A woman called into The Ramsey Show terrified that she and her husband were not financially prepared to have a child. The couple earns about $110,000 combined, owes $65,000 in student loans, and pays $2,200 a month for their home between the mortgage, taxes, and insurance.
The couple’s $65K total debt balance comes with an interesting twist. Her husband’s $45,000 student loan is only six months away from potential Public Service Loan Forgiveness, leaving her $20,000 balance as the couple’s primary remaining debt. After hearing the math, Dave Ramsey offered a reassuring verdict: “You are eligible, based on the numbers you gave us today, to be a responsible person and have a baby.”
Why Dave Ramsey Says the Couple Can Afford a Baby
A $110,000 household income against a $2,200 mortgage and $65,000 in student debt (with $45,000 of it about to disappear via PSLF) leaves real room to absorb the additional costs of having a child, provided the parents keep both paychecks.
Co-host Jade Warshaw recommended a boring, but tried-and-true solution: “Running a budget and seeing the actual numbers is going to give you real answers to your questions. Right now, they’re just a bunch of things floating around in your head.”
In plain terms, she advised the couple to draft a full month of the post-baby household on paper before they decide to have a baby. Add every new expense line (daycare, diapers, formula, pediatrician copays, added insurance premium) and subtract every expense they plan to save on (dining out, travel, the husband’s $45,000 loan payment once PSLF hits).
The One Decision That Could Cut Their Income in Half
This entire scenario assumes the couple maintains a two-income household. Co-host Warshaw named a trap that could turn their financial picture upside down: “I have this baby, now I want to stay home, now I’m down to a $55,000 income, with a mortgage that’s $2,200, I can’t do it. And I never paid off the $60,000.”
On a $110,000 household income, the couple can service a $2,200 mortgage, chip away at the $20,000 loan, and cover $1,500 in daycare with room to spare. On a $55,000 income, the same $2,200 mortgage eats a punishing share of take-home pay before any groceries or loan payment.
Key Takeaways
Dave Ramsey’s conclusion was that the couple can currently afford a baby on their $110,000 household income. The risk appears only if one spouse leaves the workforce before the student debt is cleared, cutting their income in half while the $2,200 mortgage remains. A realistic post-baby budget would show whether staying home is affordable and turn a vague fear into a decision grounded in actual numbers.
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