4 Ways Not Having Kids Can Affect Your Financial Future

Many people choose to become parents, but not everyone wants or can have children. As a parent, your financial situation can be much different than that of someone without youngsters. If you're on the fence about starting a family or know that becoming a parent isn't your ideal life path, choosing not to have kids may positively affect your finances. Here are a few ways not having kids can be a win for your financial future.

1. You can adequately prepare for retirement

When you're not a parent, you won't have to worry about child care costs, the added expense of raising children, or how you will afford to send your kids to college.

That frees up money for other important financial goals, like investing for your retirement years. Choosing not to have kids can positively affect your financial future by making it easier to adequately prepare to afford your living expenses during your non-working years.

If you're childfree, consider whether you're on track to retire within your desired timeline. If you're behind, consider boosting your individual retirement account (IRA) or other retirement account contributions to prepare accordingly. Compound interest is your friend, so investing more money earlier in life gives you more time to benefit from compound growth.

2. You have more freedom to take risks

Since you don't have children to care for and fewer people rely on your income for stability, you may feel more confident to take more risks to improve your life.

Here's one example of how this might apply to your finances: You can transition into a new career. For busy working parents, this can be more difficult. They may rely on employee benefits from their current job or be less able to take a new role with a different schedule since they have to accommodate daycare drop-off or after-school activities.

It's never easy to take a risk or make a life change, but knowing that you don't have kids who will be negatively impacted if you make an expensive mistake may motivate you to take action. Just remember that building a solid emergency fund is important before making any big life change.

3. You can earn more during your lifetime

For many parents, balancing raising a family while making career advancements can be difficult. This is especially true for mothers who often leave the workforce because child care costs are so high that it makes more financial sense to stay home to care for their children.

The Mommy Track Divides study found that having a child costs the average highly skilled woman $230,000 in lost lifetime wages. In addition to having more money in the bank, those who don't have kids are more likely to be able to make career advancements.

They may also make more money throughout their lifetime because they can make more career progress. And they might have fewer gaps in their work history, since they don't have to decide between staying home with their children or working and paying for child care.

4. You may be able to afford to retire sooner

Another way being childfree can positively affect your financial future is the possibility of retiring earlier. While many people enjoy their work, having to work into your later years is not ideal. Even if we plan to work for many more years, our health may not allow it.

Some may find that not having the additional costs of raising a family allows them to retire sooner than anticipated. Alternatively, they may be able to limit their work hours to work a more part-time schedule to travel or spend more time with loved ones.

A non-traditional life may be a win for your finances

For some people, parenthood best aligns with their goals. But this life-changing decision is not for everyone. Taking a non-traditional approach to life, like choosing not to have kids, may offer financial perks. For more money tips, check out our personal finance resources.