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4 tips for balancing debt and starting a family

What we'll cover

  • How to manage debt and start a family at the same time

  • Strategies to pay down debt while family planning

  • Money management tips for adding to your family

The decision to start a family is a big, exciting step to take. And if you owe on student loans, credit cards or any other type of debt, you may wonder if you need to pay it off first. The good news is that you can manage your debt and begin your parenthood journey using these strategies.

1. Prioritize payments

Eliminating all debt can be a daunting task — especially when you have a new addition to the family and need to start planning for all the associated expenses. But you can tackle it by breaking it down into smaller, more manageable goals.

If you have multiple sources of debt, aim to pay off just one before you have children. It could be your biggest debt or the one with the highest interest rate. Or try to pay down the balance to a target amount.

If you have multiple sources of debt, consider paying off just one before you have children.

2. Build a realistic budget

Welcoming a child into your life — however that looks for you — comes with a significant amount of expenses. That's why it's smart to start thinking about how a new family member  will affect your finances as early as possible.

If you don't already have an overall budget, sketch out your financial obligations and priorities. With many different budget styles to choose from, you can pick the approach that works best for you and your situation. When planning a family , be realistic about what you can afford to put toward debt management while saving toward additional expenses.

3. Separate needs from wants

Children come with new costs, but it's important to recognize that not every expense is strictly necessary. Beyond the non-negotiables of food, shelter and clothing, how much you spend can vary widely. For instance, do you really need the expensive high-end stroller or will the standard model do the trick at half the price?

You can save on clothing by asking friends and family for hand-me-downs or shopping at secondhand stores. You'll likely find your loved ones are all too eager to get rid of all the gently used clothing their children have outgrown. The same goes for gear like high chairs, playpens and car seats. Just make sure to have items properly inspected for safety and check for expiration dates.

When you save on spending for your little one, you can put that extra cash toward paying down your debt.

4. Remember your reason why

Paying down debt can be stressful no matter your life circumstances. But when you're adding a new family member, it helps to remember why you're sacrificing. Thinking about your impending bundle of joy gives you motivation to chip away at debt, and that's half the battle. Keep your little one top of mind to give yourself the boost you need to reach your goals.

Balance baby and debt

If you want to start a family, you may think you have to get out of debt first. But the two are not mutually exclusive. You can make a plan to manage debt while saving up for a child. With a little prioritizing and strategy, you can juggle both goals at once.

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