Same math. Bigger stakes.
Kids change spending patterns more than any other life event. The good news: the math you learned in your 20s still applies — you just need to layer in college funding, insurance, and a smart housing decision. Don't sacrifice retirement for college.
Your priorities, in order
Lock in term life insurance
If anyone depends on your income, get 10-15× annual income in term life insurance. Cheap (~$30-60/mo for $1M term in your 30s) and only matters if you skip it. Avoid whole life — it's expensive insurance + bad investment.
Don't over-buy the house
Total housing (mortgage, taxes, insurance, maintenance) under 28% of gross income. The "you can afford it" lender approval is usually 35-43% — that's house-poor territory. The hidden costs (maintenance ~1-2% of value/yr, property tax) wreck many family budgets.
Retirement before college fund
Your kids can borrow for college. You can't borrow for retirement. Max retirement accounts first, then 529 plans. Many parents reverse this and end up financially dependent on their kids in retirement — worst outcome for everyone.
Open a 529 for each kid (start small)
$200-400/mo from birth in a 529 plan grows to $80-160K at age 18 at 7%. Covers most of a state school. State tax deduction in many states. Don't fund the 529 if it means cutting retirement contributions.
Update beneficiaries and write a will
Marriage, kids, divorce, parents passing — every life event changes who should inherit what. Online wills (Trust & Will, Wealthsimple Wills) cost $100-200. Beneficiary forms on retirement accounts override your will, so update them.
Calculators built for this stage
Recommended reading
Frequently asked questions
How much should I save for my kid's college?
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How much house can I really afford?
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Term life or whole life insurance?
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