Dave Ramsey: Babies are not that expensive

Dear Dave,

My wife and I are debt-free except for our house, and she would like for us to go ahead and start a family. I make good money, but I’d still like to wait a little longer and add some extra to our emergency fund before taking that step. Who do you think is right in this situation?

— Joel

Dear Joel,

Assuming, of course, you’re talking about a reasonable number of children, the old adage is true: If you wait until you think you can afford them, you’ll never have them. You guys have been responsible and are in pretty good financial shape right now. So my thought is have babies if you want babies. Even if your wife told you tomorrow that she’s pregnant, you’d still have nine months to add to your emergency fund.

Your financial situation tells me you’re both responsible people. You’ll be a good provider, and it sound like you’d both make great parents. And the fact is babies are not that expensive. Having kids won’t break your back like lots of people say. You’ve got extra expenses such as diapers and baby stuff the first few years, but it’s not going to drive you to the poorhouse.

Now, if you go to the extreme and have 16 kids, that many baby birds could become quite a financial problem. But for a normal-sized family with a normal-sized income, children do not create a big financial issue.

— Dave

Dear Dave,

I’m finishing my last semester in college, and I’ve already landed my first real job making $33,000 a year. I’m working on a budget, and I have $15,000 in student loans. This is my only debt, and my parents said I could live at home for a year until I get on my feet, so can I put some fun money into my budget?

— Jonathan

Dear Jonathan,

You can, but my advice would be to make it a really small amount until you repay those student loans. The real question is how long you want that debt hanging over your head.

I’m the kind of guy who likes to rip the bandage off. Even if it’s going to hurt a little bit, I’d rather just do it quickly and have it done. With the numbers you gave me, and the fact that you’d be living at home for a while, you’d be able to plow through this student-loan debt in a hurry. After that, you’d be in an awesome financial position.

My advice is to keep living like a college student. Save every penny, and have no life for just a little while longer. Trust me, the feeling will be amazing when you start life on your own with a good job and no debt. That’s the time to have some fun.

— Dave

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