Why Saving $5s Is Better Than Not Having Kids (If You Want Them)


Having a baby before you can afford one is a bad idea. They need clothes and food. They cost you dozens and dozens of diapers. They grow up and want to go to college, and hold on, mom and dad. Next thing you know, your offspring is spending your retirement money on tuition, room and board, and fees.

Unless you’re like a growing number of American women who are delaying motherhood for economic reasons.

Or unless you save your $5s because a fives nest egg accumulated over time could ease the financial tensions of raising a child.

But back to delaying children. Recent federal data points to a plummeting US fertility rate—half of what it was in the late 1950s and the peak of the Baby Boom. Forty years ago, an American woman typically had her first child at age 21, compared to 26.3 today, according to the study recently published in The Boston Globe.

Perhaps more revealing, the same study claims that 40 percent of women ages 40-55 say they wish they had more children than they do.

Birth control, education, and feminism are some of the reasons for the birthrate decline, according to the study. So too is the fear that many harbor—that they can’t afford to have children.

Putting the study aside for a minute, let’s break this down into the most simplistic of terms. If a 21-year-old decided today that she wanted to have a child in five years, and began saving two $5 bills a day until the baby’s birth, $17,600 would already be set aside to help with the child’s expenses. Save two more $5s a day until this baby is 18 and ready for college, and the amount saved would have grown to $63, 360. Get super extravagant and put aside three $5 bills a day for 23 years and the nest egg (352 days X $15/a day=$5280/year by 23 years) for a grand total of $121,440.

At the very least, you’ve got the cost of diapers covered!

Yours in Fives,







The Ugly Truth About Unexpected Expenses

When it comes to handling unexpected expenses—the old appliance that finally goes kaput, the big car repair, the emergency visit to the dentist—most people are unprepared.

In fact, a recent article that I read in a respected business journal reported one poll where more than 75 percent of Americans said they would be unprepared for an unexpected $400 expense. The same article said most of these people would charge the expense on a credit card and pay it off—or not—with interest over time.

In other words, they would have to go into debt (or more debt) to finance the unexpected $400 bill. Ugh. Still, it shocks me that three-quarters of those polled would be badly shaken by a $400 expense.

Not to minimize the personal finance challenges many people face, and clearly there have been times in my life when a blown out carburetor sent me into a financial tailspin. But $400, if you save your $5 bills, can be accumulated in a relatively short period of time. Even if you only save $20 a week in $5s (I typically save between $35-$60/week), you’d have $1049 saved in a year, or enough saved to face two and a half of those $400 emergencies a year.

Just saying. Happy Monday, everyone!

Yours in Fives,