grandparents enjoy pitching in to help pay for grandkids - anything from new clothes to contributing to a college fund.   

Considerations About Having Children Later

Here are a few reasons why it may make financial sense for you and your partner to have children later in life.

More Time to Build & Establish Your Career

Having a child means shifting your priorities - often away from professional endeavors. In a recent survey by the Pew Research Center, 42 percent of mothers reduced their work hours, while 27 percent quit their job altogether. By comparison, 28 percent of fathers reduced hours and 10 percent quit their job in order to care for a child.³  

Having children later in life can allow both men and women the time needed to focus on building a career, propelling forward in their desired career path and excelling professionally. Once a child comes, the shift in focus and priorities is drastic (and understandably so). While it’s still very possible to work a full-time job and raise a child, you may be less likely to work late, take on more projects or go after promotions that demand more of your time and energy.

Plus, being more established in your career could come with significant benefits and perks - more schedule flexibility, more vacation days, better paternity or maternity leave, health insurance for you and your family, etc.

It’s Easier to Hit Your Savings & Financial Goals

According to that $233,610 average it takes to raise a child, you can expect to spend a little over $1,000 a month (when broken down monthly from birth until 17) per child.¹ With that in mind, how likely are you to still have money left over you can put towards important financial goals - like buying a home or second home, saving for retirement, yearly vacations, etc. By choosing to have children later in life, you and your partner are giving yourselves a headstart in making some significant headway toward your bigger financial goals. Once a child comes along, it can be hard to stay focused on long-term goals (especially retirement) when your immediate financial needs are more pressing.

If you have the advantage of planning when you’d like to have children, it’s important to take some time in weighing the pros and cons of either option. Children, just like buying a home or starting a business, are a huge financial undertaking. Talk to your financial advisor, let them know what your concerns may be, and run through some financial scenarios to figure out what may be best for you and your family financially.