![\"Big](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/03\/812ce330-28aa-11f1-bf5b-8a8a0d49b574.png\")
If kids are on your radar, there are four things you want to do before you make a property move. (Source: AAP\/Getty) <\/p>\n If kids are on your radar, there are four things you want to do before you make a property move. (Source: AAP\/Getty) <\/p>\n
Most people assume that taking on less debt before having kids<\/a> is automatically the smartest move. And sometimes it is, but not always.<\/p>\n There\u2019s a window before kids where your borrowing power, savings capacity, and flexibility are stronger than they\u2019ll be for years afterwards. If you don\u2019t use that window well, the cost can be bigger than most people realise.<\/p>\n Because once kids arrive, money usually gets tighter, fast. One income often drops while someone is on leave, then childcare costs kick in, and part time work goes on for years. Through this time, your ability to save, invest, and borrow<\/a> can fall away when you want it most.<\/p>\n RELATED<\/p>\n Starting a family is obviously about a lot more than money. But if you can make smart moves before the savings squeeze hits, you give yourself a much better shot at coming out the other side in a strong position.<\/p>\n One of our clients learned this the expensive way.<\/p>\n Before having their first child, they were in a position to buy a property and the bank would have lent them up to $1.1 million. They were saving well and had a good buffer in place, but they figured that taking on that much debt would be too aggressive.<\/p>\n So instead of using their full borrowing capacity, they purchased a lovely property in Sydney\u2019s inner west, but purchased at a lower value of $700,000. This property was a good purchase, and over the next few years they made money, but after their first child arrived their finances changed.<\/p>\n Income dropped, expenses were up, and the banks were much less excited about lending them more money. By the time they realised they actually could have handled the bigger purchase, even after allowing for higher rates and lower income, the opportunity had passed.<\/p>\n It took just over four years before this couple\u2019s household income returned enough to seriously think about buying property again.<\/p>\n The difference between our couple spending $700,000 and $1.1 million was an extra $400,000 of property exposure they never got working for them.<\/p>\n Over the following four years, that missed exposure meant they missed out on more than $135,000 of property growth while they were busy with young kids and in no position to reload.<\/p>\n That\u2019s the part that most people might notice, but the bigger cost comes from what happens next\u2026<\/p>\n Story continues <\/p>\n If you assume a long term property growth rate of 7%<\/a>, that extra $400,000 of property exposure would grow to around $1.1 million over the next 30 years. That means more than $700,000 of additional growth could have been captured just from using borrowing capacity more effectively earlier.<\/p>\n Our couple had no idea that the cost of being slightly conservative would be measured in the millions of dollars. The cost of doing less isn\u2019t just the money you miss in the short term – it\u2019s the decades of compounding attached to the opportunity you never took.<\/p>\n Just to be clear, this isn\u2019t an argument to max out your debt and hope for the best – that would be risky and reckless. The real message here is that if you\u2019re planning on having kids, you\u2019ll benefit from being deliberate about how you use your borrowing capacity while you still have it.<\/p>\n Used well, leverage can be powerful, but used badly it can cause you trouble. Any time you\u2019re thinking about borrowing, it\u2019s important you understand the risks and plan around them, but this can all be done with the right approach to your planning.<\/p>\n The right question here isn\u2019t \u2018what\u2019s the maximum amount the bank will lend?\u2019, but instead \u2018what can I borrow safely after stress testing the numbers?\u2019.<\/p>\n To do this effectively, you have to crunch your numbers through a solid plan, building buffers for rates and emergencies, and planning ahead for lower income and higher costs that come with kids. If you\u2019re not a numbers person, or are nervous when it comes to making million dollar decisions, consider getting some good advice – as you can see from the numbers above, this will pay for itself many times over.<\/p>\n Good property leverage<\/a> can accelerate your progress, but only if your structure and risk management are right.<\/p>\n If kids are on your radar, there are four things you want to do before you make a property move.<\/p>\n First, understand your borrowing capacity. A good broker can help you map out what\u2019s realistic, which is why knowing how to choose a good mortgage broker<\/a> matters more than most people think.<\/p>\n Second, map out your cashflow and how it will change post kids. A proper bank account budgeting system makes<\/a> this a lot easier because you can see what you\u2019ve got to work with and how much room you\u2019ve really got.<\/p>\n Next, ensure you have buffers in place before you stretch. The best property plan is worthless if one surprise forces you to sell at the wrong time.<\/p>\n And finally, make sure the strategy fits in with your bigger picture. Sometimes property is the right move, and other times it\u2019s not – do the true comparison before you jump in.<\/p>\n Most people think that being conservative with money before having kids will automatically put you in the safest position, but sometimes it actually does the opposite.<\/p>\n If you aren\u2019t dialled in with your strategy while you\u2019ve got options, you can lock yourself out of opportunities for years once family life changes the numbers. The smart rule isn\u2019t to chase the biggest loan possible – it\u2019s to use the pre-kids window well, and make sure your money is working hard for you before life gets more expensive and more complicated.<\/p>\n Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth<\/a>. You can learn more about how to be smart with your money through Ben\u2019s book Replace your Salary by investing<\/a>.<\/p>\n If you want some help with your money and investing, Ben has created a free seven-day challenge<\/a> you can use to get more out of your money you can join here<\/a>.<\/p>\n Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n If you aren\u2019t dialled in with your strategy while you\u2019ve got options, you can lock yourself out. (Source: Getty) \u00b7 Getty Images <\/p>\n