Ask Paul: Can we afford to have a baby?

Dear Paul,

My husband and I have been married for five years and want to start a family. We owe about $80,000 in HECS (combined), have no consumer debt and are renting.

He earns $80,000 a year, I earn $55,000 and would want to stay home with our baby for at least six months.

We can live very frugally but I still can't escape the fear that we just don't have enough money to have a baby.

Should we hold off until we're in a better situation (though I am over 30)? Or should I just trust that we will make it work? - Rachel

Rachel, I really get where you are coming from. Vicki and I have been married for 42 years.

When Vicki was in her early 30s we really wanted kids, but I was building my business and not getting paid. Vicki was a teacher and our sole source of income.

But the clock was ticking, kids were more important than money and, like you, we could live frugally. We also had many people we respected telling us that there is no good time to have kids.

This made us laugh as we figured it was right. We pretty quickly had two beautiful children.

At times, we did not have a car as we had to sell it when times got tough.

The worst of these was 1991, when our mortgage hit 18.75% and if we had been forced to sell our house we would have lost about 30% of its value.

We bought an oldish car for $3000 so Vicki could take the kids out, to school and so on. We also wanted a dog, but that was impossible due to our finances.

Anyway, time moved on. My business started to do well. We had a third child.

Property values recovered, interest rates fell and we were able to buy a bigger home. We could still only afford one car, but it was a better car.

You mention your husband earns $80,000 a year and you can live frugally. Here I am taking a deep breath, but in your shoes I'd go for the family.

There will never be a perfect time and, yes, you will make it work. Please do let me know how things work out for you, but one thing is for sure: money is very helpful, but family is life.

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