To what degree should finances affect life decisions?

By Stew

coin-flip

Last week, I listed some some of my poorer financial decisions. Unfortunately, the picture that I inserted into the post seemed to give the impression that I viewed having children as a poor financial decision. That was not the intent and I took a little heat for that decision. But the discussion did start me thinking about the relationship between life decisions and money.

Are finances a reason to delay going to college?

Obviously, everyone’s situation is different in regard to college and most kids would be wise to delay going away to school by attending a cheap local college for at least the first two years. There are other ways to reduce college costs: take college level courses in high school, take online courses, enroll in summer school, and more. I’m not sure if completely delaying enrollment in college is all that good of an idea. First, because college costs are always going up and the longer you wait, the longer it costs. Two, because it is much harder to go back to school once you have taken a year off. Third, because under most insurance policies, a dependent must be in school in order to be eligible for medical coverage. Kind of stinks that a person should be forced into college even if they do not want to go, but that is the world we live in.

It is possible to go to school and emerge completely debt free, but if you can get your eight semesters done in four years and emerge with less than $15,000 in school loans . . . you are in pretty good shape (as long as you don’t have credit card debt and a car loan on top of that). So, to answer the question: it depends.

Are finances a reason to wait for marriage?

This one is interesting. I made a joking reference in my last post that marrying my wife was a bad idea because of all her college loans. That was a joke. Her loan amounts were relatively low anyway and if they had been large, that would not deterred me anyway. But should you delay marriage because of the debt that the other person might be carrying?

I think yes.

Not necessarily because of the debt itself, but because of the lifestyle and attitude toward money that it might indicate. Almost all marriage problems are made worse by differing approaches toward spending and saving. It is important to remember that good money compatibility does not necessarily translate into a good marriage. Good marriages are built, they don’t just happen.

Are finances a reason to wait to have children?

It is true that children are expensive over their lifetime, but I trust in the biblical promise that children are a blessing.

So, in other words: no.

Rearing children can be difficult and require planning and hard work, but it is worth it. Furthermore, the more children you have, the greater chance that one of them will be a doctor or lawyer or professional baseball player who can support you in your old age. Seriously, though, I am glad that we had our first child early (17 months after we were married). There is never a perfect time to have children. You can always come up with a reason to delay this big step. I think that a part of the decision to get married is the discussion of whether or not to have children. If you say, “We are ready to get married, but not ready for children” then I suspect that you might not be as ready for marriage as you might think . . .

There is another aspect to this decision that needs to be mentioned and that is that strong finances do not always equal good parenting. In fact, there is a part of me that is quite thankful that I grew up relatively poor. I would love to be able to give my children everything. But at the same time, I know that it might be more important for them to learn that money does not create happiness and how to save and spend wisely. I don’t want our home to be characterized by instant gratification. My children need to learn that all important word: NO and that other important word: WAIT!

If my financial status was “rich” or “comfortable” or even “stable”, I would be much more tempted to get them everything they wanted and not concentrate on teaching them to be content with what they have.

Finances are a big part of any decision, but years ago, when people went to college or got married or had kids, they could solve those problems one day at a time with hard work and frugality. The easy access to credit has made all of these decisions more complicated. There is an added dimension to our lives: debt. Our grandparents never imagined that a person could bring a huge amount of debt in to a marriage or take out a $70,000 loan for college.

So how do finances affect your big decisions?

Picture by Freddy the boy


15 Responses (including trackbacks) to “To what degree should finances affect life decisions?”

  1. DDFD at DivorcedDadFrugalDad.com Says:

    My view is it depends . . . on the situation. Their is good debt and bad debt.

    Education debt is generally good because you generally make more money with more education. Credit card debt due to a fashion addiction is bad debt– there generally is no return on the investment.

    As for delaying having kids . . . if you can’t support yourself, it is unfair to children to be born into your mess (I am thinking Octo-Mom here– now she is exploiting them of course).

    Again, it depends.

  2. Dan Says:

    Putting yourself in bondage through debt is always a step which must be taken with a great deal of caution. Based on my experience, waiting is almost always the best answer, unless you have a definite plan.

    School: Getting into debt is just so much easier it causes you to overlook other options, such as community college for 2 years, then transferring to a university. Or busting your hump in high school to get those scholarships. Or working your way through school with a company which help help reimburse the expense of your education. Or working for a few years and saving up for college through frugal living.

    Marriage: Don’t get married if you cannot support yourself on what you earn. Don’t count on the spouse to support your extravagant lifestyle, defined as speding more than you earn. And don’t marry someone who expects this of you.

    Children: Don’t have them if you cannot raise them. Plan on having the extra funds to devote to them, or practice cutting back your lifestyle to see if you can do without the luxuries you take for granted now: New clothes, eating out, new cars, new phones.

    All in all, debt is a very dangerous toy and should not be entered into lightly. If you can, avoid it alltogether. If you must, look upon it only for real investment purposes, such as a house you can easily afford, or a practical degree you cannot fund any other way, assuming the payments will not be difficult given your eventual degree.

    Good luck! Stay out of debt! Your future self will thank you.

  3. Kristen Says:

    “We are ready to get married, but not ready for children” then I suspect that you might not be as ready for marriage as you might think . . .

    I agree with most of your post except for the above comment. I can’t say this applies to me because my husband and I have only been married for nine months, and we’re expecting our first child in October. (Of course we’re also in our 30s, and I think age factors in.) I know lots of people who have happy, long marriages who never wanted children. Marriage and parenting, in my opinion, are two very different things. I don’t think not being ready for children is an indicator that you’re also not ready for marriage, particularly for people who marry younger and want to travel and enjoy some time together first.

  4. Laura Says:

    Kristen, I completely agree with you. I have been married for 4 years and we plan to wait at least 2 more before having children.

    Just because somebody makes different life decisions that you, doesn’t mean that they are wrong. Saying that someone not ready for kids isn’t really ready for marriage is an extremely ignorant comment. I know single parents who are amazing and married couples who will never have children.

  5. Gina Says:

    I’m with DDFD … it depends.

    College – I was lucky to grow up poor too. A Pell grant paid for 3 of the 4 yrs of my college. I worked to pay for the rest but did end up w/$5k in a college loan that I paid off w/in 2 yrs of graduating. I attended the local community college for 2 yrs and transferred to a university in the “big city” for my last 2 yrs. This was the BEST financial decision I’ve ever made.

    Marriage – even though we waited b/c we didn’t have the money for the ceremony, using a credit card to pay for the wedding was my worst financial mistake. I’m still paying ‘stupid tax’ for that one.

    Children – our daughter arrived 6 yrs into our marriage; the same yr as 3 of her cousins. I’m glad God brought her when he did; she was our ‘financial epiphany’. There is no telling where we would be in this “credit mess of today” w/o her. We hope to have one more.

    Good post – gets you thinking about how you make decisions. We all know the effects of bad ones. It was nice to “talk about” some of the good ones.

  6. Christine Says:

    Is college even a good financial decision in itself? I rec’d my Bachelor’s degree and have a good career. But, I don’t say that it was my degree that got me here. Now, I am also in debt $29K with student loans.

    I think somebody with a good financial sense can make any salary work for them. Whether you have $5 on you or $5K. I am more hopeful about teaching my kids to respect and make their money work for them. And I am okay if my children attend a vocational college to learn a trade.

    If I was taught with the keen sense of how to handle my finances it would have saved me the ball and chain of student loans (cuz I would of made sure to pay as I go!).

  7. Marsha Says:

    I think that whether a decision is a good one or bad one is not measured by how things turn out – because rarely is how things turn out only a factor of your decision. So many things determine how things turn out, and many of them are out of your control.

    Instead, I think about whether a decision is a good one based on whether it was a reasonable assessment of the risks, etc. at the time – and/or whether it was a reasonably informed decision.

    Of course, how things actually turn out is also important! FWIW, I don’t know if my approach is better or not (maybe I’m just deluding myself?) – it’s just an alternative that’s helpful for me.

  8. Craig Says:

    I agree with Kristen and Laura. I am not married and don’t plan on being married for some time, but if you are married you don’t have to have children, there is no guidelines or timeframe. You just do what makes you both happy. Finances do play a major role in our lives because the stress of money is an issue. If you have the financial security than it may take away a lot of the stresses and could affect decisions differently. Either way something like having children may have no bearing on a couples financial situation for better or worse.

  9. Kika Says:

    My major life decisions – getting married and starting a family – were not strongly influenced by finances. We were ready (emotionally) so we went ahead. We were students when we married and when we had our first child. No regrets at all. We lived simply, bought second-hand, and loved every minute of it. Absolutely, day to day decisions are strongly influenced by finances. We still buy lots of second-hand so I can stay at home with my kids; we live within our means even if we wish at times we could live more extravagantly. I will encourage my kids to work hard for a year or two, living at home if possible, to save $ for post-secondary. Many young people who immediately enter university don’t know yet what they want to do with their lives. A little more time to dream, mature and acquire life-experience could help with this so that when they head off they are serious about their studies.

  10. Rajeev Singh Says:

    I think finances do play a very important role in our lives major decisions. None more than the role it plays in deciding to start a family. I am married for last 2 years and have not been able to make my mind on starting a family as yet and the reason is financial position. I need to save lot more than I am currently so that I can provide for my kid all those things which are reqd to give him a good life.
    So guess money does play a very crucial role in most of our decisions.

  11. Christy Says:

    I married my husband at 19 and we were living hand to mouth. I’m not saying I would suggest this for everybody, but 16 years later marrying him was the greatest decision I ever made and I am glad I didn’t let anybody talk me out of it because we were, in our friend’s words “poor as church mice”.

    We had enough for the two of us to live on and for me to start my education. We didn’t expect to live like we were independently wealthy, and we never cared that we weren’t – we just loved each other more than anything (and still do!). We knew our financial situation and were organized with what little we had.

    People scoff all the time at the age/stage I got married, and you know what? I’m not advocating it for others, but both us still say it was the right time for us and I can’t imagine getting married a day later. When you find the love of your life, little else matters.

    If you have enough $ to get by, realistic expectations about your standard of living and your relationship is strong, don’t let money, or any other factor make your decision for you about marriage. I think it depends about your attitude about money in general – if money sets the tone of your life, and you need a certain amount to be secure, then waiting until you’re financially stable might be best for you. But if you’re like me- money is a tool, and it’s not the primary focus of my life, then basing a decision like marriage on it is ridiculous.

    My 2 cents – might be less with the exchange. ;)

  12. Courtney Says:

    When people tell me “There’s never a perfect time to have children…” I respond with “Yes, but there are BETTER times.”

    And how ignorant is the statement “If you say, “We are ready to get married, but not ready for children” then I suspect that you might not be as ready for marriage as you might think . . .”?? There’s a growing number of people who get divorced after their kids leave the nest because they’ve spent their entire married lives being parents instead of spouses. I for one have greatly enjoyed the past 6 years of marriage being a WIFE and not a mother, able to devote time to my husband and building a foundation upon which we hope to eventually raise children in another 2-3 years. To say in a blanket statement that because I currently enjoy the benefits of being childless thus I am not “ready” to be married is ridiculous and presumptuous!

    The greatest gift you can give your children is a solid marriage. (The second greatest gift you can give them is not having to take care of you when you are old!)

  13. Kristy @ Master Your Card Says:

    With questions such as these I don’t believe there is any one answer that is right. It depends on the situation and the people involved. Personally, I waited to go to school because my parents refused to pay for college and I had to wait until 24 when I was legally released as their dependent in terms of student loans. I have student loan debt, more then I’d like due to poor decisions, but I don’t regret the decision. I could have forgone school altogether, but I don’t think I’d have been very happy with that decision. So, now I simply pay as much as I can every month while I’m still in school and once I’m eligible to refinance, I will do so.

    Now, that being said, if I were to meet a man who wanted to marry me, I would not mind at all his wanting to wait until my students loans were paid in full. I wouldn’t expect a dime from him to go towards that debt; however, I can understand how one might be cautious to enter into such a relationship. I would be as well. I think the most appropriate course of action is to sit down and have a serious discussion about our future and plans, as well as, how we feel about money in general. Upon that discussion, then we can make a determination as to whether or not marriage at that time makes the most sense for us.

    As to kids, I’m of the opinion that you shouldn’t have them until you can reasonable afford to take care of them. I’m not defining reasonably here because that’s to each parent’s discretion; however, for me, I would not like to be a parent until all debt has been paid, emergency fund is fully funded, and I could leave work and be a stay-at-home mom. Prior to that, I would not personally feel comfortable in the knowledge that I could afford to take care of children. But that’s just my definition and I do not project that onto anyone else.

  14. AJC @ 7Million7Years Says:

    You life isn’t about your money … but, your money IS their to support your life.

    And, there is a way to tie the two together:

    http://site.shareyournumber.com/

    Worked for me!

    AJC.

  15. Abigail Says:

    I’m afraid I, too, have to take HUGE issue with your glib statement about children.

    There’s never a perfect time to have children. True. But there are also times when it is a terrible idea to have children.

    My husband is unemployed and having to seek disability for the moment. We’re hoping to come up with some work he can do in the nearer future so that we can pay down some of our debt and move to AZ, where his severe eczema is practically nonexistent.

    We owe $6,800 on credit cards (mainly health/living costs since I’ve never worked more than a few hours a week thanks to my OWN health problems). We owe a total of $5,000 to our families, who have helped us out as needed. We also recently found out we didn’t pay off all of hubby’s student loans (long story) and so there’s another $4,000 or so that we’re rehabbing.

    Oh, and we have to pay for my husband’s insurance — $502 a month — and in total we make just about $3100 a month. Oh, and our rent is $700 a month. (Any half decent 2 BR, if we were to have a kid, would be $900 minimum.)

    So, we’re deeply in debt — considering that, after all expenses, we only have $300-400 each month to pay down debt — we both have health conditions keeping us from working much right now and we make almost no money.

    Clearly, our decision to not have kids right now is because we’re not ready to be married. Clearly, what we SHOULD do is go ahead and have kids, get on welfare, never pay down our debts, constantly just barely make ends meet — if that — and give our kid the kind of wonderful environment where his parents are never quite making ends meet, arguing about money all the time, stressed, angry and exhausted. I’m thinking THAT’S the way to raise a kid.

    The thing about sweeping statements… They tend to gloss over a lot of details.

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