Have A Net Worth Goal Before Having Children: How About $1 Million

Children are expensive. The more you love your children, the more expensive they will likely be! Therefore, you should have a net worth goal before having children. This way, you can provide them the world without getting overly stressed about your finances.

Money is constantly a top three reason why couples fight. And once you have children, you are guaranteed to fight more often already!

You will want to give your children the best of everything, which can sometimes cause you to go overboard. For example, you might feel like you need to pay for the most expensive private university when a public university will do. The more you can strengthen your finances before having kids, the better.

Now that I'm a 46-year-old father of two young children, I've been reflecting on whether the financial goals I set in my 20s were necessary in order to have children. I have a couple of friends whose families were ruined because they were always under monetary stress.

The average cost to raise a child is around $250,000 from 0 – 18 years old. In an expensive coastal city, you may have to budget closer to $1,000,000 for the first 18 years. If your kid goes to college for four years, add on another $100,000 – $400,000.

Further, if your kid expects you to pay for their BMW and starter home as an adult, you've got to add yet another $200,000 – $2,000,000!

A Net Worth Goal Before Having Children May Be Necessary

I knew all the statistics regarding the cost of having children before I had children. Living in San Francisco, where the median-priced house is now ~$1.8 million, requires a health income and solid net worth.

The last thing I wanted was to have children and feel financially strained every day. Further, I didn't want to have children and still have to work 60+ hours a week and travel a lot for business.

The lack of generational wealth is why there is so much anxiety by HENRY parents who live in big expensive cities. Due to the high cost of living and wanting to give everything to their children, these parents never feel like they are ever really pulling ahead.

I didn't want to feel this way.

As a result, here were my goals before having children:

  • Have a $1 million net worth
  • Own a three bedroom, two bathroom house in a safe neighborhood
  • Be in a stable career by age 30 or at least be on the right track

I clearly remember having these goals because a buddy at my first job told me about his $1 million net worth goal before having kids. He was a old 24-year-old first-year analyst at Goldman Sachs because his parents had held him back one year. He'd gone to an expensive prep school and then attended Yale.

To him, he needed at least $1 million before feeling ready to be a dad because he wanted his kids to go the same educational route as he – prep school, private university.

As for me, I didn't know exactly what I wanted. All I knew at the time was that I had a chance to make a good amount of money through my career if I survived the finance industry.

As an impressionable young man who lived in Manhattan, a net worth goal of $1 million sounded good to me, so I went with it. 

Too Aggressive A Net Worth Goal Before Having Children

Because I had a $1 million net worth goal, I logically focused on my career, saving, and investing. There was no time for family.

I don't remember ever once thinking in my 20s that I wish I had a kid. All I thought about was how big my year-end bonus was going to be and whether or not I was on track to get promoted to Associate, Vice President, Director, and finally to Managing Director (MD). I

Despite all my focus on climbing the corporate ladder, I never got to MD because I worked in a satellite office. The head of my desk worked in New York City and wasn't even an MD. Instead of relocating to Hong Kong or New York City and then waiting for years, I decided to leave as a third-year Director at age 34 with a severance package.

Now that I'm a father, I think how crazy it would be not to have had my son. I wish I hadn't focused so hard on my career so I could have had him sooner – ideally three years earlier. The best age range to have a baby is between 32-34 in my opinion.

Given your kid will be one of the people you love most in your life, you will naturally wish you had him or her for a greater percentage of your life.

Too Much Delay In Having Children

My aggressive net worth goal was one reason why I delayed getting married until I was 31. This is even though I knew my wife since I was 22.

Before 31, I didn't feel financially stable enough to support a family. If my spouse decided to be a stay at home parent then I would really struggle. There's no way I wanted to go into a marriage without a strong feeling of financial security.

At the age of 28, I had assumed a massive $1,300,000 mortgage. That's what it took to finally buy a three bedroom, two and a half bath house in San Francisco back in 2005 (goal #2). As a second-year VP, I had also taken on a lot more client responsibility. This meant a lot more stress to perform. Then, of course, the financial crisis hit me like a tsunami.

But it's funny because we got married right in the middle of the financial crisis at the end of 2008. I figured I had waited long enough. Losing lots of wealth made me want to hold onto the very person who was there since the beginning.

The memory that sticks out the most from the financial crisis is our 16-person wedding party on our favorite Oahu beach.

Fertility Rates By State

Have A Reasonable Net Worth Goal Before Children

Looking back, having a $1 million net worth goal before having children was completely unnecessary. My parents raised my sister and me just fine without being millionaires. Why the hell did I ever think I needed $1 million to be a competent father?

Answer: Peer pressure and the high cost of trying to achieve a middle class lifestyle in an expensive city. Be careful about letting other people's lifestyles influence your own, including mine!

That said, I do believe having your financial house in order is important before having children. Raising a child is truly one of the hardest things you'll ever do. You'll be constantly tired, worried, and stressed. You'll lose your “me time,” and some romance.

Plenty of couples divorce after having kids. This is even though they know happily staying together is best for the people they love the most.

Think about that folks. They couldn't work out their differences for the sake of their children. Relationships take work! Hard work.

Combine Biology With Finances

I believe the ideal age to have children based on biological and economic reasons is in your early 30s (32 to be exact). Therefore, let's look at my handy-dandy net worth target by age chart to see what a more practical net worth target should be before having children.

Ideal age to have children based on net worth targets and biological reasons

If you have a baby between the ages of 30-32, I suggest having a net worth of between 2-3X your gross income. If you want to have kids sooner and can still accumulate 2-3X your gross income at a younger age, then great.

For those of you who end up having a baby later, at least you can find comfort in a potentially higher net worth. As older parents, not stressing as much about money and your careers can really be very beneficial for a happy household.

Net Worth Goal Examples Before Having Children

Let's say two of you make a combined $100,000 a year and live in San Antonio. You're both 31 years old. Having a combined net worth of between $200,000 – $300,000 will give you some breathing room.

For example, one parent wants to take a three-to-five year break to care for the child before pre-school or kindergarten. The median-priced home in San Antonio, Texas is $205,000.

Let's say two of you make a combined $300,000 a year and live in San Francisco. Both of you are 35 years old and really want to have a baby within a couple years.

Having a $1,500,000 net worth (5X household income) may sound excessive. But maybe not given the median-priced 3/2 home with a backyard costs $2 million. Then there's $24,000 a year for preschool to consider.

Amazingly, the average American household is now a millionaire with a net worth of $1.06 million according to the latest Federal Reserve Consumer Finance Report. Meanwhile, the median American is 39 years old. So shooting for a million dollar net worth before having kids isn't that absurd.

Net Worth Goal For Single Parent Example

If you're a single parent making $250,000 a year and live in Manhattan, having a $500,000 – $750,000 net worth might be necessary because you will need to hire a lot of help. It's either hire help or ask your parents for free support. The median-priced condo in Manhattan is $1,300,000.

Want more than one child? Then continue to follow the gross income multiples in the chart. If you don't want to follow my net worth goal before having kids, then consider moving to the heartland of America. The cost of living is so much more affordable.

Geoarbitrage is a great way to make your dollar last longer. Thanks to the rise of the work from home trend, geoarbitrage is more possible than ever.

Financial Stability Is Key When Deciding To Have Children

Having a child helps crystallize the value of homeownership even more. When you have a child in school, you don't want to be at the mercy of a mercurial landlord. Imagine how traumatic it might be for your child to be removed from a safe and familiar environment.

Having money and a house is all about stability. The more stable your environment, the less likelihood for conflict and divorce. Money will always be one of the top stressors in a relationship. But an overall lack of stability will inevitably torpedo even the strongest bond.

You most certainly can rent and have a lower net worth before having children as many people do. I'm just trying to provide a financial guideline to help give couples who want children have better chance to survive the chaos.

Providing for a family and being a present parent is already hard enough. Let's not add excessive money worries into the equation.

Coming up with a net worth goal before having children can be fun and extremely motivating to build wealth. Before having children, at least talk about your financial plans with your partner. Your children desire financially responsible parents.

Related posts about having children:

The Average Net Worth For The Above Average Married Couple

When To Have More Children Based On Logic And Heart

The Cost Of Having Many Children Isn't Just The Money

How To Get Into A Great Preschool Or Private Grade School

Recommendation To Build Wealth

Sign up for Empower, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better net worth tracking, run your investments through their award-winning Investment Checkup tool. It will show you exactly how much you are paying in fees.

After you link all your accounts, use their Retirement Planning calculator. By pulling in your real spending and saving habits, you get a great estimation of your financial future. I’ve been using Personal Capital since 2012 and have seen my net worth skyrocket during this time. Stay on top of your finances!

Get Life Insurance If You Have Children

If you have debt and/or dependents, it's important to get life insurance to protect your loved ones. I recommend getting free quotes with PolicyGenius, the #1 life insurance marketplace today. 

With PolicyGenius, I was able to double my life insurance coverage to $1 million and pay less. For the longest time, Sam and I had mismatch life insurance coverage, which made no sense. PolicyGenius provides you real quotes all in one place so you can get the best price possible. 

If you plan to have children, getting life insurance is a must. The best age to get life insurance is around age 30. And the best type of life insurance to get is a 30-year term policy at age 30. Trust me, life will get a lot more complicated after 30 with children. You want to lock in a low-cost policy and protect your family!

For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. Everything is written based off firsthand experience. 

About The Author

74 thoughts on “Have A Net Worth Goal Before Having Children: How About $1 Million”

  1. One thing that I personally am considering when it comes to having children is how satisfied I would feel if I put all of my time, energy and money into having a kid that turned out to be a less than stellar adult, if I were anything less than financially independent in my older age. Meaning, if I were financially independent or at least close to it by the time I have a child (with a very high level of certainty that I ultimately would be, if not), then I would be much more okay with having less than stellar adult children because I would feel like I at least accomplished something in life; not that money in and of itself is an accomplishment, but it is likely a result of being successful at something along the way or over the course of your life.

  2. We can’t even save $1k annually because of school debts, car debts ($12k modest used car), both working full time, guess having children’s not in the cards. Not everyone’s VP’s working in finance, buddy. I wonder what % of the population (in the USA mind you, not mentioning other countries where it’s much more difficult) earns enough to even save anything after just the cost of living and taxes. If everyone only had children based off of this, the population growth would be much less, which might be a good thing.

  3. When you factor in your NW requirement, do you factor in things like equity in your home and equity in your business, or is it just straight savings?

  4. We did not have any net worth goals before we decided to have our beautiful daughter… luckily, I was able to get pregnant & deliver at 39 without having to resort to expensive infertility treatments / procedures! Whoo! To be honest, feeling financial stable or having a steady cashflow was always a concern. My husband and I don’t have family here so daycare would have been another concern once we had her! 2x-3x our income would have been a good plan.

    Living in Honolulu, my personal goal for the family was to buy a home/condo. We were renters for many years in affordable housing, but I always dreamed we’d get a piece of the pie ‘cause it’s so worth it to own real estate in the islands if you find property that works! (And we live not far from downtown)

    Glad we bought a home, but steady cashflow keeps the peace at home. Our first year was rough as new parents and me having to stop work….being self-employed is having to plan way more for life changes if you bring in some of the $$.

    My husband and I really have to work as a team financially and emotionally so this works. I’ve seen people with lots of net worth get into trouble for other reasons… but that’s another topic altogether. We have a friend who was stressing out big-time over his pre-nup before he got married… so not enough or too much is all relative. We are just so glad we had our daughter, even though we weren’t the best planners. And life has settled down a bit so we can focus on becoming FIRE.

  5. The $250 number you reference is for the first child. The cost of raising children decreases with each child. There are several articles on that topic. I’d love to hear your thoughts on this. We’ve found the cost of childcare basically stays constant once you reach 3 kids. So now at 4 kids, I’m not “losing” any more of my income.

    Reading how much you enjoy spending time with your son is fantastic.

    1. Makes sense that there are cost synergies with multiple children, but you would know more than me since I only have one kid. There’s a lot of variability with how much you can and want to spend on kids. The sky’s the limit really!

      Glad the cost of childcare has stabilized for you!

  6. I’d like to point out that from the female perspective, it actually makes more sense to have children earlier, rather than trying to hit a net worth goal first. This is primarily for two reasons:
    1. Having babies later and potentially needing fertility help can end up costing a lot in terms of time/money/mental health.
    2. Stepping back from your career in your late 20’s/early 30’s may have less of an impact on your earning potential than stepping back in your 40’s.
    I believe the ideal timing is to work for 10 years first (save up, acquire skills that people will pay you to use from home or part time), have babies relatively early (stepping back if necessary or desired), then get back into it before 40. Not coincidentally, I had my first child at 29, second at 30, and third at 32. So I didn’t quite hit 10 years working before kids, but we did hit $1M net worth by 35 because of the money I had saved up early on. Like the poster above, I’m also an engineer and was hooked on saving because of a Calculus professor who made me learn about compound interest when I was 16.

  7. I found this to be a provocative post! I had my older daughter when I was about to turn 34. At the time, my wife and I had purchased an apartment and were both doing a good job funding our retirement accounts and paying down our student loans.

    But we were focused on cash flow and not really thinking about net worth (a mistake, in retrospect – what gets measured gets improved). But becoming parents was what really spurred us to take action with our finances; by the time we had our second daughter, I was 37, and our net worth was at 3x our gross income.

  8. Having kids should be based on a few intangibles:

    * You’re in a loving, stable relationship.
    * You have a decent income stream (decent being relative to where you live and what your
    expenses are). Or are committed to obtaining a decent income stream.
    * You want to have children.

    Part deux (ideal but not required for success to start a family. Required for success later)
    * You have eliminated credit card debt and have some money saved in an emergency fund.

    Establishing goals for net worth, salary, etc. are irrelevant. You can attain these along the way adhering to a disciplined plan with your partner.

    A rigid set of goals to attain prior to having a small human misses the point, which is living your life. As the immortal Bruce Lee said in Enter the Dragon (1973 Warner Bros co-starring John Saxson and Jim Kelly, directed by Robert Clouse):

    **scene is Lee providing a kung fu lesson to a student. Student is not comprehending Lee’s instruction on kicking**

    “Don’t think! feeeel! It’s like a finger pointing away to the moon. Don’t concentrate on the finger or you’ll miss all that heavenly glory!”

    Translation – don’t focus on the small things or you miss out on life. If you’re in love and want kids, have them. Chances are they will inspire you to achieve more.

    1. These are all good goals that everybody will agree on. But they are also all fluffy goes with no concrete ways to measure. If you know how, let me know! As this is a personal finance site, Logically using money as a measurement.

      1. Im not sure I’d qualify the goals as fluffy. Its the principle as opposed to the number that matters. If a person establishes a budget, spends less than what they earn, carries no consumer credit, and has a job that provides an income, I’d speculate they are stable enough to have a child. I cannot put a figure into the equation. They have demonstrated money skills and behavior that can support a family. It may not be easy for years, but it should not deter people who want a family simply because they have not attained (x) amount of wealth or assets.

        If they maintain that money behavior over time they will do well. Defining what doing well means is a moving target depending on the person. For me would it be an emergency fund, no car loans, funding tax advantaged accounts at 15% or more, paying off your mortgage early, funding 529 plans, and doing so for the long term (20 – 30 years).

        If someone is debating kids but they spend every dollar they make, have $45,000 in credit card debt, or owe $35,000 on a car, and are prone to gambling or drug use, hopefully they stop there. Get your house in order prior to embarking on parenthood.

        There are no monetary figures you can come up with or algorithms you can develop indicating you are now ready to have kids. Develop disciplined behavior with money and you are ready for the long haul. That is my point distilled down.

        Be well,


  9. There is a reason to have children earlier — it is easier when you are younger. It took us 3.5 years to get our beautiful baby boy with experiences we could write a book about. We started seriously trying when my wife was 35. At that point we felt financially secure and mature enough to raise another human being. However, given what we went through, we would have tried earlier would we be able to have another go.

    Not too many people realize how common infertility problems are. Three quarters of our closer friends have had at least some level of problems. All tried (and fortunately finally did) have a baby starting at ages 32 to 36.

    The point is that there is a great downside on getting kids later. You take a gamble between financial security and your ability to get a baby in the first place.

    1. I agree. Which is why I feel the ideal age is 32 to have a baby. If the ideal age is 32, then you need to be trying at around 30 years old As it takes on average eight months to succeed if you have no infertility issues, and often years if you do.

  10. >Given I believe the ideal age to have children based on biological and economic reasons is in your early 30s

    If you’re a male, maybe… female fertility declines dramatically after 30.

    The reality of having kids is that it’s never “the right time”, but at least for females it’s almost always going to be better to have them sooner rather than later. This obsession with chasing your career and chasing money and having a million dollars before you have child, which is arguably the most important thing you’ll ever do in your life… I dunno, it’s just sad.

    Sure, don’t have children if you can even afford to live on your own. But waiting until you’ve accrued some semi-arbitrary amount of wealth, especially something absurd like a million dollars, good God… you’ll be waiting forever for that.

  11. Interesting take on how much to have before kids. I think it depends a lot on where you live. Some places you may need a $1 million. But in many places where the cost of living is low, you don’t need much at all. Or if you live in a country where there are lots of social programs and parental support, you’re probably won’t need a $1 million.

    I also think that kids are expensive if you agree to pay for their BMW and tuition, but I don’t believe that’s good for the kid. Why would you bother working hard if the bank of mom and dad are just going to pay for everything? That just distorts the value of money. If I end up having kids, I’d definitely want them to have skin in the game. If they want a car, they’ll have to work and pay for at least 50% of it. Ditto with tuition. I don’t think I would’ve worked as hard or become as employable if my parents had just paid for my tuition.

    As for “Imagine how traumatic it might be for your child to be removed from a safe and familiar environment.” Again, it depends on your personality as a parent and your kid. I’ve met many World Schooling families on our travels who believe familiarity is overrated and exposing their kids to different cultures and languages is a good thing. They believe in teaching their kids to solve problems and challenges early on in life, and having to adapt to their changing environment is a big part of that. As a result, some of these kids are the most precocious people I’ve ever met. They start their own online business, coach other kids, speak multiple different languages, etc, etc. I love these out-of-the-box thinking type of people.

    So though it would be nice to save $1 million before having kids, that’s largely dependent on where the reader lives and what type of parent they plan to become.

    1. I love the idea of slow traveling with kids and living in a particular country for 1 to 4 years at a time. I’ll publish a post about this in the future.

      The disruption is more about having to move In the middle of the school year, or having to move to a different neighborhood and a different school because of finances or what not Unexpectedly. I grew up living abroad and moving every 2 to 4 years. It was tough to move, but it was easier because I expected to move.

  12. Great perspective Sam. Here was my favorite line: “Given your kid will be one of the people you love most in your life, you will naturally wish you had him or her for a greater percentage of your life.” The same goes for grandchildren, I expect.

    On the whole, I don’t resonate with the idea of waiting for a certain net worth before having kids. I think it can cause people to wait until too late — when you might miss your opportunity to have them at all. My wife and I had our first child at age 27 (before finishing graduate school), following by subsequent kids at ages 30, 32, and 35. It hasn’t been until recently that we’ve felt financially secure. But we’ve always had enough and we’ve made it work. The kids don’t have a good sense of whether we’re rich or poor, I don’t think.

    If you’re a career oriented person, like most readers of this blog, there’s no perfect time to have kids. I’d advocate for having them when you can, with a person that you love, while you’re still young and able, and then you’ll make life work around it.

    In other words: family first, finances second. Too backwards? :)

    1. It’s really great you had the belief and not so much worried to be able to provide. I don’t know, I saw so much suffering growing up overseas with so many family struggling to provide for their kids that may have permanently scarred me into wanting to be a stable provider.

      I’m very cautious when it comes to big life changes because so much is at stake.

      1. Interesting! I don’t think my wife and I ever seriously contemplated the scenario of not being able to provide for our kids. I always just figured that worse case I’d have a job that would pay for them, and/or they would be fine if we raised them with lower financial means. Maybe that was naive, I’m not sure. I would probably have a different view if I spent time in Malaysia like you did as a kid.

        We probably wouldn’t have had a 3rd or 4th kid if we weren’t succeeding financially. So the ability to provide does play a factor.

        Here’s a question to contemplate: if you never got your job in finance and never got to $1M net worth (impossible for the financial samurai, I know!), but imagine that’s true: would you recommend against having kids at all? For me, no way Jose! I’ve always wanted kids, even if my financial outcome were worse.

        Great article, in any case. FS Jr is in good hands and has a bright future.

        1. Now that I have a kid, I do believe children are one of the greatest joys in life. But I don’t know if I would feel secure enough to have one if I didn’t meet my net worth goal.

          I just witnessed too much suffering by kids when I traveled for work and lived overseas to create one of my own. I think I would’ve been more inclined to adopt, which I have thought about since I was in high school. From my perspective, even though I didn’t have the financial means, at least I could provide love.

          I’ll stick to the 2 to 3 times annual gross income as a net worth target in this post before folks should have kids. Some parents manage better than others, but I think for the sake of the kids, having this minimum financial foundation is important.

  13. I don’t necessarily think you need a million net worth. You could have a million net worth (be house poor) and have poor cash flow. I think a million nest egg is reasonable. I do agree working at least 10 years out is good before having kids. I am about 70% towards 7 figures (just me not including husbands net worth) and I feel like I would have liked more before having kids but my biological clock was ticking!

  14. We all know that having kids is expensive. I think that instead of focusing on how much one needs to save before having a kid, most people should instead come up with a plan on how much they need to save after their kids are grown. That give you a 20 to 30 year long term goal that can be tweaked every year and is more likely to be achieved than a goal in your late teens or early twenties when many people are still forming their brain and may become a parent before they expected to do so.

  15. I’ve been sooooo nervous writing a post about this. Our goal was $1 million before breeding. Before it was $1 mil including house and now it’s just $1 mil liquid because the markets flying high. But it’s a lot more important to have stability and time for children so we’re just waiting until FIRE. Then move back to Bay Area with our family so we can give our kids grandparents :)

    Good grandparents are worth another million to me :)

  16. Hospitalist

    Very interesting, I never thought about a certain networth before having my kid, but looking back, we did achieve seven figure before she was born, actually 4 years before she was born to be exact.

  17. Just another example of how becoming a doctor pushes back life even further.

    I actually had my daughter (only child) when I was 34 yrs old (my dad who was also a doctor had me (only child) at age 36).

    Even waiting that late, I had a negative net worth because of student loan debt etc.

    But fortunately the subsequent years of making a much larger salary make up for the early delay so having her when I did wasn’t too big a hit to my future net worth

    1. I would think being a doctor allows you to be more OK to have kids earlier given the certainty and stability of the doctor’s pay. Not to mention the ability to take care of a sick child with your medical no harm.

      1. There are definitely docs who had kids during residency or even medical school. So I may be at one end of the spectrum. Residency especially is tough because of the long hours, calls, and low pay (awful combination). Having a family would be incredibly challenging but of course it can be done. I chose to wait till I finished residency before even thinking about family (and that meant I was going to be 32 yrs or older before starting a family).

  18. Hey Sam-

    I’m 28 and have these goals:

    Want to have a kid by 35 with:

    NW: 2.25m (750K home equity, 750 in non retirement investments and about 750K in retirement). This, by 35, although is way ahead of most people is something I just look at as a starting foundation. Other key would be to have about 400K of income/year (both working).

    I’m on track, but if there is a recession and it lasts awhile, I could end up way below this.

  19. Paper Tiger

    I don’t think the quantitative measure of 1M NW is as relevant as the qualitative measures that need to be in place:

    1. A stable relationship between 2 loving and committed future parents.
    2. A real partnership where shared responsibility and teamwork provide a solid foundation.
    3. A maturity level of both parties and real recognition and understanding that the changes a child brings to the relationship, and expectations that go with that, are fairly well understood and accepted.
    4. An understanding that you don’t know what you don’t know and joy and frustration play equal players in the drama that is about to unfold called parenting.
    5. An honest assessment of the financial implications and what tradeoffs may need to be made. I think more important than 1M NW is cash flow and future projections around one income vs two. What can you afford? Could you withstand the hit of someone losing their job if you both worked, or what if you both lost your jobs? Enough emergency funds in place to carry you until you find other employment? A well thought out budget you can stick to under a variety of scenarios, etc.
    6. A reasonable agreement on how you plan to raise your child and what each of you brings to that equation. Who will be the disciplinarian and do you agree on whatever approach that may take?
    7. Do you agree on how you want to educate your child, (public, private, charter) and will you be prepared financially to address the answer? What about college and who pays for that?
    8. If you happen to be religious do you agree on how your child will be raised with that in mind?

    There are lots of other questions to ask but this is the depth I would go to rather than simply saying once I hit 1M in NW I’m ready to rock and roll with a family.

    1. You hit the nail on the head with no. 5. You might not need a million dollars (but why not), but you do need a financial plan for how you are going to raise the kid(s) and how you are going to get to your goal if it’s a million dollars or more. You will eventually get there whether you have kids or not if you have a plan. Money makes money and houses appreciate and can bring in income as well. A good demonstration of the effect of compounding is a revelation and a big incentive.

  20. All I have to say is that for me — personally — remaining childless would have been the biggest calamity of my life. Worse than working for the man until old age, worse than financial ruin, homelessness or disease.

    The best approach for me, in retrospect, would have been: Live a spartan life in an expensive area, preferably taking financial advantage of the hipster hype and housing cost inflation due to the housing scarcity precipitated by an enviro-nimby hipster majority. Then, as you reach FI, retire, or semi-retire in the heartland.

    BTW, you don’t really need to move to the heartland. You just need to move away from cities where enviro-nimbys have engineered a grand master plan of housing shortage (at least housing that people actually want to live in, not poster decorated postage stamp sized apartments by the railroad tracks made for sardines) and the inevitable housing inflation it precipitates.

    That is essentially what I did, though with some regrettable delay. I should have done it sooner.

  21. I see those large estimates of the cost of raising kids but I honestly do not think we spent even $100,000 total raising all three of our kids from birth to college graduation. Some extra food and clothes, not much else. Hand me down old cars. They all earned their free rides at college through scholarships, zero debt, no cost to me either. Company insurance covered medical. They had jobs to earn their own spending money. Kids cost us almost nothing, and they were great fun, I recommend having at least three!

  22. My initial reaction was to push back on you for this post. My thinking is that kids don’t care about money, they just need love and support. However, if more parents planned and sacrificed before having children for the sake of their future children I agree that their chances of divorce would decrease. Less divorce translates into happier kids.

    Giving this some thought I totally agree with the premise of this post!!

    Thanks, Bill

  23. My only goal before having children was to have reliable income. I didn’t want to have children unless I could provide them with everything they needed. Due to growing up in a low income family, I knew they wouldn’t need much to be happy and educated. I never went hungry, always had shelter, spent a lot of time outside with friends and did very well at a decent public school. It doesn’t take much money to raise happy children – definitely not $250,000 for a healthy kid. Once factoring in tax benefits, very little childcare and military health insurance, I estimate that my children have added maybe $2000/yr each to our expenses up to age 18. That would be $36,000 each and that number is probably high (I’m even considering extra rooms in my house, utilities, etc…). I feel like the large numbers used in many articles are there for shock value and possibly to dissuade lower income people from having children.

    1. When you say little childcare expense, is that because you are a stay at home dad? Or do you have a partner who stays at home? And if so do you not count the lost wage as a cost?

      I would love to see an annual budget breakdown of $2000 a year. I think that would help many readers see how much they are spending and how much more frugal they can be.

      Just any type of lesson, whether it’s music or sports or swimming, is around $20 an hour nowadays. Let’s forget about food, clothing, school items, diapers, toys, etc.

      1. I thought you might ask some questions Sam. I did miss forgone income, but we did a couple things to counter that. For a few years my wife ran an in-home daycare. At other times she worked evenings and weekends, but I would say we probably lost out on at least $5000/yr. We determined early on that her working for minimum wage or just above would barely pay for 2 kids in full-time daycare. The following took a while and I’ve probably missed something. Please ask questions.

        The tax benefits for each child up to age 17
        $1000 credit
        $600 for exemption (about $4000 at 15% tax)
        States (various over the years)
        $100 ($2000 exemption at 4-6%)

        Total Tax Benefits have been about $1700/yr

        Expenses/Yr (there are 4 of us but the expenses definitely aren’t 25% of the total since there are base costs)
        $1500 Food (hard to know for sure but we consistently spend under $600/mo for family of 4 including toiletries and cleaning supplies)
        $630 Utilities (15% of electricity, water)
        $50 Cell Phone ($40/mo, 24 months averaged over 18 years, they only got them when they turned 16)
        $350 Clothing (we just don’t spend much, some items passed down)
        $500 Gifts (usually $100 for birthdays and $400 for Christmas – less when they were little)
        $100 Furniture, computer ($600 for furniture, $1200 for computer)
        $83 diapers for 2 years @ about .20/diaper, 10/day is about $1500 averaged out over 18 years
        $100 Clubs/sports (this will be higher for most, we tried Cub Scouts for a couple years, swim team, music lessons, instruments, drama club, but nothing stuck)
        $100 School supplies
        $400 Additional house size (interest on additional $20,000 mortgage, 15 yr, 4.5% over 18 years)

        Unnecessary Expenses (we have spent this, so we’re not that frugal)
        $500 Entertainment/vacation (movie tickets, theme parks)
        $200 Eating out
        $185 Pool (Purchased and maintained above-ground pool averaged over 3 kids for 18 years)

        So, while we have spent about $4700/year on each of our kids, the cost after forgone income and tax benefits is about $8000/yr and if you remove what I consider unnecessary expenses it’s down to just over $7100/yr. If I hadn’t missed forgone income it would be down to $2100. Due to my military service, medical, vision and dental costs were negligible, so I’m not qualified to estimate how much this would cost for the average family. I’m sure it’s expensive, but keep in mind it is only the difference between coverage for a couple and adding a child and any copays/medication for that child.

  24. My husband was only a 27year old medical resident and I was a low paid attorney when we had our first child. Our net worth was probably zero. But we knew the future was bright so we struggled a few years until he became a full time doctor. Then bought a house and began banking money. Had 2 more boys but by then the rough financial years were behind us. By 35 and 36 we had our completed family and savings. Glad we didn’t wait- it’s tough being an older parent. The first child payed the price a bit as we rented apartments and he never had a yard. All water under the bridge.

  25. Pretty much spot on in my experience. We were at 4x, and the large expense increases due to buying a house around the same time and daycare would have stressed me out much more if the buffer from my early career wasn’t there.

  26. This is a great post! My parents were not prepared financially to have my brother or I. The lack of money caused a lot of stress growing up. I don’t think it was the only stress item. My parents’ relationship was and continuous to be tumultuous. Money is a big item. Whether they have enough, who earns it. It’s awful.

    Lesson learned – we try to be as financially responsible as possible. I have a great fear of being stressed out about lack of money.

    As a woman, I, also, will not be financially dependent on my spouse. Having earning power gives me comfort and confidence. Knowing that I can make it on my own if my husband and I divorce or he dies is very important.

    I would not have kids unless we were financially set. But I’m positive this is due to the childhood memories.

    1. I was married very young and divorced before we had kids. But I too always said I would not have kids that I could not support on my own. I also said no kids before age 30 but we were under pressure from his family to have them right away. Also, we planned to have a house first, a year of travelling first, a motel businesss, and medical school for me before kids. We did the first two by age 25, and I started medical school, but never got to the motel before divorcing. My husband eagerly agreed to all these goals, but then (with pressure from his parents) argued and fought me all the way the minute it got hard or he was not the centre of attention. Finally, he wanted a divorce, which was terrible at the time, but saved me from an unhappy situation. I have been single ever since, very successful and happy, never had kids. Mixed feelings about that, would have liked them when I was younger, but seeing how my friends are dragged down by one or more of their adult kids who never seem to be able to handle their own lives without help, support, money, moving back in or never moving out, baby sitting, drug addiction, legal help, and very little in return, I am quite happy the way I am.

  27. I didn’t have a networth goal before kids. I did want to be financially stable before going there, which we were. Ie good jobs, emergency funds, low debt, and positive net worth that’s more then peanuts. Not sure where I’d draw that line but 1m is too high and 2-3x may also be.

  28. “Given your kid will be one of the people you love most in your life, you will naturally wish you had him or her for a greater percentage of your life.”

    Glad Jason (the other Winning Jason) called out that quote as well. My wife and I are 34/29 and have largely frugal’ed are way solidly into the double comma club. We’ve certainly positioned ourselves to move to a single family income upon deciding to have children, but we’re also loving all the traveling/hiking we’re doing and know how that will change upon having children. This has delayed pulling the children proverbial trigger so far as we cross off our bucket list travel spots!

  29. I decided to have a kid my first year of business school. Current net worth, ($42,000)

    Wouldn’t change it for the world.

      1. I still have one more year to go (currently at my internship). My wife stayed home to take care of the baby. My wife worked in O&G, which is non-existent where we are. Once I start full time next year she plans on going back to work as there are better options for her to get a job that can actually offset the price of daycare.

        1. Glad it’s working out. Two parents not working and one paying B-school tuition has to be tough on the finances.

          You have more guts than me. I went to b-school part-time bc I couldn’t bear to give up the money.

          GL with the new job!

  30. Simple Money Man

    I didn’t have a net worth goal before having a kid. I DID have a goal of completing my CPA though, which I did before we had our first kid. My wife was cool with it and allowed me to study my behind off because she knew the longer I took the longer we had to wait to have kids. :-)

    Your idea is sound though, although I’m not sure about the $1M amount. It also depends on the area you live in and your lifestyle. I think the more important thing to focus on is job/career stability and potential for growth. We always have the potential to earn more, but when time is gone, it’s gone FOREVER.

  31. My goal is to hit $1 million before I get married. I have go from $500,000 to $1 million in the next 3 years to make it. If I don’t make by then, I will shortly after.

  32. I didn’t have a specific net worth goal before starting a family. But I did have net worth goals I wanted to hit by age starting from age 30. Prior to that I was doing a good job of saving and investing from my mid to late 20s but I hadn’t really calculated my net worth or thought about it too much.

    I definitely think there are benefits to setting financial goals before having kids. My parents didn’t and they constantly fought about money until they eventually divorced. So I do agree that not having your finances together can cause a ton of stress once a child is brought into the family and that can totally lead to divorce. Hopefully more and more young couples will talk about their finances and prepare financially before having kids.

  33. Charleston.C

    I’ve never considered networth when considering a child, more concern about cash flow than anything else. So in a way if someone is living off passing income from NW, maybe it makes sense.

    Personally for me, the goal was 1) own real estate 2) earn enough as a single source of income to be above average household income

    As long as income being generated can cover expenses, can continue to mix out 401K, can continue to have a surplus that builds up a rainy day fund, that passes my own financial bar to have a kid.

  34. “Given your kid will be one of the people you love most in your life, you will naturally wish you had him or her for a greater percentage of your life.”

    That’s a beautiful thought. One I had never considered before but it makes so much sense.

    I never had a specific net worth goal before having children. I’m not sure one is necessary. I wanted to be financially established though but we were easily there by 25 and not even married yet.

  35. Damn Millennial

    I think a million is an awesome goal before having kids. A benchmark was never set in my head it has always been just focus on accumulating as much as possible in my 20’s.

    Understanding the power that these dollars have has kept me motivated to keep putting it away. We should be on track to meet your goal(s) though and I think it will help launch us into happier parenting.

    If everything goes to you know what in the next 4 years I would just stay in the very affordable home we have now. If we keep surprising ourselves with earning power we will move to our dream neighborhood and buy something under the median priced home for the area.

    I don’t think it is necessary to have a million (obviously) but I think if you are motivated and have the earning power it can set you up nicely.

  36. Do you regret having a child a bit late? It’s going to be more difficult to have more kids now that you’re both older, right?

    We had our son when I was 38. I wanted to have a kid earlier, but it wasn’t a priority. Mrs. RB40 didn’t want a kid at all. That’s why we put it off for so long. I had to convince her to have a kid. Anyway, it worked out pretty well. We compromised on one kid and now I could spend a lot of time with him. It wouldn’t have been possible if we had him when I was younger.

    Anyway, I don’t think you need a million bucks to have a kid. Being financially stable is more than good enough. Plenty of people have kids without considering the financial implication.

    1. Now that I’m a father, I think how crazy it would be not to have had my son. I wish I hadn’t focused so hard on my career so I could have had him sooner – ideally three years earlier. Given your kid will be one of the people you love most in your life, you will naturally wish you had him or her for a greater percentage of your life.

      Yes, I wish I had him at 36 instead of 39. But better late than never. I just have to live 3 years longer on the back end.

      1. I think 36 would have been perfect too. My wife really didn’t want one and it took a lot of convincing. Now, she’s so happy to have a son. It’s really life-changing.

  37. I am a happily married woman with eight children ages 10 – 21. While my current net worth is over 7 figures it was only 5 or 6 figures for most of my child-bearing years. You don’t need a high net worth to successfully raise a family and keep a healthy marriage. In my experience, it’s more important for you and your spouse to have a similar attitude toward responsible financial living (i.e. living below your means and saving/investing the rest).

    If you both consistently live below your means, don’t fall into the consumer trap, and teach your children to do likewise, you can live with very little stress about money (even if you don’t have much money).

    I personally love the FIRE concept, but fear that some people may be doing a great disservice to their total life-long happiness by delaying children based on net worth.

    The FIRE community talks so much about the joy that financial freedom brings, but children can bring the ultimate joy. And while I’m not yet a grandparent – everyone tells me that it brings even greater joy. Why would you want to delay that for a decade or more because of net worth?

    My background – I left an engineering career at 24 to become a stay-at-home mom. My husband continued working full-time. We lived frugally, had a very high savings rate, and enjoyed ourselves tremendously. After our last child was born, we started a business, involved the entire family in running it, and ten years later have built that business into something that will fund our early retirement while also being a legacy to pass on to the children.

    I can’t imagine the joy I would have missed out on had I stayed in Engineering and delayed having a family simply to build net worth. I really just want people to know that children make life better. They don’t have to cost anywhere near the numbers you reference. I’ve raised 8 of them on less than $25,000 annually (and many years less than $20,000) while saving/investing the rest of our income. Half of those years were east coast and half were midwest.

    If you want to delay having children till you achieve a designated net worth, that’s completely your choice. But please, please know that children do not have to prevent you from achieving FIRE.

    1. 8 is a very impressive number. If you could share your budget, that would be great. Looking to get some money saving tips from those more experienced!

      What do your kids say about growing up in a big household? Also, how big of a house did you guys have to buy?

    2. Steve Adams


      Congrats on the eight kiddos – didn’t quite work for us to have that many but so glad we started having kids at 25. Far more energy to chase them around during the 20’s and 30’s. Plus, hopefully we will have grand kids in our 50’s instead of 70’s.

    3. I want you to know how meaningful this comment is to me. I work in the aviation field, and have 4 children. My husband works in the same field. Our kids are 7, 5, 3.5, and 10 months (I’m 37). I recently changed up my job/contract, and now have a lot of flexibility and more free time, but am still bringing in a good salary. I’m working on a new business plan, too. We are on track to “retire” early – though I’m not sure we will retire, maybe just switch to something else. Sometimes, listening to people in the FIRE community talk about net worth, and delaying marriage/kids until they’ve hit a number makes me feel like an odd-ball. And believe me, I already feel like an odd-ball, working with 4 little kids! Ha!

  38. I had a net worth of about $6,000 and an income of $300 a week on a good week when I took on the role of being a step dad at 18. Today my kids are 15, 9, 6, and 5 and our total net worth is right around 1/3 of a million. The youngest will be grown when I am 45. Looking back, ideally I think owning a home, having a 6 month emergency fund and a retirement account of at least $100K would be ideal before having kids, which in total would equate to a net worth of roughly $150K, which would equate to somewhere in the 2-3X annual income goal.

    If everyone waited until they were millionaires to have kids then I think our species would end up going extinct.

    1. Tight! But glad it worked out for you guys. So blessed!

      Hope readers don’t just read the title and come to the conclusion that everybody needs to have $1 million before having kids. So much meat in this article to digest.

  39. I am a pf blogging flunky in that I don’t really calculate our net worth (I know the ballpark!). There are better times than others to have a baby, but I don’t think the vast majority of us will ever feel totally financially ready. We both felt good that we had steady jobs that we liked and live in a nice neighborhood. I’m so glad we had savings, too, because my mat leave took $18K out of my salary this past year. UGH.

  40. We didn’t have any Net Worth goals before having kids, but did wait to start trying until we were financially secure/stable – hindsight, we should have started earlier because we would have been fine financially.

    We are on our way to number 2 and have enough stashed away to handle any financial curveballs

  41. A mil is not going to amount to much after we get thru this crisis.

    But I’m also a sad and really paranoid man.

    1. Crixus – what crisis are you referring to? Record low unemployment, strong GDP growth, stock markets near all time highs, the US not making the World Cup or Germany going home early?

      To the topic at hand, with the current system, you can have a kid if you are poor and get government handouts – the amount of freebies and EITC you get from a kid or two is a huge amount OR if you have your finances in order. I think 3-4x your income probably works up to $50k a year in most of the country, but after that, I think even 1-2x is fine. Most of the country there are affordable housing with good public schools to choose from.

      On a separate note, unrelated, – I always have found it funny that a VP is above director in every industry except for banking. Not sure if it’s true, but someone told me that was because some government agency had required VPs to be able approve some fairly simple transactions in the banking world so they made virtually everyone a VP and moved director/mg director above VP.

  42. Accidental FIRE

    I don’t have kids so I can’t comment from an experience perspective here. But I imagine you’re going to get some pushback on this one from people who had kids with a far lower net worth and are doing fine or still easily reached FI afterward. So the popcorn is in the microwave :)

  43. Great post, in the beginning I thought that’s a tight target but felt better when the the various scenarios were explainedl. In the end peer pressure especially with being a parent is something not to give into, this sums it up nicely “Providing for a family and being a present parent” on what to do.

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