Kids are expensive, so to all the childless couples out there: here’s how to make the most of your savings towards retirement and staying debt-free.
A whopping 71 percent of American adults are now living without children. And when these adults get into a romantic relationship, the vast majority still opt to stay childless for a long time.
While having kids is a personal choice, being childless does come with some sense of financial freedom, right? You have no kids to feed, clothe, or educate. You don’t have to worry about making an elaborate financial plan for the future because, technically, you have no kids who depend on you.
Well, not quite.
Childless couples like you still need to make sound financial plans. Here’s how to do it.
Be Debt Free
As a childless couple, you really have no solid excuse to be in debt. At least couples who have kids can feel compelled to go in for personal loans when the going gets tough because they need to give their offspring a comfortable life.
However, like most childless couples, you’re most likely in debt. You probably have six-figure student debt, along with sizeable credit card balances and an auto loan.
Take your childlessness as an opportunity to prioritize getting out of debt as a couple. Use the money that could otherwise be going into raising your kids to aggressively pay off your debt.
And, instead of paying off the loans one by one, consider consolidating them (or some of them).
For instance, if you’ve got multiple credit card balances, you can consolidate them into one. You’ll get the funds to pay them off, then you’ll have one lender to deal with.
Wondering how does debt consolidation work? Here’s a guide.
You (Still) Need to Save for a Rainy Day
Faced with a $1,000 financial emergency, 37 percent of Americans would take out a personal loan or use their credit card. Don’t be among these people.
Yet, this is where you’ll find yourself if you don’t save for a rainy day.
As a childless couple, the temptation to live on the (financial edge) is strong. You probably believe you can take care of any emergency when it crops up, so you don’t have to save.
Well, a small emergency can quickly turn into a six-figure bill. A serious illness can leave you or your spouse with a hefty bill to settle.
This is why you still need to save money for a rainy day. Open a rainy-day account and put away some money every month.
Life Insurance Is Necessary
When you have kids, you need life insurance as a matter of priority. This secures their financial future in the event of an untimely death.
When you’re childless, you might have no motivation to take out life insurance, especially if your spouse is financially stable. The thing is you don’t need kids to purchase life insurance. Your partner will benefit from your policy in the event that you die earlier than them.
What’s more, both of you can take out life insurance policies and designate each other as beneficiaries. This way, your financial life is secure even if your spouse passes on.
You also need to purchase other forms of insurance, such as health and disability insurance.
Childless Couples Need a Solid Financial Plan
Childless couples have good reasons why they choose to have no kids, no doubt. However, don’t let this situation drive you into a world of financial irresponsibility. You still need a sound financial plan just as much as couples with kids do – you just won’t need to factor in things such as kids’ education into your plan.
Keep reading our blog for more personal finance tips.