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Is it possible to invest when you have kids?

Is it possible to keep investing when you have children?

If you’re used to regularly investing I can see why you’d be worried that you wouldn’t be able to contribute to your portfolio any more.

We’re regularly told that kids are really expensive. Every family’s budget and preferences are different, but with a child you probably need an extra bedroom, there’s all the extra food, the toys, activities, clothes and so on. There’s a reason why Baby Bunting Group Ltd (ASX: BBN) is such a large and growing business.

Some households will be limited by their income as to whether they can keep investing or not. If it was hard to find the cash to invest before kids then it will be even harder afterwards, particularly if you lose one of the sources of income or have to pay for childcare.

Don’t be too harsh on yourself if you’re not able to invest right now, the only measuring stick you should measure yourself against is yourself.

Quite a lot of Australian families start receiving family tax benefits when they have children, which is ‘new’ money for their budget. It could be an idea to just invest that money into shares.

But you may need to think about your other assets first. When children come along it’s important to put yourself in a good financial position, so you may decide to increase your emergency fund to the equivalent of four months or more.

If you have kids and are still able to invest then great. If you can’t invest but want to, your personal finances need a combination of trying to raise income and lowering expenses (such as doing more low-cost bulk meals and so on). No-one said kids are cheap!

Foolish takeaway

Even if you’re not able to save anything, your superannuation is still hopefully getting regular contribution which is helping your net worth improve. So don’t feel bad!

If you’re investing with kids, some of the shares I’d consider are these great dividend shares.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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