• Mduduzi Luthuli - Director / Investment Management

Don’t wing it!

Having and raising children comes with a price tag, a huge financial responsibility that must be seriously prepared for. We often hear that purchasing a home is the biggest expense you’ll take on but raising a couple of children will exceed that for most people.

Money plays a vital role in raising a child and the financial responsibility that comes with it must be put into considerations when you prepare to become a parent. Having kids like getting married must be prepared for and apart from the mental readiness to face the struggle that comes with parenting, financial readiness is equally important.

There’s no magic number for how much money you need to have before having kids, but the following requirements are a basic guideline of what should be in place: -

  • Job stability,

  • An emergency fund equivalent to 6 months’ salary,

  • Comprehensive insurance cover,

  • A Will and,

  • Have minimal debt or better yet, be debt-free.

The above might seem unattainable but it is certainly worth striving for. Don’t wing it! Failure to plan accordingly for a child or children will force you to accept a much lower standard of living.

Children Cost Money

Of course, the cost of raising children is largely up to you, but there are no free kids. Conception might have cost you the price tag of a candle-lit dinner and bottle of Moet, but the delivery and raising costs are a whole lot more. After that, you can expect to pay for a host of additional expenses, including but not limited to:

  • Food - Humans need it.

  • Shelter - Plan on one or more extra bedrooms and an extra bath.

  • Clothing - Babies and toddlers seem content without it, but they all need it.

  • Childcare - They can’t take care of themselves until sometime around 27, give or take.

  • Healthcare – Don’t even get me started!

  • Activities - Sports, music, camps, etc…

  • Parties - Your kids will have birthdays. So will all their friends.

  • Transportation – You’re the chauffeur.

  • Education - Education isn’t optional.

  • Tertiary education - Optional, but highly recommended.

  • Utility Bills - Increased laundry, water, electric, etc…

There are many things you can choose to do to keep these expenses in check, but you will be spending money on these kids every single day for at least eighteen years. It’s just a fact of parenthood.

Already a Parent

If you already have children and are just now looking into getting your act together to aggressively move toward early financial independence, then I’m sorry to say that no, you can’t have it all. You cannot continue to earn what you earn, spend what you spend, and put no effort into building additional wealth, be it through a business or an investment account, and expect to move toward financial freedom at an accelerated rate.

The fact that you have children and have bought into an expensive lifestyle as the definition of success does not preclude you from the realities of math and money. You absolutely must earn more, spend less, or put in the time necessary to build businesses or scale investment returns.


Looking for ways to cut back on spending that make no difference in your day-to-day happiness should be a no-brainer. Things like downgrading the car(s), growing your own vegetables and walking/ biking to work (if possible) are good places to start. Those are the easy changes.

The problem is that the things that will materially impact your financial position are things like housing, transportation, childcare, career opportunities, and investing, depending on the amount of after-tax assets outside of home equity you have accumulated to date. Those categories will impact the time you spend with your children—and where they spend their time (private or public school).

Whatever you decide to do, have a financial plan and by all means... DON’T WING IT.


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