Those of you who have been reading my blog for a while know that Mr. CMF and I have been traveling the alternate and expensive road to parenthood for several years now. We are now pursuing domestic adoption and hope to become parents later this summer. Crazy! We are excited and hopeful that everything will work out ok, but as you can imagine this has us spending lots of time thinking about how much our life will change in so many ways. And naturally the PF blogger in me has been thinking about how this will impact our finances.
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For years now our goal has been to achieve financial independence. We want to have the flexibility to choose how much longer we work. More importantly, we want to be able to choose how we spend our time- we want to be able to spend lots of time with family and friends. We would like to be the masters of our own destiny- and most importantly, the masters of our own time.
If for some reason we never quite achieve true financial independence, we’d at least like the option of being able to choose to work less stressful jobs. Well, I would anyway. I’d like to be able to feel like it doesn’t matter a lot how much money I bring in, and not feel pressured to work the job that pays the best but lacks in many other regards.
For the last several years we’ve had the luxury of being able to throw all of our energy (and some seed money!) into our goal of financial independence. We have two rental properties currently (although we’re trying to sell one at the moment), and we are planning that when we move out of the home that we are currently living in it will become another rental property. We own dividend-paying stocks and we have some other investments that bring in monthly income as well.
We’d like to be able to continue doing all of this. But as our plans to become parents come more sharply into focus here, we know that life is going to change dramatically in a matter of months.
Our expenses are going to increase for sure. “Extra” money that is currently being allocated to paying down our student loans (yes, we still have low interest loans from grad school hanging around) may have to go toward other things instead. And college! When do you start saving for that?
If everything with our finances were to stay exactly as is, we would be looking at being out of student loan debt in 2-3 years. But that’s the thing- we know that things aren’t going to stay the same. We’re expecting that becoming parents is going to push back our debt-freedom date at least somewhat, primarily because we won’t have as much “extra” money in the budget to throw at the loans.
And how many other things will change as well? We have no plans to stop contributing heavily to our 401(K)s and Roth IRAs- that is, unless I stop working (then hubby would still contribute but of course I wouldn’t). I still haven’t figured out if I’m going to keep working or not when the time comes. That’s absolutely what my heart wants to do- but unfortunately there are a lot of other factors at play here besides what my heart wants to do. Not that we can’t afford it- we can- but that’s another factor that could affect finances greatly. If I do go back to work we will need daycare a few days a week, which is another expense.
After all, according to this CNN article, the total cost to raise a child from birth to age 18 years in the US is a whopping $241,000! Actually, since I live in the Midwest in an area that is arguably somewhat rural, it may be lower in my area as indicated on the site. But still. Holy cats! How could that not heavily impact finances?
So all of this has me wondering,
Is it harder for parents to achieve financial independence?
I think the answer is undoubtedly yes. But I still don’t think it’s impossible. First of all, I know some other PF bloggers out there who are parents and who are still hot on the trail of financial independence. Is it taking them longer than it would take if they were not parents? I would guess yes, but hey if you are one of them please let me know what you think in the comments.
I think that the fact that parenthood is coming up for us probably means that it’s time to “up our game” in terms of our finances. It’s going to be even more important for us to make savvy financial decisions since our expenses will be higher and we’ll have another person to take care of. But are we going to abandon our awesome dream of financial independence? No way!!
We still have our dream of moving back to the mountains– they have great schools there and I’m sure Mini-CMF would get a solid education there. We still think this dream will be easier if we have some solid streams of passive income going on before we get there. And we still think we can get there- although considering the upcoming chapter in our life, we think it may take us a little longer. But we are ok with that. 🙂
I really want to hear what you think, especially you parents out there! Is it considerably harder to achieve financial independence if you are a parent?
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Photo credit: Danny Barron