When’s The Best Time to Have a Baby, Financially Speaking?

having a baby
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How do you know when you’re “ready” to have a baby? Can you know?

While there are a ton of emotional, physical and lifestyle factors to consider, breaking down the costs of having a baby might get you closer to an answer.

Financially, waiting until you’re in your 30s, settled into your career and more financially stable seems like an obvious choice. But it’s not always that simple.

Learnvest looked at several important child-related costs, using two hypothetical couples to determine how having a baby at 26 versus 36 would affect their finances.

Child Care Costs

You and your partner will likely spend anywhere between 7% and 16% of your combined income on child care, according to a recent study by Child Care Aware. This sounds like an argument for waiting until you’re older and more financially stable; a higher income will make this cost easier to absorb into your budget.

To forgo child care costs altogether, you might be in a better position later in life for one parent to stay home. You will have had some time to save up a nest egg, and dropping to one income isn’t as devastating when it’s still a good income.

A younger couple, however, will probably be at an advantage when it comes to free child care from family and friends. Grandparents are a source of child care almost as popular as daycares or preschools.

Having a child at a younger age usually means your parents are younger, too. They’ll be more willing and able to accept the challenge of wrangling a kid all day. And your younger friends may be more willing and available to help care for your child before they’re occupied with their own families.

Baby’s Impact on Your Retirement Fund

In your 20s, you’ll probably be on a tighter budget than, say, a decade later. You’re unlikely to have a good start on your retirement fund, and a baby will likely tighten the budget even further.

Waiting until later in life will allow you and your partner to start saving for retirement well before you have a baby.

Even if you never put another dime toward retirement after having a child in your 30s, you could be set for retirement. When you’re able to start early, you’ll have more money set aside and more years to take advantage of compound interest on that money.

When Is the Best Time to Have a Baby?

While child care cost is a draw, saving for retirement definitely leans in favor of waiting.

We generally assume a couple at 36 is going to be further along in their careers, earning more, have paid off significantly more debt, and be more savvy about saving and planning for their financial futures.

But what about tax breaks? And college costs? It’s just not that cut and dried.

So… when will you be ready? To see how your finances can help answer that question, read the full post at Learnvest.

Your Turn: How does your financial situation affect when you plan to have a child?

Dana Sitar is a Staff Writer at The Penny Hoarder. She also writes about writing, work, life and love for blogs and books, and sometimes things people care about, like Huffington Post and that one time she had an article published in The Onion. Follow along on Twitter @danasitar.