Money is a big issue when you are trying to have kids (especially when it’s through surrogacy) and – of course – raising a child ain’t cheap. We brought in celebrity financial planner, David Rae, to discuss saving and planning financially for your next big thing, and other financial planning issues that may occur for gay men.

David Rae, a certified financial planner and a regular advisor on KTLA5 morning show, says financial planning is crucial for gay men who are thinking about having kids. “It’s definitely something you want to address before you start the process,” he explained on Daddy Squared: The Gay Dads Podcast. “You want to know it’s going to cost, say, $200k. You want to make sure that you put your financial house in order so you’re not putting this on a credit card, not mortgaging your future.” 

“When I say planning ahead, look at ways to save for this expense,” Rae continued. “If you must, look at ways that you can possibly get a loan or take loans against your 401(k) which normally financial advisors wouldn’t want you to be doing. I wouldn’t suggest doing that to buy a car but to start a family, we are probably starting a family later in life than our [straight] siblings.”

David, a gay man himself, specializes in the needs of the LGBT community and often blogs on his website about financial issues that come up in the community, looking at our lifestyle and how it can be adjusted so what we spend money on is what we think we really need – and not spend money according to expectations from our surroundings. About having kids, David advises to take time to save. The best thing to do, he says, is start an investment account and start putting away money every month and let that build up. If you go for loans consider where you have assets.

“There are a lot of sources out there for terrible loans: ‘Oh sure I’ll just give you $200,000 at 30% and you’ll be in debt forever!’,” David says. “There are approaches for staggering different types of loan in time as well. The IVF agencies themselves sometimes have their own loan packages but their terms may not be the best. You might want to look at home equity loan of you own a home. You can even take a loan against your 401(k) if you must. And with all of that, be careful of the debt you’ll be taking on. You don’t want to be buying diapers for twins and drowning in existing debt.”

“The interest rate is a big piece to consider, too. If you have a 5-year loan vs. a 10-year loan vs. a 20-year loan, you might pay a lot more interest on a 20-year loan and sometimes you think if you have a 20-year loan, you’ll have to pay all this interest. If you are stretching to make this happen or you are already struggling financially a little bit or on edge – it will make it more affordable and you can pay the loan up faster if you get a 20-year loan, but a 5-year you’ll be like, ‘oh my gosh, I have to come up with $200,000 in five years, that adds some extra stress”

Our Guest: David Rae, CFP

David Rae, Certified Financial Planner™, Accredited Investment Fiduciary™, and President / Founder of DRM Wealth Management LLC, helping you make smarter financial decisions and positioning yourself for prosperity.

Working with a wide diversity of clients for well over a decade, he has built a successful career developing comprehensive financial plans to meet life goals, retirement, tax planning, estate issues, portfolio revision, life insurance, portfolio management, business exit strategies, and more. While based in Los Angeles, he serves clients across the country. At the same time, he enjoys a solid reputation as a smart, go-to financial guy for both mainstream and LGBT print, broadcast, and online media.

Guest Host: Daniel Vandenbark

Daniel is a single dad, co-parenting with his former partner to raise their son, Torbett, who came to them through open-adoption. Daniel founded his design firm over twenty years ago, designing custom interiors and waterwise landsca...