Falling Fertility Rates call for a Mindset Change: Impact on Financial Planning in NZ.
In a world increasingly shaped by demographic shifts, the global decline in fertility is more than a statistical trend—it’s a mirror reflecting our evolving values, economic structures, and social contracts. Nobel Laureate Claudia Goldin's research in Downside of Fertility offers a compelling narrative that challenges conventional thinking and urges us to reconsider what progress truly means.
As a Financial Planner, the research findings provoked me to think about how I can guide couples aspiring to start a life together and create a family.
Top Tips for Financial Planning for Parents.
1. Recognise the Cost of Delay
• Women increasingly delay childbearing to pursue education and careers, which can lead to higher costs for fertility treatments and childcare later in life [1].
Financial Planning Tip: Include a timeline for family planning in your financial goals. Consider saving early for potential fertility support (e.g., IVF, egg freezing) and childcare services.
2. Account for Career Trade-offs
• The research highlights the “child penalty” for women in high-paying careers when male partners do not share caregiving responsibilities [1].
Financial Planning Tip: Discuss and model dual-career scenarios. Plan for income fluctuations if one partner reduces work hours or takes parental leave. Consider income protection insurance and flexible work arrangements.
3. Invest in Shared Responsibility
• Fertility rates are higher in societies where men contribute more to household and childcare duties [1].
Financial Planning Tip: Budget for outsourced support (e.g., nannies, cleaners) if equitable division of labour is difficult. This can reduce stress and support both partners’ careers.
4. Build a Safety Net for Relationship Stability
• Fertility decisions are influenced by the perceived reliability of the partner and societal support systems [1].
Financial Planning Tip: Establish joint financial goals, emergency savings, and legal agreements (e.g., wills, guardianship plans) to ensure security for both partners and future children.
5. Prepare for Intensive Parenting Norms
Education costs in New Zealand
• In some cultures, raising children is seen as a competitive investment (e.g., tutoring, private schooling), which discourages lower-income families from having children [1].
Financial Planning Tip: Define your values around parenting. Create a realistic education and enrichment budget that aligns with your lifestyle and avoids unnecessary financial pressure.
6. Consider Policy and Social Support
• Countries with strong parental leave and childcare policies show better fertility outcomes [1].
Financial Planning Tip: Research and utilise available government benefits, tax credits, and subsidies for families. Factor these into your long-term financial projections.
Mindset Shift for Financial Planning in NZ
“Men are not inherently more traditional than women. Rather, they benefit more from patriarchal traditions. Women, however, experience greater gains from more equal gender roles. Women, according to the framework, are agents of change.”
To raise a family in today’s world, couples must move beyond traditional assumptions and embrace:
Flexibility: Careers and parenting paths are no longer linear. Financial plans should adapt to changing roles and opportunities.
Equity: Shared responsibility in both income generation and caregiving leads to healthier relationships and more sustainable family life.
Empowerment: Respect each partner’s autonomy and aspirations. Financial planning should support—not constrain—personal growth and mutual trust.
Reach out for a chat
Please feel free to reach out if you would like to discuss this article or have a conversation about personalised financial planning tailored to your unique circumstances.
At Athena Wealth, we provide independent, personalised, comprehensive financial planning for individuals, couples and families.
References: [1] https://www.kansascityfed.org/documents/11192/Downside_of_Fertility.pdf