Baby Debts

Hi Barefoot,

We've just got married, and are looking to start our family quick smart (we're both 35). However, I'm concerned about servicing our current debts. We have 3 units valued at $400k, $550k and $800k respectively and owe $250k, $250k and $600k on each. We can do this at the moment, however when my wife has a baby her income stops and she is the main breadwinner. She earns $140k and I earn $90k p.a. Should we sell something? I'm completely overwhelmed!

Chris

Hi Chris,

Without seeing details of your household expenses, the income you receive from your investments, and the condition of your properties, it's hard to give a specific recommendation. However, if you're planning on supporting your family and being on hook for the upkeep of three investment properties, for an extended period -- on $90,000 -- that sounds...ambitious.

The good news is you're asking questions at the right time. You're moving into a new, very expensive stage of your life. Things won't go back to 'normal' for fifteen or twenty years.

So, sit down with your wife tonight and discuss your 'new normal': how many kids will you have? When does she see herself going back to work? How much will childcare eat into her wage? Would you consider being Mister Mum?

Dude, talk to your married mates, and ask them if they wished they'd had a conversation like this before they both found themselves up to their elbows in nappies. You're on the right track.

Scott