Apologies for not posting and being a bit MIA but since giving birth to my son almost 3 weeks ago, the last thing I wanted to do was to sit down and “work”. With a newborn and toddler now, my free time is definitely limited. In fact, I had to sit down and force myself to write this post.
What happened to all the motivation I felt that prompted me to write How I am Turning My Maternity Leave into a Mini Retirement? Honestly, I don’t feel the least bit guilty about wanting nurse and cuddle my newborn and play with my toddler all day. I told myself I would be patient and not too hard with my expectations on what I would do with my time off.
Everyday activities that used to come so easy to me now feel like a chore, including budgeting. When I was at work, I would log in daily to update my budget with the latest expenses and income from our accounts. It was easier to do it at work because I was in front of a computer all day. While at home, the computer is not a part of my everyday routine. So instead of reconciling the budget on a daily basis, I’ve been doing it more on a weekly, bi-weekly basis. Seeing the way my budget routine has changed due to the new baby has also prompted me to look at how having kids changed my financial goals and habits.
Here are the 4 noticeable changes in the way I go about accomplishing my financial goals since having kids:
Less Disposable Income
Before we had kids, I was a really good saver and considering all of the added expenses since having kids, we still do a pretty good job at saving. But there is no way around the expenses of child care, diapers, 529 Plans and all of the other things that come with having kids. This significantly cuts into our disposable income and reduces our ability to save more. Luckily for us, we don’t spend frivolously and keep the child related costs to a minimum. We also try to avoid buying unnecessary toys, expensive clothes and always look for deals for activities.
Less of a Risk Taker
In my 20’s and without kids, I had far less cares in the world. Pre-kids, I was more inclined to take financial and business risks. Back then, I bought real estate, started a magazine and a vending machine business. I was able to take more risks compared to now because I was the only person I had to worry about. If something didn’t work or if I lost money on a venture, I was the only person affected by it. Now with a husband and two kids, my financial decisions and actions don’t only affect me, so I have to make sounder/safer ones. This leads into my next point.
More of a Long Term Planner
Now that I have kids, I think more long term about the future. Pre-kids, I lived more in the moment. I didn’t have a clear picture of where I wanted to be 10-20 years down the road or what I wanted my life to look like in retirement. Since having my first son, we have begun to properly plan for the future. We now save the maximum into our 401K’s and pre-tax retirement accounts, have life insurance and have done full estate planning.
I mentioned in an earlier post that in my 20’s, I wanted to retire by the time I was 30. Now, at 33 and still working, having kids has actually prompted me to look at ways in which I can exit the rate race earlier than the standard age. Some may say that kids would have the opposite effect on their financial goals due to the increased expenses it takes to raise kids. While it’s true that if we didn’t have any kids at all, I would be able to aggressively save more and hence retire even earlier, my kids give me the motivation to save and plan for a future that I don’t think I would otherwise be as motivated to accomplish. Ultimately, I would like to be able to spend more quality time with them in their formative years while living life on my own terms.
We are still working towards the overall goals we have as a family, its just the smaller day to day things like budgeting I find to have less time for. I am well aware, I am in the thorny stages of parenthood with a newborn and toddler. Perhaps, as I get more in a groove and routine, I will feel more inclined to “get things done”.
So if you have kids, have they been a motivation or derailment in accomplishing your financial goals?