Why New Parents Are in the Perfect Financial Situation

Why New Parents Are in the Perfect Financial Situation

Photo courtesy of skyseeker

People love to talk about how much it costs to raise children. They love to point out the big numbers and talk about how difficult it is to make ends meet when you’re starting a family.

And those things can be true. Babies do cost money and it is a difficult adjustment as you figure out how to manage your new expenses along with your new life. It was hard for me when we had our first and it’s still hard today. That’s normal.

But sometimes I think there’s a little too much focus on the struggle. And I think that causes a lot of people to miss the amazing opportunity that new parents actually have.

With the right mindset, I actually believe that new parents are in the perfect financial situation. Here’s why.

You have stakes

Great people do their best work when their backs are up against the wall and they have to raise the level of their game, or else. Challenges push us to step outside our comfort zone and achieve things we might otherwise have considered impossible.

High stakes are scary. High stakes are uncomfortable. High stakes force us to be better.

Having a baby raises the stakes. All of a sudden it’s not just your own life you’re responsible for, but the life of a tiny little child. Your child.

That’s a big responsibility. It’s a big challenge. In fact, it’s exactly the kind of challenge that can change your perspective and motivate you to achieve great things.

I’ve seen people tackle a mountain of debt when they started a family.

I’ve seen people start a business when they started a family.

When the stakes are high, you don’t have time to mess around. You either handle what’s important or you watch those stakes take over your life.

That’s a scary challenge for sure, but the truth is that we should be grateful for it. It’s exactly the kind of push that can show us just how much we’re actually capable of.

You have clarity

Clarity of purpose is the real key to financial success. Without it, your money has no greater mission. It’s just a thing that comes and goes, and if you’re not careful money itself can become the end goal.

But when your purpose is clear, you can direct your money towards the things that make you truly happy and away from the things that don’t. Your money has a mission, and that mission gives you a clear path forward.

This is why I have a 6-step process to determine what is (and isn’t) important in your life. It’s why I encourage you to think hard about what financial freedom means to you. Your purpose matters.

Having a child has a way of clarifying this purpose for you. All of a sudden, you have a new focus to your life. Things that you previously spent a lot of energy caring about suddenly don’t seem quite as important.

For a personal example, I spent most of my life living and dying with the wins and losses of my favorite sports teams. To be honest, an unhealthy amount of my personal self-worth derived from their success or failure. When the Patriots lost the Super Bowl in 2007, I remember my brother saying it felt like he had just been dumped by the love of his life. That was it. That’s what it felt like. That’s how important it was to me.

Now that I have a family, that stuff just doesn’t matter as much to me. It wasn’t a conscious decision to care less. It just happened. It’s actually hard to admit given how much of my life I’ve spent with sports as a significant part of my identity. I still watch and follow my teams, and I still care, but it’s not the same.

Part out of necessity (limited time and resources) and part out of a change in circumstance, having a baby has a way of forcing you to rethink what’s important and what isn’t. And since personal finance is really all about finding a way to financially support the life you want to live, that clarity of purpose is a huge asset.

Once you understand what it is that truly matters to you, you can start taking the right steps to make it happen.

You have time

No, you don’t have a lot of time on a daily basis when you have a young family. Trust me. I know. Between diaper changes, naps, meals, baths, spit up, block towers and everything else, it can be hard to find the time to pee, let alone get your finances in order.

But you do have a lot of life in front of you, and that’s a huge asset.

You don’t have to fix everything all at once or never fix it at all. You don’t have to cross off choices because you don’t have enough time to make them happen. You’re not staring retirement in the face and wondering how the heck you’re going to make it work.

You have the luxury of defining exactly what it is you want from life and having the time to make it happen. All it takes is the courage to start and the determination to take a small step forward every day. That’s it.

How will you take advantage?

Starting a family is absolutely a challenge. There are a lot of new things to figure out, financial and otherwise, and it can take some time to get your feet under you.

It was a struggle for me at the start and it’s still a struggle today. Still a challenge. There’s no shame in that.

But that same challenge can push you to build a better, happier life.

When viewed with the right mindset, it’s the opportunity of a lifetime.

How will you take advantage?

Start building a better financial future with the resource I wish I had when I was starting my family. It’s free!

14 Comments... Read them below or add one of your own
  • Mike Ritter September 4, 2014

    Couldn’t agree more on the priority shift with having a child and the benefits to it.

    • Matt Becker September 4, 2014

      I think that makes a huge difference. Of course, there are many routes to finding your priorities and you don’t have to have children to do it. But a child is certainly a pretty big push in that direction.

  • Syed September 4, 2014

    I can attest to all of these points as I have experienced this since having my son almost 2 years ago. My big thing used to be video games. Before my son was born, I used to be able to play at least an hour a day and I loved it. I actually haven’t even touched a video game in 6 months! And I don’t feel like I’m missing out on anything. In fact I started selling my old games now for decent money now that I don’t care about them too much.

    I apologize for having to do this but I’m a HUGE NY Giants fan and I was thoroughly ecstatic after the 2007 Super Bowl. And the 2012 one for that matter. Brady must still have nightmares about Eli. Again, sorry, but had to be done 🙂

    • Matt Becker September 4, 2014

      Oh man, video games were so much fun! It’s weird when you realize that you just don’t care anymore about certain things that used to mean the world to you, or at least don’t care as much. It can be hard to accept.

      No comment on the Giants. Too many scars.

  • Money Beagle September 4, 2014

    Very good points. All too often we only see the downside, but I like the approach of taking a look at the upsides that come into play.

    • Matt Becker September 4, 2014

      Thanks! It’s certainly not an easy road, but I really do believe that these factors can be a powerfully positive force. It’s all in how you choose to use them.

  • Dee @ Color Me Frugal September 4, 2014

    Great points here. We just adopted our first child and having her has already changed everything. Just as you mentioned, for us it’s really clarified what is and is not important in life. We already had finances pretty much in line before having her, but now that we have her I will say it’s increased the urgency on the debt payoff plan. It seems ludicrous to be still paying off our student loans when we need to start saving for her college! Gotta get those puppies gone, and soon.

    • Matt Becker September 4, 2014

      Congrats on the adoption! That’s so exciting! You guys are definitely on the right track and it sounds like you’re taking advantage of exactly what I’m talking about here to make some really positive progress. Nice work!

  • Ben @ The Wealth Gospel September 4, 2014

    Great thoughts, Matt. We’re expecting in February, and after seeing all my siblings go through the shift in priorities, I’m ready for ours to come. Will be interesting to see how it all develops!

    • Matt Becker September 4, 2014

      Oh wow, congratulations! It’s impossible to predict ahead of time but you guys will find your groove. Good luck with all the prep work!

  • Shannon September 4, 2014

    “Great people do their best work when their backs are up against the wall and they have to raise the level of their game, or else. Challenges push us to step outside our comfort zone and achieve things we might otherwise have considered impossible.”

    This completely reminds me of a book I just read called “The Talent Code”. It talks about how we build skills and one of the quotes often mentioned in the book is how we build skill by operating at the edge of our abilities. And they have actually neurological evidence to prove it. This post is a great exemplification of that!

    • Matt Becker September 5, 2014

      Oh wow, that’s pretty cool! I’ll have to put that one on my to-read list. Thanks for the recommendation!

  • Mrs. Frugalwoods September 6, 2014

    Such great advice! We are planning on having kids very soon and, fortunately, already have the clarity of purpose you mention. We’re so focused on our long-term goals and what we want for our family, that I hope we’ll be prepared when the kiddos come along. I’m even more inspired after reading this–thank you!

    • Matt Becker September 7, 2014

      Best of luck with everything! I’m sure you guys will be great!

Leave a Comment