“There’s never a good time to have kids—you just have to go for it.”
If you’re contemplating starting a family, chances are you’ve heard this well-intentioned advice by now.
While it’s true that little is predictable when it comes to having children, there’s no denying it’s as much a financial decision as an emotional one.
After all, the average lifetime cost of raising a child exceeds $245,000, according to the U.S. Department of Agriculture.
That’s a price tag that might leave you wondering: Does it make sense to have a baby in your twenties, so you can tackle child-related costs early—or when you’re in your thirties and, hopefully, more financially stable?
Of course, there’s no blanket answer.
But to help make some educated guesses, we took two hypothetical sets of wannabe parents a decade apart in age and tried to compare how their respective finances would be impacted in four major money areas—taxes, retirement, college costs and child care—by bringing home baby.
Meet the Parents-to-Be …
The younger couple, Emma and Tyler, are both 26—the average age at which women have their first baby, according to the Centers for Disease Control and Prevention.
Emma is an executive assistant. Tyler is a junior accountant. Combined, they make $73,000, and are still chipping away at student loans and credit card balances they accrued in college.
Although they spend nearly every penny of their paychecks, they feel emotionally ready to have a child. They’d rather be young parents—and are confident they can make their budget work with a child.
Holly and Brendan, meanwhile, are both 36 and doing well financially. Their income has grown steadily over the past few years—which isn’t surprising since women’s pay peaks at 39 and men’s at 48, based on data from Payscale.
Between Holly’s job as a project manager and Brendan’s as a human-resources manager, they make $120,000 combined. They’re only a few months shy of paying off their student loans, carry little credit card debt and contribute a portion of each paycheck toward retirement.
They purposely put off having children until they reached six figures—and now feel financially ready for parenthood.
Although Holly considers herself healthy, she knows they may have to contend with in vitro fertilization costs—22% of women aged 35 to 39 deal with infertility. In case this happens, the couple has saved up $15,000—enough to cover a round of IVF, which averages $12,400.
So which couple would fare better, financially speaking, if they had a child? We asked financial pros to weigh in.