My wife Katie and I have come a long way in the almost 11 years that we’ve been married now and we’re just getting started. Now, we have a full family with 3 kids, a dog, and a mortgage. 

The journey that we’re on is a challenging one, especially getting my 3 year old in her jammies and getting her to stay in bed, but I’m also keenly aware of how precious these times are.

Putting our kids close together in age was something that we’ve done on purpose, but it does create some trials along the way. And one way where that’s showing up is in our finances.

Recently, I’ve been thinking about the concept of choke points for your money throughout your life.

A choke point is a place in your life where your finances are put under great demand when compared to other parts of your life. It’s a bottle kneck. It’s a tight spot and you have to get smart about ways to get through it. 

We’ve definitely hit a choke point recently. With a mortgage and three kids in daycare, things are much tighter than they’ve ever been. It’s caused us to need to be way smarter, way more conservative, and we’re needing to plan better than we’ve ever had to since we’ve been married. 

It’s crazy to think of the money that we could waste when we were first getting started. 

Now, every single dollar has to be way more intentional. 

However, it will pass. 

We’re just needing to hang on with three kids in daycare for a few months. After May, our oldest will leave preschool as he prepares to go into public kindergarten next year. Then, in a few years, all of our kids will be out of daycare and we’ll have passed that point in our lives. 

In a few years after that, we will finish up paying for our 15 year mortgage on our house. 

We’ll have passed this choke point. 

But we know that others exist.

Watching out for Choke Points

If you don’t have a home mortgage or you haven’t had kids yet, you’ll want to watch out for those days when things could get tight. 

You’ll want to watch out for that on the horizon. You’ll want to know that it’s coming. 

There are lots of other places where choke points can exist. 

• When your kids go through college.
• When your kids are getting married.
• When your kids start needing vehicles.

Now you could look at the above list and notice the thing that’s in common with all of them. Plus, look at the choke point that we’re currently in. 

Maybe it’d be better to just not have kids?

It’s true that having kids is going to significantly raise the price tag, no doubt. 

But remember, life is not about making money so that you can get a lot of it and hang on to it. Your personal finances are the vehicle in which you can build a life that you love living. Your personal finances work for you, not the other way around. 

But to be smart with our money, we’ve got to look for those places where it gets hard. 

What helps you get through a Choke Point?

There’s a good chance that your financial situation will change and you’ll experience a choke point. But how can we weather these spots a little better and keep our financial standing strong?

The best way to get through a choke point is cash and to keep your margin as big as possible, whether that’s by building up your income or cutting expenses.

The more cash you have on hand and the less you can owe the better. Cash gives you options. It allows you to stick with the things that matter to you and to do things on your terms. 

If you have payments on two vehicles, then you probably pay $1,000 a month in car payments. But if you can pay cash for cars, especially when you know things may be tight for a few years, it frees up hundreds or even over a thousand dollars worth of income each month. 

Saving ahead of college and weddings are a good way to smooth out future hoke points as well. 

Of course, choke points created by kids are probably what’s on my mind most these days. But there could be any number of choke points created by other life events. 

Can you think of any others?