As more and more millennials and gen-xers grow up, they are deciding to wait on having kids or not have any kids at all. This is in stark contrast to Prior Generations where people would have kids in their very early twenties. They have a name for these kinds of people. DINKS (Dual Income No Kids). What a fun word 🙂
My wife and I are DINKS too, and it’s partly my fault for that! Being such a planner, my goal was to always set our financial Foundation first before starting a family. That has worked out pretty well so far!
It works to build our wealth by investing in real estate, stocks, and our retirement accounts. It’s comforting to see that we have a pretty good Financial trajectory before having kids.
However, being a DINK is also sometimes frowned upon depending on who you ask. And that’s okay too!
Without getting political, here are the Top 8 Financial Tips for DINKS that I’m sure will find very insightful.
- What does DINK mean?
- Why are couples choosing the DINK life?
- Financial Tips for DINKS
- Pros and Cons of a DINK Lifestyle
- Final Thoughts
What does DINK mean?
DINK stands for Dual Income No Kids. It simply refers to a household where two individuals earn income but have no children. Some couples intentionally off to wait longer before having kids and they also referred to as DINKS or DINKY.
Why are couples choosing the DINK life?
One of the primary reasons couples are choosing to wait or completely won’t go having children is financial.
With the looming student loan crisis, Rising house prices, and stagnant wages, Millennials in particular do not feel financially secure enough to take care of children.
These underlying factors have made it very difficult for young people to afford to raise children like older Generations did. Instead of brushing to start a family, young people are instead focusing on their finances and enjoying their married life first.
Financial Tips for DINKS
A big Advantage of being DINKS in a relationship is that they are few distractions that prevent you from building a very strong relationship.
When a couple is on the same page financially, they can build good financial habits together and work towards reaching Financial Independence.
This is a crucial time, especially for young DINKS, to build that trust and those financial habits early on. You’re awesome fantastic Financial tips for DINKS:
1. Pay off your debt
The single most crucial aspect of being a DINK is having the financial capacity to pay off debt. When you don’t after financial responsibility of taking care of offspring, you have a great ability to pay off debt.
As DINKS, you owe it to yourself to prioritize paying off debt before having any kids (if you ever do). Most people don’t have the luxury of having extra money at the end of the month to put extra towards debt. But DINKS do.
It is important to take advantage of this time and eliminate all your debts so you can focus on the rest of your goals and reach Financial Independence. Trust me, you will thank me later.
2. Talk about money
Talking about money has always seems like a taboo topic. Talking about money brings out all kinds of emotions from people, usually negative. However, the earlier you talk about money the better your relationship will be.
As DINKS, do you have the time of day and mental capacity to address this money topic. Most adults that have kids sometimes say that they feel too tired to talk about money or are too busy to discuss it. However, you my DINKS don’t have that excuse 🙂
When and if you eventually have kids, it is so much better for yourselves and your family that you already have a good Financial Foundation when it comes to talking about money.
Developing good money habits early on keep you both motivated and focused on your financial goals. Happy and successful couples talk about money!
3. Have a budget
Whether you’re a DINK or not, having a budget is absolutely critical when it comes to you each and financial success. This is especially true when you are a DINK.
When you don’t have any children, it’s easy to justify unnecessary expenses. This is because don’t have that financial responsibility to take care of kids. That’s just a recipe for disaster.
A couple that is always broke and in debt is isn’t any different from a couple that is always broke and in debt and as kids. It’s very tempting to go out, eat, and travel all the time just because you don’t have kids to take care of.
It is absolutely vital that to you have a budget and stick to it.
4. Take care of your taxes
DINKS usually have a higher tax liability because they do not have child care tax credit or child care deductions. Fully understand the effect of not having children on your taxes, make sure you consult a tax expert.
When filing a W-9 and tax returns, it’s important that you found them properly and utilities any tax deduction available to you.
Since you do not have any direct childcare costs, you might have more disposable income to use towards charitable contributions. These contributions can be used towards your tax deductions.
You can also max out your pre-retirement accounts such as the law of Ira and 401k that’s might reduce your tax burden. You can also use HSA and flexible spending accounts. Always remember to consolidate tax expert when making these decisions.
5. Conduct estate planning
If you are a DINK and you have no intention of having children in the future, there’s something you should probably think about it is who you will pass down your assets to.
As much as nobody likes talking about death, it is an inevitable part of our existence. Because of this, it’s just as important to plan for it’s like anything else.
For example, you might leave your assets to siblings, friends, extended families, etc. Of course this is completely up to you, but since you do not have any heirs, your estate planning will be a little more deliberate.
It is also probably a good idea to have a will drafted up and notarized. You probably also wants to have a living will that details you Medical Care if it ever comes to that.
You also probably need to assign a power of attorney that gives that person the authority to manage your financial affairs if you are ever incapacitated or deceased. Yikes, that wasn’t a fun sentence to write!
When you are making these decisions, make sure you consult a financial expert and a tax professional that may presents the different options to you.
6. Get good insurance
A big misconception that many double income couples have is that, since they do not have any children, they think they do not need any insurance. That is simply not the case.
Since, on average, DINKS spend more on larger houses and nicer cars, they are very dependent on each other to afford their lifestyle. What if something happens to one of them?
The thing about insurances that when you actually do need it, you really need it! So instead of thinking that bad things will never happen, it’s always better to be prepared.
7. Set your goals together
As the hands of time Move Along, it is absolutely critical that both of you set your life and financial goals together.
Most people live day today without having any plans for the future. Living in the moment is fun on occasion, but if you really have no direction in your life, you’re going to wind up lost.
As DINKS, You have the ability to save, explore, and take calculated Financial risks that can benefit you a lot in your future.
Whatever goals and plans you decide, it’s important that you decide them together and that you have some sort of plan. Having it carefully documented and we visited time and time again I will keep both of you accountable and help you reach your goals! How awesome would that be? 🙂
Last but not least, you should invest for your future!
DINKS Are often noted as couples that indulging very lavish Lifestyles and are impulsive consumers. “DINKs are often the target of marketing efforts for luxury items such as expensive cars and vacations.”
Because of this, investing is usually the last thing on a DINK’s mind. It shouldn’t be that way.
By carefully managing the dual-income, you can invest some of your money towards your retirement and nest-egg. So many people neglect the fact that at some point we all need to retire. But what will you retire on if you are not investing or saving any of your income?
My personal goal is to retire from our real estate Investments, my passive online businesses, and of course retirement accounts. Being DINKS Offers you the opportunity to Sock away more of your disposable income towards Investments. You just have to be willing!
Pros and Cons of a DINK Lifestyle
It is not all sunshine and roses when it comes to the DINK lifestyle. Sure, like any other path in life come out always pros and cons depending on how you execute it.
When done right, being a DINK can be incredibly financially rewarding. However, when done wrong, it’s can just be as financially devastating.
The Pros of a DINK Lifestyle:
- Having disposable income to spend on fun things and toys
- Ability to save more money without the financial responsibility of kids
- An opportunity to live in a small home since space won’t be much of an issue
- More free time to do leisurely activities and travel
- Having the mental capacity to build on your relationship and financial goals
The Cons of a DINK Lifestyle:
- Risks of overspending and justifying unnecessary expenses
- Having the “I’ll invest later” attitude
- DINKS don’t get tax breaks associated with having children
- No heirs to pass down assets and wealth (if they never have children)
Like any other lifestyle choice, the DINK lifestyle has its advantages and disadvantages. The reason most young people are opting what this lifestyle is to work on their finances early on in their lives.
Middle-income parents can expect to spend $233,610 ($284,570 if projected inflation costs are factored in) for food, shelter, and other necessities to raise a child through age 17. This does not include the cost of a college education.
It is no surprise then that most millennials are taking much longer to start a family when they are riddled with student loan debt and an unfavorable market. Nevertheless, the DINK lifestyle works for some and not for others, and that’s okay!
At the end of the day, make sure you do what is right for both of you and one makes you happy. After all, starting and raising a family isn’t just about numbers 🙂
Let me know what you think about the DINK Lifestyle below. Are you a DINK, or do you know someone who is? Comment below!