My mother is going to be buying a new house in the near(ish) future, and for a number of reasons both labmonkey and I are going to be helping her buy it.
Working out our maximum budget has been a painful exercise. It’s been very hard to look at the properties online and see what would become affordable if we only had an extra $50k. The various “nice-to-haves” that my mother has mentioned would immediately become “easy-to-haves”.
It is hard not to dwell on what might have been. IF the septic system of the old house hadn’t been about to fail (a most unwelcome discovery from the house inspection). IF my stepfather had carried enough life insurance. IF financial mismanagement hadn’t proved to be the underlying theme of their retirement.
IF we only had a little bit more available to invest.
The inevitable effect of this has been a reassessment of our own financial situation.
Q. and I are debt-averse. We spend a lot of money on groceries because eating good food is important to us, and we spend a lot of money every couple of years visiting Q.’s family, but we live within our means and I wouldn’t describe us as careless.
By my best reckoning, we spent upwards of $30,000 of our own money at our fertility clinic. A little bit more than half trying to bring home E. and the rest on our failed efforts to give him a sibling (P. being our joyful and free surprise).
I want to preface what I’m going to write next with an acknowledgment of our privilege.
Q. and I were very lucky.
Q.’s benefits covered all of our medications (which cost easily the same again).
We didn’t have to go into debt to pay for treatments.
We didn’t have to remortgage our house.
We had to make sacrifices, yes, and choices, certainly, but we were able to afford what we needed to do.
On the surface, we navigated our way through those stormy years without any real sign of financial strain, and we certainly weren’t cast into financial hardship because of IVF.
I read a lot of financial blogs (I often think I should have been a financial planner if I hadn’t been an academic) and one of the things financial blogs, especially ones who champion frugality, spend a lot of time writing about is the power of compound interest.
It’s the latte factor argument: If you spend $ a day on lattes (or shoes or lunches out), five days a week, forty weeks a year, that equals $$$$ per year. If you cut out that expense and instead invested that money every year in a low-fee index fund then thirty years later you would have $$$$$$$$$$$$$$$$$$$$$!!!!!!!!!!!!!!!!
The argument is always about priorities. Does the chicken burrito bowl (my personal weakness) bring you enough joy to be worth its price tag? What are you giving up in return?
A part of me can’t help crunching our own numbers.
$30,000 is a not insignificant amount of money. It left our bank account in various amounts over a number of years, but the end result is the same as if we’d been spending it every day on coffee.
The power of compound interest reminds me that it wasn’t just $30,000 either.
It was $30,000 plus all the gains it made on the stock exchange.
Or it was $30,000 plus all the interest it saved us on our mortgage.
The financial argument breaks down, of course, when you look at the result of what that money was spent on.
My children are not a latte factor.
They’re worth it.
Of course they are worth it.
But we had to spend money where most couples don’t in order to be able to build our family.
And we will never recover the lost opportunity costs of the money we spent to bring them home.