How Should You Space Out Having Kids for Best Financial Results?

Via LearnVest By Jessica Kraft ~

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After I had my daughter in 2009, it wasn’t long until my husband started bringing up the topic of a second baby. One of his biggest priorities is giving his children what he didn’t have growing up, and as an only child, he was eager to get going with the sibling project.

I, on the other hand, was totally gobsmacked by the realities of child-rearing, and couldn’t possibly imagine going through the experience of pregnancy, labor and infant care again anytime soon. When I realized our annual expenditure for preschool and childcare in San Francisco would top out around $25,000, I was even more convinced that waiting a while to expand our brood would be prudent.

Yet, as I amassed loads of emotional and career-related reasons for delaying #2, I had trouble finding sound financial backing for my position.

The Questions I Asked Myself

Everywhere I looked, moms talked about the lower marginal costs of having more kids. Lisa Belkin laid out the facts in a piece for The New York Times, in which she described how author Laura Vanderkam decided to have a third child after looking at her finances. With all their baby and toddler items already purchased, and discount rates for multiple kids at daycare, it would only cost the Vanderkam family another few thousand to support another kid.

Soon, moms who’d given birth around the same time as me started getting pregnant again and preparing for double trouble. There seemed to be a consensus in my cohort that spacing children about two years apart was the best overall, and indeed, 30 months is the American average. Health experts advise women to wait at least 18 months between pregnancies to recover physically and rebuild sufficient nutrients and iron.

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But to me, the drawbacks of a two-year spacing seemed enormous in the short run–I cringed every time I saw a mom toting two kids under three. She always looked tired and overwhelmed.

Is it a high cost (in terms of effort, time, exhaustion) in the early toddler years in exchange for greater returns in the future? Sure, there’s the lack of sleep for a few years, and one member of the couple would likely take a backseat on his or her career trajectory for awhile, but wouldn’t it be great once the kids were in school, doing similar activities and sharing clothes and toys?

In order to figure out my own family planning, I decided to chart out the financial benefits of spacing kids apart by two years, three to four, and five or more. Here’s what I found.

2 Years or Fewer Between Kids

Cost-cutting: The financial benefits here are immediately apparent, especially for moms who stay at home or work part-time. By the time baby #2 arrives, you’ve got all the supplies you need and your house is already child-proofed. Whatever your childcare arrangements, adding a second kid won’t be twice as expensive—nannies charge a few dollars more per hour, and daycare centers and preschools give sibling discounts.

But on the flip side, won’t having two kids in college at the same time eventually drain your savings account? Good news: Probably not! Colleges usually lessen the tuition load and add on more grants and loans for parents with multiple college-age kids. Though socking away more of your money in a 529 will be something you’ll want to factor into your budget.

Career: Unfortunately for working moms, two closely-spaced maternity leaves can rub managers the wrong way, and four consecutive years of little sleep can impact work performance. But, once again, if the American average between kids is 30 months—and 39% of household breadwinners are moms, you certainly wouldn’t be the only mom attempting this feat. For those who choose to go the stay-at-home route, the closer spacing consolidates the mother’s time out of the workplace.

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Effort: Spacing kids closely together comes with the obvious challenge of taking care of two little ones at the same time, whereas a bigger gap might mean older sibs are more self-sufficient. All the same, you’re still in the mode of changing diapers, washing sippy cups and able to remember the details of treating infant fevers and recognizing developmental milestones.

Overall: If you space your kids two years apart or less, you will ultimately save tens of thousands of dollars. All the same, you’ll want to consider the potential cost to your–or your partner’s–career.

LearnVest is the leading lifestyle and personal finance website for women.