FH and I are getting married in December, I will be 23 and he will be 29. We want kids but it won’t happen for at least 3-5 years because we are young and not ready for the commitment that children are. We aren’t in any rush and I’d like to be in a better place financially.
We have a mortgage now and will be taking out more money in the next year or two to renovate our apartment. It means that for the next 5-10 years things will be pretty tight financially, but we need to renovate before children (non negotiable). I also want a new car before then because I want a bigger and safer car before we have kids. I’ve been looking at getting a new car soonish because I want to give my current car (2012 Hyundai) to my sister to learn on it when she gets her license next year. I was initially thinking I’d keep the car for longer and only get my new car when we are closer to having kids, but I’m worried about having 3 big financial commitments when going on maternity leave - I want 1 year off and our government pays $650/week for 18 weeks under our entitlements (it covers our mortgage as is without the extra loan with a bit left over). I started thinking instead that I’d buy my new car now and this way I can pay it off fully before having kids so that there is one less financial obligation to worry about. I feel like it’s a little backwards but I think the logic makes sense? Does it? How have you all managed lots of expenses and maternity leave?
I feel like having a whole plan is a good idea, but you're right that some of it does seem a little backward. I think you should talk about it more with your fiancè and try to get on the same page, but since you asked for advice... I understand that renovating your apartment might be necessary before you have a baby, and obviously you're going to still have your mortgage. The only part that really seems off to me is the car. If your sister really needs a car, it's nice that you're trying to help her. But before you give it to her you should think about whether or not she really needs it (you can teach her to drive without giving her a car), whether you've already promised it to her, and whether it makes sense financially. When you buy a car, you have to make a down payment, which is a one time thing, so on one hand, getting it out of the way before you have to start paying for your renovations makes sense. On the other hand, if there's nothing wrong with your car, keeping it means you don't have any car payments and your insurance is probably less expensive than it would be on a newer car, which means you're saving money by keeping it, and you can use the money you save later on. Also, if it were me, I'd rather wait to buy a new car, because safety features are always improving, so I'd rather put my baby in a 2024 or 2025 car than a 2020 car if I had a choice.
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I definitely want a new car before kids for the safety features over my current car (and space), giving my current car to my sister would just be a minor aspect to it as the trade in value of my car isn’t great. Same as renovations, we will definitely be doing them - we have issues in our home I’d like fixed before baby. I wanted to put off the car but I just don’t want to stress about an extra $150-200/week in payments when we will already have $1,350/week expenses to worry about during maternity leave 😭
I think it depends on your long term financial plan . I unexpectedly had to buy a car last summer. Because we were kind of forced into it, we went ahead and got a bigger car thinking of babies. Now we are happy it ended up that way bc we will have a portion paid off before kids. But, we also plan to start trying right away. FH and i have an immediate financial plan (monthly budget etc) and a long term one for eliminating debts (car loans/student loans). It sounds like something that you and FH May want to work on before making the decision to take on a car.
EDIT: we have budgets in place to manage our finances short and long term, my concern is mostly in regard to those expenses during maternity leave as i will not pause our mortgage (it’ll cost us $5000-15,000 in interest long term).
You can plan and plan and hopefully it all pans out, but there are no guarantees. I think I'd keep your current car and use the money you were planning on for a car payment and put it into a savings account for that new car. That way you can almost pay for the car in cash and still have almost no payment when you do decide to have children. Safety features change yearly on a car and something newer and better always comes along. So buying one now (when you really don't need it) seems a little premature. Buy it when you do and save accordingly for it.
I feel like all this planning you’re doing is stressful and financially draining. Try to accomplish one goal at a time not “all of your goals at a time”.
The problem is the economy is going through a recession and what if something happens to your income and then you have all these financial obligations. What if you get pregnant earlier than expected. (There’s not a 100% pregnancy protection my friend got pregnant on the shot and using condoms). Would u be able to afford a baby, mortgage, renovations, car, and income loss? These things can happen. Never be in a rush for debt or a lot of financial obligations.
Have you been in many car accidents? Why is there a rush to get a new car before the baby? What safety features are you in a rush to have for the baby? Lane detections? Backup camera? These can all be added to current car.
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I agree with this. Buying a new car now based on space and safety features when you don’t plan to have children for at least 3-5 more years seems premature. While I can understand not wanting to carry a car payment when on maternity leave, spending money on a car you don’t need right now doesn’t seem necessary. As Margaret said, saving that money in order to buy a car in cash once you’re closer to needing a larger car makes more financial sense than buying one now to have a 5 year old car once you need the extra space/safety.
I agree with others in trying to just save as much money as you can between now and then. Also, is there a possibility of a promotion for either of you in the near future which can increase your take home pay? Or maybe casting a net and seeing if another job is paying more. Another option in terms of the savings is seeing if it's feasible for you to have some sort of side job for a bit so you can stash that away to make up for the year of income you will be missing during maternity leave. Again, I don't know how feasible these options are, but possibly something to consider.
Yea I don’t know if I’d want to do all of those goals at once either. I think it makes sense to want a new car though eventually but the timing of it has to work out where you’re not financially drained after
No, don't buy the car now. You'll be putting at least 3-5 years worth of miles/wear and tear on the car before you even need it. If finances are an issue, you don't even "need" a bigger car, not to mention that kids typically come one at a time so you could easily get away with your first kid riding in a sedan.
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Mortgage = $550/week Extra loan = $250/week General living expenses (bills, groceries, insurances, surplus) = $550/week To be completely honest we will not be stress free about finances for at least about 20 years until the mortgage is paid off. We have steady income to pay our debts (I’m a newly appointed lawyer, he’s in retail) but I think like many people it’s something that concerns me. To be honest I think I’m going to buy the car now. Safety features will improve over time but the cars I’m looking at have 5 star safety ratings, and if I buy now at least I can get a few thousand off the price by possibly trading in my car (if it’s worth nothing then I’ll keep/give to my sister) which I won’t have the option of later when the value is nil. Definitely getting new car before baby, my car is 8 years of age, hasn’t been well looked after (I got it at 16 and was a little reckless for a few years!) and it’s not worth spending money on this car. Funny enough everyone I’ve spoken to at home has said it actually makes sense to do what I’m doing, including 2 accountant friends. Hmmm
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So your current car is 8 years old, but you want to go ahead and buy a new car for a baby you don’t yet have and don’t plan to have for another 5 years putting said baby in a car that is 5 years old? Hmmmm
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Sorry I should clarify, we aren’t 100% set yet on when we have kids, could be earlier but I definitely want them within the next 5. I guess part of getting the car now is if it happens earlier (ie 2-3 years) the car will almost be paid off entirely.
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Am I not allowed to stick to my own opinion? Lol. I thought I’d see what others thought and whether or not there was anything that might be useful to note or consider. I think it’s always good to get some outside views on things but I think here I just realize we’re going to stick with it. My only concern is managing finances while on maternity leave for 1 year. Besides then we can manage all our finances just fine, it’s just that my workplace doesn’t offer any benefits above what the government pays so I’d be getting half of my usual salary while on maternity leave.
There is definitely nothing wrong with driving an older car with a baby. Many people (I would probably think most actually) do not buy the newest car out there when pregnant because that is a huge financial burden that not everyone can afford. Heck, the safety features in a car from 2012 are worlds away from what was available when we were all kids, and we all survived. It's much easier (and more economically feasible) to make sure the breaks and such are all in good shape and the car seat is installed properly and whatnot. OP, if it makes more financial sense for you to buy the new car now because of the trade in value and such, I see nothing wrong with that. If you specifically want the latest safety technology when that baby is born, then wait. But the child will honestly be perfectly safe (well as safe as possible in a car) in a 2020/2021 model.
I'd save the money for now, you have no current car payment on your car which means you can save the most. The moment you have a payment you will no longer be able to save the $ you're using to pay the car, not to mention the difference on insurance rates. Bigger and newer cars will usually cost a little more. My hubby and I are hoping to get pregnant mid-next year (this is an exclusive WW fam no one else knows about this so shh lol). We both currently have car payments, are renting (saving to buy a house) and I will be upgrading my car whenever I find out I'm pregnant and on the safe side of a pregnancy. Right now, my payments are low and I am paying extra off to build a better trade in value on my car so that it can serve as a good down payment. On the side we have our house savings but right now things are crazy so we're not looking either, we are however, keeping an eye out just in case a good deal comes by. It's probably not the best ideal situation but we are making it work and doing everything to get ready for what might come. We're making sure our credit it in good shape and we don't have any crazy credit card debt, paying off school loans, etc. This is as stressful as I'll allow the situation to get right now though, once the next step comes into light we will take on it. One step at a time, I'll be 32 this year so I'm at a point where I am ready to start a family. Best of Luck to you!