What net worth # did your household aspire to hit before having your first child?

I know some will look at savings or cash flow and use those numbers. I'm curious how many here were shooting for a net worth number, and what that range was.

Also curious how you went about modeling out childcare costs before pre-K for the dual income families.

Other fun thought exercise…
- how are you thinking about saving for college, in a world where college may not matter 20 years from now?

Not judging anyone here. Just looking to learn.

Not true.

I think a lot of people taking this is as "what net worth should we have before trying to have a child" and not "we're going to have a child, what net worth should I try and reach to feel comfortable?".

Best advice I could give is that ChatGPT is an insanely valuable tool when it comes to forecasting finances. You'll want to do more of a deep dive, but something as simple as "I make $___, my wife makes $___, we save _% every year and want to retire in __ years. We are wanting to have __ kids and send pay for day care until they start grade school. Additionally, we'd like to be able to pay for 4 years tuition at a state school... and it will spit you out a framework.

Obviously it will need tweaking and is only as accurate as the data you feed it, and no doubt you'll be making many modifications as the years go by -- but it gives you a solid framework of what $$$ you'll need to have set aside or invested at X% to afford the kids.

I did ours based on incomes, savings, investments, retirement goals, sending kids to daycare, dental, college tuition with option to do private college and threw in an option to pivot to private grade school if we opt to go that route. Throw in some "what is the average cost to raise a child for each year" and you really start to get a great outline of where you need to be.

Naturally things like cost to raise a child each year are going to vary wildly and won't be precise, but its sourcing a good amount of data that at least gives you an idea.

Waited until we wanted kids. Neither of us had much of a childhood, so we did a lot of education, traveling, skiing, and wakeboarding. Once we were in a solid ISD and began to tire of DINKing, we had kids.
Kids are in college and we are retired. Everything turned out better than we could have hoped. One friend conveyed to me that he used to despise us for all our DINKing exploits, but he was laughing at us when he retired. Sadly, he was one of the mid 80's first home buyers and pre Covid retiree boomers. They got financially whacked on both ends. Timing is everything. No matter what you do, it will never be all good or bad.

Pay for daycare and once they start school switch that money to a 529


The rest isn't so easy to time.

We never considered a target net worth before having kids. That never even crossed our minds.

I'd budget $600-1200 per month for childcare (per child). The low end for part-time daycares and the high end for full-time.

We are still using a 529 plan for college savings. The recently allowed conversion to an IRA adds some peace of mind.

It can take more time than you think for your wife to get pregnant but it can also happen quickly. Good luck!

Diggity said:

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jamey said:

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Pay for daycare and once they start school switch that money to a 529


The rest isn't so easy to time.

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Not sure you meant this an either/or, but (as much as possible) you'll want to do both to take advantage of compounding.

those first 5 years are pretty crucial.

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Any of you start a 529 before a child is born? Would probably go that route

Proposition Joe said:

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I think a lot of people taking this is as "what net worth should we have before trying to have a child" and not "we're going to have a child, what net worth should I try and reach to feel comfortable?".

Best advice I could give is that ChatGPT is an insanely valuable tool when it comes to forecasting finances. You'll want to do more of a deep dive, but something as simple as "I make $___, my wife makes $___, we save _% every year and want to retire in __ years. We are wanting to have __ kids and send pay for day care until they start grade school. Additionally, we'd like to be able to pay for 4 years tuition at a state school... and it will spit you out a framework.

Obviously it will need tweaking and is only as accurate as the data you feed it, and no doubt you'll be making many modifications as the years go by -- but it gives you a solid framework of what $$$ you'll need to have set aside or invested at X% to afford the kids.

I did ours based on incomes, savings, investments, retirement goals, sending kids to daycare, dental, college tuition with option to do private college and threw in an option to pivot to private grade school if we opt to go that route. Throw in some "what is the average cost to raise a child for each year" and you really start to get a great outline of where you need to be.

Naturally things like cost to raise a child each year are going to vary wildly and won't be precise, but its sourcing a good amount of data that at least gives you an idea.

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Thank you, this is more along the lines of what I was looking for and your framing helps

No net worth goal. We did wean ourselves off her salary over a two year period so she could stay home for 14 years (until the third child started first grade.)

I don't know that I had a target per se. Just wanted to have some financial stability. Counting student loans, my net worth was negative $100k by the time my first child was born in 2009. But I was employed and owned my own home. Unfortunately that home contributed to my negative net worth after the Great Recession.

Diggity said:

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jamey said:

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Pay for daycare and once they start school switch that money to a 529


The rest isn't so easy to time.

---

Not sure you meant this an either/or, but (as much as possible) you'll want to do both to take advantage of compounding.

those first 5 years are pretty crucial.

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If you got a spare 25 to 30K / year sure. Our daycare was about 14K per year. We did not have another 15K to put into a 401K

Until kindergarten started because it took the place of daycare

Where are you getting those numbers? You don't need to put anywhere near that kind of money to get started with a 529.

Diggity said:

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Where are you getting those numbers? You don't need to put anywhere near that kind of money to get started with a 529.

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We had 14K and we used it for daycare.


Perhaps we could have dug up another $500 or 1K for the 529 but it would not have made much difference

But when kindergarten started we had 14K and we put most of it in the 529. We had some other costs pop up around then so we put about 10K a year into the 529


Point is if you're doing daycare, you have a lot more money at your disposal once they start Kindergarten

Net worth quickly went to zero or below, because we broke our lease and bought a 30yr mortgage

JSKolache said:

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Net worth quickly went to zero or below, because we broke our lease and bought a 30yr mortgage

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Buying a house with a mortgage shouldn't make your net worth go to zero or below zero. The value of the house in included in net worth.

As for OP question, net worth wasn't any part of our thinking before having kids. You need the ability to take care of them with food, shelter, etc. For example, our threshold for diapers was the cheapest option that didn't leak or leave a rash. That's different for every kid.

Biggest thing you can do that will impact your kids beyond the basics is quality time by being active and present in their lives. There's the secret!

Worlds Foremost Ag said:

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We never considered a target net worth before having kids. That never even crossed our minds.

I'd budget $600-1200 per month for childcare (per child). The low end for part-time daycares and the high end for full-time.

We are still using a 529 plan for college savings. The recently allowed conversion to an IRA adds some peace of mind.

It can take more time than you think for your wife to get pregnant but it can also happen quickly. Good luck!

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$600-1,200 a month should be more like $1,200-2,500 a month if you're putting them in daycare, Montessori, etc. and live in a major metro area in Texas. FYI.

I think it's irresponsible to not consider ones financial situation when deciding to have kids but agree that it shouldn't be the main reason a couple chooses to have or not to have kids. Kids are the best thing I've ever done and I would have figured out how to make it work if finances were stretched.

ktownag08 said:

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JSKolache said:

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Net worth quickly went to zero or below, because we broke our lease and bought a 30yr mortgage

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Buying a house with a mortgage shouldn't make your net worth go to zero or below zero. The value of the house in included in net worth.

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So is the mortgage, which adds a big liability to the balance sheet.