Over the last few months, I have noticed an interesting pattern happening among newly married couples. These are the young early 30’s couples who spend their 20’s growing their incomes, dining and entertaining like it was going out of style, and most importantly getting the American Dream (at least in their head) of having a $500,000 home with all of the toppings. These couples seemingly had nothing that could stand in their way of financial success.

Until, along came junior. Magically, in a swift and furious way, these couples are beginning to realize the basics of financial planning. It is impossible to grow your wealth when your expenses exceed your income. In many of these couples, each spouse was making a $50,000 to $100,000 income, and total household income would well exceed $100,000. When they purchased their home, cars, and fancy things, there was no forethought about what would happen when the baby arrived.

Will we both work full time? With that line, the realization set in about the actual cost of day care or nanny services to their bottom line. Well, maybe one of us will work part-time, but still be able to earn the same income. Fat chance! As employers are trying to squeeze every ounce of productivity they can out of their workforce, trying to implement a part time schedule is a difficult first step to begin with your employer. Even if you do pull it off, thinking you will be able to earn the same income is highly unlikely. Perhaps one of will stay at home? With that being said, where will the other half of the income come from to make financial ends meet.

All of this compounded by the fact of the additional costs that come with having a new baby are putting this group of late stage Gen X’ers in a financial bind. For those thinking about having a baby, you should begin asking these questions and taking a close examination of your fixed and discretionary expenses so you can predict where your financial picture will be when you have a new baby.

If you don’t plan, the baby may not be the only thing that keeps you up at night.

Ted Jenkin, CFP^®, AAMS^®, AWMA^®, CRPC^®, CMFC^®, CRPS^®

Co-CEO and Founder oXYGen Financial, Inc.

oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.

TED JENKIN IS SECURITIES LICENSED THROUGH INVESTACORP, INC. A REGISTERED BROKER/DEALER MEMBER FINRA, SIPC. ADVISORY SERVICES OFFERED THROUGH INVESTACORP ADVISORY SERVICES, INC. A SEC REGISTERED INVESTMENT ADVISORY FIRM.INVESTACORP INC., AND ITS AFFILIATES, DO NOT GUARANTEE, APPROVE NOR ENDORSE THE INFORMATION OR PRODUCTS AVAILABLE AT THESE SITES, NOR DO LINKS INDICATE ANY ASSOCIATION WITH OR ENDORSEMENT OF THE LINKED SITES BY INVESTACORP INC., AND ITS AFFILIATES.