Given that I’m going to be an older mother — turning 31 next month and not married yet let alone pregnant — I’ve done a bit of spreadsheeting around how I can afford to have a child. This puts me a little more at ease given that I can live frugally while earning a reasonably high income, save a lot, and put myself in a much better position to have children.
In my chart I noted how much I plan to save each month and have a column for lower average annual interest rates (5%) and higher ones (10%) from age 31 to 40. The chart otherwise includes the following expectations:
1) I will save $5000 per month between now and the time I have my first child (3/1/2017, give or take)
2) I will take 3 months of unpaid leave after having my first child and save $0 per month over those 3 months.
3) I will return to work full time and continue saving $5000 per month (buying less stuff for myself to offset stuff for baby) until baby #2
4) baby #2 will be born 1/1/2020. At this time I have reduced my monthly savings to $0 per month. I may want to work at this time but I want to plan to allow myself to not work and have enough money in our family to afford this. I want to be able to then afford to live off of my husband’s salary while my savings can grow for our retirement nest egg. We’ll probably have to move to a cheaper state at this point.
Based on these 4 constants and the compound interest variable, the range of my networth at age 40 would be $856,634 to 1,271,596 (*not counting my partner’s savings.) And baby #1 will just be turning age 7 or so, which is when babies become kids and start to get expensive… just in time for me to go back to work.
So this all seems rather do-able as long as I keep my head down and focus on the 58 months of saving $5k a month — so 4.8 years, give or take, or $280,000 of savings over that time period (which is a lot… but seems at least somewhat possible.) Given my potential annual bonus is anywhere from $0k to $40k after tax, I could actually get to that amount much quicker if I do my job well. Let’s just say I obtain a quarter of my annual bonus for those four years — $30k per year — that actually gets me to the
$24.1k $280k goal much quicker.
That said – I’m not accounting for IVF costs which will likely be needed and will likely be very expensive (I should account for $100k for two kids and it might not even work…)
Thus in order for me to comfortably have children, I must focus on my job — really over the next two years — and attempt to obtain at least 50% of my annual bonus.
Inputting my networth growth with 50% bonus (~20k extra per year) by the time I have baby #1 (3/1/2017) I will have reached my goal of $500k network — with $507k networth with the 5% interest and $560k with 10%. Clearly I have my work cut out for me. But I can do this so the rest of my life can provide what I really want — not “no work” — but choice and flexibility.
Here is my Mint.com goals which I’ve adjusted for January 2016 target dates. I will focus on tracking to these numbers hitting the maximum possible bonus possible to achieve my desired results.