How Kids Can Wreck Your Financial Security
Life + Money

How Kids Can Wreck Your Financial Security

Lucy Nicholson / Reuters

As any new parent will tell you, the giggles of a baby or a first steps of a toddler are priceless milestones, but that doesn’t meant that they don’t come at a cost.

All the increased expenses that come with children take a toll on the financial security and confidence of their parents. Among young workers recently studied by Financial Finesse, those without children were far less likely to report stress than those who did have kids.

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Workers under age 45 with kids were less likely to report control over their cash flow, have an emergency fund, feel comfortable with their debt, or pay their credit card balance in full. The difference was largest among the youngest workers (under age 30) who had children and those that did not.

Just 37 percent of young parents surveyed, for example, said that they paid their credit card balance in full, compared to 63 percent of those without kids. Similarly, fewer than a third of parents under age 30 had an emergency fund, while more than half of childless, 20-something workers had one.

It’s easy to see why those with children — especially younger people who tend to have lower salaries — would be more stressed about their finances. A middle-income family spends nearly $13,000 a year on their children, for a total of more than $230,000 through age 17, and that’s before factoring in the cost of college.

While having children was associated with financial stress, the study found that home ownership was associated with strong financial wellness. Workers under age 30 who owned homes were more likely than peers of any age to say that they had control over their cash flow and feel as though they were on track for retirement.