His Spreadsheet Says "No More Kids"

Scott

My partner and I have started talking about having a second child. He's convinced we can't afford to raise two kids in Australia to the age of 18. He even built a spreadsheet to prove it! Everyone I talk to says "you just make it work", but this is not enough to get my partner over the line. He earns $90,000, and I'm currently working part time in retail while studying. We have a mortgage and are very careful with our spending, yet we're still struggling to save with the current cost of living.

What I can't wrap my head around is that so many families in tougher financial situations than ours seem to have multiple kids and make it work somehow. Is my partner right to make this decision with his head rather than his heart? It feels so wrong – and, honestly, heartbreaking – to think money might be the deciding factor.

Ella

Hey Ella,

That family with more kids than you?  

They didn't consult a spreadsheet. They don't budget either.   

Heck, he probably proposed to her because he thought she looked hot in jeans.   
Thinking time over. Case closed. Bam!

Look, I wish more parents would do a spreadsheet. It's refreshing. I'd certainly do one for buying a car and definitely for buying a house. But for having a kid?   

Nah.  

There ain't an Excel formula that can show kids are a good payoff.  

I have four. Financially, they don't stack up.  

However, you make it work. Public schools. Hand-me-downs. Government payments for each kid.

Plus, the spreadsheet he's built is likely only a snapshot in time: fact is you'll earn more as you finish your study, and once the kids go to school you'll have more capacity to work.

My view?

Your partner is a careful guy who takes his role as a parent and a provider seriously. You're writing to the Barefoot Investor about procreation. You guys are more aligned than you think.

So let me give you the ultimate formula:

The only kids you regret are the ones you don't have.

We're Facing Bankruptcy

Scott,

My husband and I followed all the Barefoot steps. We saved $40,000 and got into Sydney's property market in early 2024 using the 5% deposit scheme. Not long after settling, we discovered why the apartment seemed affordable. There were serious waterproofing issues, and our strata fees jumped from $1,500 to $2,500 per quarter. Worse, from the first night we realised we were in a terrible neighbourhood. The noise was constant. When we tried to talk to neighbours, we got late-night knocks and harassment. Our young children were terrified. After 1.5 years we couldn't take it anymore. We rented elsewhere and listed our apartment. Five weeks later, no interest. We're paying both rent and the investment loan. Our agent wants us to drop the rent per week $150 below market. If we sell, we'll break even but be locked out as Sydney prices soar. If we hold on, we risk bankruptcy.  What would you do?

Sally and Rod

Hello,

In which Barefoot Step does it say to take out a loan with a 5% deposit?

You didn't follow Barefoot, you followed Albo and his dud policy:

"Only Labor will help you buy a home right now!"

And you did!

So, what should you do now?

Stop listening to politicians who are poking your FOMO for votes would be one idea.

Another would be to take responsibility for your own decisions.

Let me hold up a mirror:

You rushed into buying it. Now you're rushing to sell it. See the pattern?

Here's my hunch: I think the two of you know what you need to do. So, book a Barefoot Date Night for this coming week and get a realistic gameplan on where to go from here.

That's Barefoot Step 1.

My Son is a Disaster

Scott,

My adult son is a financial disaster. He owes money to lenders I’ve never even heard of – Credit24, Fair Go, Pepper – and over the years I’ve paid off loans that weren’t mine just to keep him afloat. Now some ‘consultant’ has told him to borrow from family to pay off his debts and start again. But I’ve heard that line before. For eight years, I’ve been his safety net. I’m emotionally exhausted, financially drained, and now he’s asking me to take out a loan in my name. I’m in my 60s. I can’t keep doing this. Please – how do I help him without sacrificing myself?

Helen

Helen,

You’re not going to like my response.

Heck, I don’t even like my response, but I’m going to give it to you anyway:

Helen, you are failing as a mum.

By continually bailing him out for the past eight years you’ve robbed him of the chance to grow up.

Worse, you’ve put your own financial future in jeopardy doing it!

My advice?

Tell him the Bank of Mum is officially closed. No loans. No co-signing. No exceptions.

“No” is a complete sentence.

If you keep rescuing him, he’ll end up being a 50-year-old flailing around with his financial floaties on, waiting for his mummy to rescue him from the shallow end of life.

Suggest that he call a free financial counsellor via the National Debt Helpline (1800 007 007), and that they’ll help him sort out his mess.

You’re a kind woman, and a loving mum. But right now, Helen, you’re killing him with kindness.

Scott

Help! I’m Terrified I’m Going to Lose My Home

Hi Scott,

I've been following you for years, but right now I’ve hit a wall. I bought my first home in August 2024, but by December I was already in financial hardship – and I’ve been stuck there ever since. I left a well-paying job (long story) and ended up unemployed for four months. Now I’ve found work, but it’s a long commute and I’m only earning $1,400 a fortnight … while my mortgage is $1,200 a fortnight. There’s not much left over – financially or emotionally. I’m terrified I’m going to lose my home, and I don’t know what to do.

Maura

Hi Maura
 
Wait, you’re living off $200 a fortnight?

That’s not financial hardship, that’s a Centrelink-sponsored episode of Survivor.

Look, unless you can magic up a better-paying job fast, you need to seriously consider selling your home.

That’s where you are at right now. It doesn’t have to be forever. Maybe one day you’ll buy another home, on your terms, with a story that starts:

“Back in 2024, I bought a house I couldn’t afford ... and that’s when everything changed.”

Right now, though, you need backup.

Call the National Debt Helpline on 1800 007 007.  You’ll be connected to a free financial counsellor – someone like me. They’ll help you talk to your bank’s hardship team and explore your options.

So here’s your reframe Maura: 

Selling your home before the bank forces your hand puts you in control. 

Maura, if you do this you will not be ‘losing’ your home. You will be selling it on your terms to secure your financial future. And it might just be the smartest financial decision you ever make.

The Stress Test

If you’re stressed about your money right now, you’re not alone.

Australians’ mental health is actually in worse shape now than during the Covid lockdowns, according to a new study by KPMG and Smiling Mind.

Our biggest source of stress?

The rising costs of practically everything … especially interest rates.

Here’s the thing: when it comes to our mental health, Australians are good at asking for help. We are, after all, the second largest users of antidepressants in the world.

Yet when it comes to dealing with money stress?

Not so much.

But ignoring things won’t make it any better … nor will doom-scrolling. The only thing that’s guaranteed to get you back in control is for you to take action.

So let me give you three action items you can do right now.

The first action item is to pick up your phone, google MoneySmart’s ‘Mortgage Calculator’ and see what your repayments would be if interest rates went up another 2%.

(Hang on, why 2%? Because the bulk of the senior bank economists predict rates will rise 1.5% over the next 12 months. Having said that, these are the same guys who all once famously lost a financial forecasting contest with my golden retriever … so let’s be conservative.)

Write down what your monthly repayment would be, and then …

… act as if it’s this figure already.

Get into a bit of role-play for the evening:

What would you have to do to meet your repayments?

Then check your home loan. Here are some numbers: the average variable rate is 4.55% … or 5.10% if you’re with one of the big banks (but why would you be?). If you have more than 20% equity in your home, you should call up your bank and bitch (rather than go through the hassle of switching). A good variable rate to demand is 3.5%. Do that and you’re three-quarters of the way there.

The second action item is to review your spending.

Disclaimer: I’ve never stuck to a budget in my life, so I’m afraid I can’t help you with a rigid spreadsheet. Instead, I’d suggest that you review your Barefoot Buckets and spend consciously … which means be lavish on things you love and use a lot (hello Dunlopillo) and vicious with anything you don’t (goodbye Netflix).

The third and final action item – regardless of whether or not you have a home loan – is to get a payrise. Yes, I know the thought of asking for more money probably makes you feel a little queasy, but this is a total non-negotiable. Besides, everyone else is doing it. With inflation burning through 7% of your wallet this year, you need to get at least that much of a payrise, or you’ll be going backwards.

So there you have it: three practical, positive and empowering action items that you can do right now to take back control of your money. Let me know how you go!

Tread Your Own Path!