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Wondering if the dink life (dual income no kids) is for you? If you are considering whether you would benefit from this lifestyle, here's how to rock it out.
Life is full of choices. If you were to sit down and plan out an entire life for a complete stranger what would it look like?
It’s almost a silly question as the choices are endless. If I asked 10 different people I’d get 10 different answers like traveling is key or finding ways to make extra money is the only thing that matters. The only thing we could agree on is that there is no ‘one way’ to live a life.
My husband and I chose to not have kids. Have you heard the term DINK (dual income no kids?) The choice to not have kids carries with it both positive and negative consequences.
With every choice we make it’s important to seek out those positive opportunities that that choice availed to us. While at the same time we must be aware of the potential problems a choice may have exposed us to.
The decision to be a DINK has opened up opportunities for us as well as some things to be careful with.
The Finances Of Dual Income No Kids
At first glance from a financial perspective, this looks amazing right? All this money and no kids to spend it on. The department of agriculture reported that the average cost for a single child from birth to age 17 was $233,610, about $14,000 per year. For a DINK this is an opportunity that one can either make good use of or blow.
Financial Pitfalls Of Dual Income No Kids
Making good use of that extra DINK money can be more challenging than you think. After all, it's not like someone just cuts you a check for a quarter million dollars if you choose to not have kids.
Perhaps this opportunity is best viewed as an obligation, an obligation to pay yourself first.
Paying Yourself First
With every choice, you are presented with an opportunity and it's up to you to make good use of those opportunities. As a DINK you were afforded an opportunity to have some spare cash so don't blow it.
If you want to be invited to the successful DINK kingdom than you have an obligation. And that is to turn that financial opportunity into something great.
It's really easy to waste away an extra $14,000 a year, believe me, I've done it. It's essential to have a plan for saving this money. Investing in your future isn't an option as a DINK. In fact, DINK's have some hidden costs later in life that I will talk about in a bit.
Paying yourself first is about viewing your savings plan as a bill. It's not optional. You wouldn't overspend to the point you couldn't pay your rent would you? Well you shouldn't overspend to the point that you can't invest in your future. It really is that important.
Why DINK's Are Prone To Spending More Money
As a parent, you are reminded every day if not every second of the day that you have a tremendous responsibility. Perhaps the most important responsibility of your life, to provide for your child.
This parental responsibility weighs in on every big financial decision. It helps to reign in on spending because your financial future is a bit more complicated with a child.
As a DINK this parental financial filter isn't there. It's easy to take bigger risks with your spending. It's easy to buy that house that's a touch too expensive because you don't have a child in your subconscious going “what about me?”
Dual Income No Kids Is No Good For Taxes
When you're just DINK'n around with no kids you'll most likely have fewer deductions than a traditional family household. Meet your new child Uncle Sam. Paying more to Federal and State taxes at the end of the year can be a real problem.
It's a good idea to talk with a tax professional to find ways to shelter that tax burden. Perhaps through donations and you may need to consider claiming “0” on your W4's.
Long-term Consequences Of Dual Income No Kids
We've talked about some of the positives as well as some challenges of being DINK's. If we are to be good stewards of the DINK kingdom we must not forget the downsides of being a DINK.
Retirement And Elderly Care
I've already made my plug on how important it is to save for your future and practice the pay yourself, first model. Well as a DINK it's more important than ever.
Let's use me as an example. You see my dad is living with us because of some medical problems. He's got it pretty easy with a roof over his head, and hot meals. As DINK's we need to prepare ourselves for the unfortunate position my dad has found himself in. While I have some great friends I'm not sure their kids would be willing to take me into their home.
This is why getting started early with saving for retirement is crucial. As DINK's we just simply don't have the safety net to fall back on that a larger family would have. So having more money in the bank to handle unforeseen consequences of getting old is a must.
Insurance, Disability, And Life….
Make sure you have some avenues in place should something happen to your better half. As mentioned earlier, that family safety net may not be there for you.
Be sure to get your will in order as you may not have anyone else to handle this on your behalf should something happen to both of you. From medical decisions to who gets the house should be figured out early so that these decisions aren't left to the state.
You may be thinking to yourself, man this whole DINK thing doesn't sound all that good. I've got to pay taxes to my illegitimate child Uncle Sam and will have no one to take care of me when I get older. Not so fast.
Dual Income No Kids Is An Opportunity
I've said it before and I'll say it again. DINK is an opportunity. Whether you are just putting off having kids till later in life or choosing to not have kids at all, don't waste this opportunity.
Paying Off Debt As DINK's
People are having kids later and later in life. Many people want to get their finances in order or get some time in a career before having kids. While you are without kids be sure to take this opportunity to put a hurt on your debt such as student loans or credit cards.
During your 20's dual income couples should strive for saving at least 15% of their earnings and increase that to 25% in their 30's. This will assure a healthy start to beginning a family or moving forward as a DINK.
I can't over emphasize the importance of having a bucket list as a DINK. It would be a shame to go through life and not take advantage of the extra time and money that you have.
For my husband and I, our priority has been to retire early and travel for cheap. The extra time has also afforded us the luxury of getting into blogging and using that as a flexible income source to further support our interest in travel.
Perhaps it's a sport or a foreign language. But don't let your life pass you by and not have something to show for the spare time of being a DINK.
The Choice Is Yours
With effective time management and responsible financial decisions you can make the best of being dual income no kids. Live a full life and look back upon it without any regrets. The choice is yours.
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