Financial impact of having a second kid

[TBH]

Hi, everybody. Sorry, this is a long one.

I need help thinking about whether we can afford to have a second child. Of course the financial considerations are really a minor part of this decision, but I do want to think through that part of it before I make up my mind.

Our situation:
We are 46 and 32. We have one kid. He is 5, and is starting kindergarden at a public school in September. He has been in part-time childcare since he was 5 weeks old, so this is the first time we'll have no monthly tuition expenses. We are expecting to pay around $1500 per year for summer camp.

Our household income varies a lot because I freelance, but it is currently around 85K per year. We have no debt except for our mortgage. We both work about 4/5 time, and could increase that to full time if necessary. We like to work a little less for quality of life reasons.

We just sold our first home and bought a slightly bigger house. I'm still waiting for the dust to settle before I see how much our monthly costs will be exactly, but I think, including savings and taxes, we need about $6800 per month.

Assets:
House--We just paid 275K for it. Owe 213K, 4.65%, 30 year fixed
Retirement: 92K
College accounts: 35K (high due to grandparent help)
Taxable investments: 4K
Cash: 50K
Car: we have one car that we expect to replace within the next year

The biggest financial impediment to having another kid is childcare. I work multiple jobs, some of them freelance, and could probably get by with half-day care a few days a week. But for an infant, that would still run $500-600 per month in my area. College savings is also a concern. The grandparents have essentially doled out their estates ahead of time, and I'm assuming there won't be any more coming from that quarter. So even though we are in good shape for our son's education, we'd have to expect to foot more of the bill ourselves for a second child. I'm also feeling a bit behind the eight ball on retirement savings because my spouse is only 20 years away from retirement. In addition, we have made the slightly sketchy decision to save less for a while in order to afford the new house. (We were saving around 18-20 percent of our gross, but in the new house it will be down to about 13 percent for the time being.)

Thoughts? Can we swing this? I had been very happy being the mother of one, but lately I keep thinking about having another one.

Thanks for your help.

[wincrasher]

Depends on what you are willing to sacrifice.

There is a benefit to your son to have a sibling. There is also a cost to him for what you will need to give the other child. Does one outweigh the other?

Can you and your husband give your kids what they need, yet still have a comfortable retirement?

Will money be so tight that it will effect your relationship?

What are your prospects for making more money in the future?

Just have a serious conversation and see if you both are on the same page with the answers.
Most people, when they put it on a spreadsheet, will figure they can't afford to have ANY kids. Yet they do it anyway because they figure the trade-offs are worth it.

[MonkeyMama]

I think if you want to afford it, you will work it out. OF course it will set you back financially...

My personal experience is that our second child cost little, early on anyway. I am sure the cost will increase with age (culminating with college expenses). But ours are close in age and both boys, so we didn't really need to buy anything with our second. Our family health insurance is insane in price, but did not increase to add a second child. We don't have daycare expenses either. Though on the flip side, my spouse is out of the workforce longer with a second child. But overall, ours is a very different situation- not sure you still have all the baby gear, etc.

I think overall your finances are fine and you will be fine.

[TBH]

MM, you nailed it. I know that if we decide to do it, we could make it work. It's just a question of how big the sacrifices would be. I'm actually more concerned about other kinds of limited resources--like time and energy--that would be taken away from other things. Of course it would be worth it. But it's a conundrum. At the moment, I'm leaning towards it but not positive I want to do it, and my spouse is leaning against it but not positive he doesn't want to do it. We'll see where we end up.

We did get rid of virtually all our baby gear because we weren't planning to have another kid. Almost all of it was handed down from cousins and friends anyway, and most of it wouldn't have been usable for yet another kid. I'm thinking in particular of a little bouncy seat that we trash-picked and cleaned up. I think this time I'd want to spend a bit of money and get THE baby carrier etc that I want, instead of using someone else's. So I suspect this kid would cost a bit more money than our last one, at least at first.

[cschin4]

Obviously, there is more to life than money. So, if you desire another child and have the means to care for the child, then you should really consider this if that is what you want to do. I think children having siblings is great for your child as well.
A second child is much LESS expensive than the first. You already have all the "stuff". And, I am sure you realize you didn't even need half the stuff you thought you did the first time around. So, with some planning you certainly shouldn't have any problem and another child does not have to be expensive. Also, your 5 yr old will soon be in school so the daycare costs shouldn't amount to much more than you are already paying.

[LivingAlmostLarge]

You can afford it, but whether you choose to do it is a different answer. We're almost the same age and you are so lucky to have a 5 year old! I'm having my first at 30. I think we'll have a few, 3-4 so I'm getting started and hope to be done by 40.

It will be expensive, but I think part of it is lifestyle choice. Like you said you and your spouse are choosing to work 4/5 time. With only $92k in retirement and a spouse that's 46, I'm not sure that's the decision I would make. I might consider working full time to boost the retirement savings even if you don't have a kid.

We're 30 and 32, first kid on the way, and we have more than $100k in retirement savings after a huge loss last year. So that's something else to consider whether you choose to have a kid or not.

I don't know if we'll be able to afford college, but that's not something I worry about. If it happens, it happens. If it doesn't, then they won't suffer.

Besides what I plan on doing is making my college money grade based. ALL kids will have to take out 100% loans, unless they get scholarships. Based on your grades you get it paid for. A and B get 100% paid for. C get 80% and D and F get 0% paid for. Sorry, but college is their job and they should be doing well.

So I can and will pay 100% and I might even let a C slide depending on the class and major of the child. A kid being an english major getting a C in science, okay I'll let a C slide. But a D or F? I've taught enough undergrad classes to know, that if you show up you get a C basically. Sorry not kosher in my book.

[Goldy1]

I just had my first child at 33. I don't regret waiting this long. Sure who wouldn't want to be younger? However, I don't regret all those years of blissful freedom and maturing. It's been quite smooth of a transition for me.

I was saying to my husband the other night that I wouldn't want to have another child unless he got back into a high paying computer/engineering type job again that he lost in 2008.

I realized my comment was rational, but a little insensitive to him. He doesn't think money is themost important thing to having a child. It is important though. I then realized that even if he got another good paying job, who is to say he won't lose it again?

Our house is alost paid off which would help. Honestly, I love being a mom, but the game plan for me was one child. I took myself out of the workforce to raise this child. I may return in less than 1 to 6 years. I have no clue at this point. I look forward to returning one day so I can have it all! lol

Also we can tke turns with my son so we can each have some laone time or even just time to go eat and red the paper! Having 2 would be so much more difficult. I worry it would make us fight.

[amandasfinances]

even one kid is so expensive these days. but i would think that being wiser to whats worth buying and whats not, and also hand me downs would make the second kid much easier to budget for.

[PrincessPerky]

Kids are great and they fit in budgets as needed, but if it is more the 'baby woes' then go borrow a kid for a few hours. You are facing the prospect of sending your 'baby' to kindergarten, so feeling you want a baby is rather natural. Now I could be totally wrong here, you might want to check your own feelings and see if a mini empty nest syndrome is occurring.

On the other hand if you really feel you couldn't be done, then of course you can afford it, you spend more in one month than I make and I have 4.