Millennial couple with $64,000 of student debt can't afford kids, saying a $125,000 salary 'doesn’t feel like enough'

“When I think of starting a family, I have hesitation to even wanting to do that,” Kelly says. Blame all their student-loan debt. “Starting to save for your kids’ student loans while still paying your own off, that’s something I don’t want to do.”

Kelly, who is 29 and asked to go by only her first name for privacy reasons, is the breadwinner, earning $125,000 (with the possibility of a 10% annual bonus), but that’s a new development. The most she ever brought home before her new job was around $62,000 per year. The thousands they are saving each month are also a new development—like many other six-figure households, Kelly and her husband haven’t built much of a financial cushion.

“I’m kind of playing catch-up,” Kelly tells Fortune. “I should have been saving for 10 years and I wasn’t.”

And then there’s student loans hanging over their heads. Their combined $64,000 worth of school debt is a major source of stress. For the past few years, they’ve been paying $400 each month rather than the typical $800, thanks to the federal Covid-19 payment and interest moratorium. That’s been instrumental to their “catch-up” savings contributions, but when the payment pause ends at the end of August, things will change.

Their finances feel tight enough as is that Kelly says she can’t imagine adding in additional costs, especially not childcare to the tune of hundreds or even thousands each month. And given that Kelly earns 75% of the couple’s $166,000 joint income, she would not be able to leave the workforce, as women in heterosexual relationships still tend to do, to take care of their children. They find themselves in a sort of financial bind.

“Even though I make six figures, I still feel like I can’t get ahead,” she says. “Compared to past generations, $125,000 doesn’t feel like enough anymore.”

Student loan payments add to mounting financial pressure

Kelly is far from alone in feeling like she’s stuck between a financial rock and a hard place. She and her husband are on their way to being HENRYs—high earners, not rich yet—and the $166,000 they earn puts them well above the median U.S. household income, but things are tough for even these high earners as the cost of living grows higher and higher. Around 34% of households making at least $100,000 per year are living paycheck to paycheck, a recent survey found.

Were President Joe Biden’s widespread student loan forgiveness plan to survive its time at the U.S. Supreme Court, the couple’s debt burden would be almost halved, Kelly says, making it a much more manageable sum that might allow the couple to consider expanding their family. But they’re not counting on the relief, given the conservative bent of the court.

Debt cancelation is anything but a sure thing, and Kelly is pragmatic when it comes to her financial position. Plenty of people in tougher financial spots have children and make it work, but Kelly can only focus on her own financial oxygen mask at the moment by building up her retirement savings—and still, she feels nowhere near where she “should” be, given her age—and putting away some money for the couple’s next home.

They currently live in an 800-square-foot, two-bedroom home. But with interest rates and prices as high as they are now—comparable homes are $100,000 more expensive than they were when the couple bought their current home—Kelly says even in a place with a lower cost-of-living, they just can’t afford a new home big enough for a growing family.

There are trade-offs. She can’t make the math work on funding her retirement, paying off her debt, saving for a home, and affording children.

“Saving for retirement seems trivial when student loans loom over our heads. And starting a family seems impossible with the cost of childcare on the rise,” she says. “I recognize that I’m extremely privileged, but I still feel mounting pressure when it comes to our finances.”