SG Budget Babe
Asked by Anonymous
Asked on 25 Nov 2019
What are some financial indicators that I should look out for?
I tbink there is not a 'perfect time'. I have friends who have had kids very young, and while it was financially demanding for two young adults, they eventually made it work and age-wise are younger than other parents with kids of the same age.
Also, there could be couples who deem a perfect time as wife being under 30 (fertility reasons) and when husband has a stable well-paying job, and they rush into having kids - only to have it result in fights over personality conflicts etc. Some have ended up in divorce in just under a year, right after the child is born.
Spousal and family support is very key.
At the end of the day, everyone lives life at the pace which works for them!
I personally think family support is far more important than financial support. If you don't have family support, then financial support may be a substitute.
There are folks out there in SG with 6-7 kids. And they're not rolling in the dough either.
When you are financially and mentally ready. Don't be in a rush to have a kid because "you're at that age" or be pushed to have one. You and your spouse must be prepared to give up the lifestyle you currently have and have a healthy amount of cashflow in the event of an emergency.
In terms of finance, you can start a family at any time. It is possible to start and raise a family on a low to medium income. There are many subsidies and cheaper options out there. What I feel is more important is your spouse and your mental readiness, and the stage that your family is in.
Some considerations that you may have, which are financial in nature and beyond such as childcare - will one parent stop working to care for the child? are the grandparents available to care for the child? will 1 income be sufficient? If the answer to these questions are no, then you may need to send the child to infant care. There will be different subsidies depending on your family income, but ultimately there's a fixed cost there.
I used to think maybe after you settle down at work, or in your 30s.
But I am starting to find that the earlier could be better, even in 20s.
True that at this stage you may not have alot of cash on hand and that wedding, house will be 2 big ticket items before starting a family. But then if the priority becomes going for a family unit - these 2 items becomes less important and naturally you save money on them.
Take faith that hardwork will allow you to support the family. You have a lot more energy (younger) to work, and you mature quickly. Let the family support itself through hardships, and I am sure your wider family and network will be there to support as well.
In the long run, you can retire early as your children grows up, and I think a stronger family unit gets built in the process.
Honest opinion, starting a family is not based on hitting financial indicators. Rather, it has more to do with, are you ready?
Once you are ready to commit to your partner, you will then set out to plan for your finances. If you are still unsure whether your partner is the right one, sorting out your feelings is more important than sorting out your finances.
Once you have a sense of committment and responsibility to your partner, naturally you will think of your finance. This is the time to sit down with your partner and work together. Raising a family is a "together" thing. With communication, a lot of things will work, even finances. I have seen so many of my friends who get by every month but they are so happy with their partner and kids.
Having said that. one indicator you should have is a stable stream of income, be it from full time employment or stable freelance work. Unsteady stream of income really affect future planning.
Don't be intimadated by the timelines of others around you, start a family once you feel financially ready and emotionally ready to spend the rest of your life with your spouse. And these should be a two way mutual agreement.
There's no specific good time to start, but in terms of financial indicators I suppose you might want to understand your household debt-to-income ratio and try to minimize your liabilities. Once you know that you're comfortable, then certainly you can start a family anytime.
Essentially, family support is key and I'm sure your family will certainly support you so don't be too panned up about financial matters.
No perfect time because it involves romance. But if you really want to look from it from a financial perspective.
Pherhaps when you are able to deliver 2k cashflow income after decuting food/travel/income tax expenses
Top Contributor (Jan)
Firstly, have a clear understanding of your cashflow, together with your spouse. In total, we have to be transparent on our household cashflow. Here is some info on the basic indicators: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
Next, ensure that your spouse and you are properly insured in terms of healthcare and life insurance. This is in expectation of future costs and liability, including upbringing of your child through tertiary education.
Thereafter, perform merticulous calculations to understand what are the immediate, short-term, and long-term expenses associated with the birth of your child, e.g. maternity cost, diapers, confinement nanny, school. Once we established this cost, have a proper budget and planning that is capable of overcoming this cost. Here is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/
Additionally, it will be valued to have some spare cash in case of any unexpected events.
Once this is done, youur spouse and you will be financially confident to start a family.
Here is everything about me and what I do best.
In hindsight for me, I wish I started family earlier - it would reduce some of the hassles that I am currently facing.
The financials are important but it should be ups and downs of life driving the timing more than anything else. You can make do with what you have when the magic happens.
25 Nov 2019