Author Topic: Case Study - Balancing FIRE and starting a family  (Read 1532 times)

YoungGranny

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Case Study - Balancing FIRE and starting a family
« on: May 31, 2019, 09:14:31 AM »

Overview

I've been on the forum for quite a few years and I think my spending is pretty reasonable. However, my DH (32) and I (28) are facing some changes on the horizon including: recent move to Chicago, potentially starting a family, and being a few years away from FIRE. We're struggling to decide if we should just put our heads down and hit our FIRE goal or if we should relax, start a family and have one of us keep working a bit longer. I recently switched back to my old job with an awesome manager, awesome hours and it's allowing me to work remotely. So pretty flexible, low-stress, and I do enjoy the work. Husband would very likely leave his job to take care of the baby since he's in a higher stress consulting role.

Debts
220k 15-yr mortgage @ 3.5% (primary condo)
99k 30-yr mortgage @ 4.25% (rental)

Assets
$440k - 401(k)/IRA retirement accounts
$195k - Vanguard Account
$8k - HSA Account
$10k - Savings Account
$285k - Condo
$140k - Duplex
2007 Civic: Priceless ;) I think it's actually only worth a few grand but only has ~115k miles so we'll be driving it for a while still.


Gross Salary/Wages:

110k (me) + annual bonus
110k (spouse) + annual bonus
20k  - rental income

Pre-tax deductions:
Both max our 401ks (40k annually)
Max HSA (7k annually)
Healthcare - $80 a month
Commuter Pass for my Husband: $102

Current expenses:
PITI on Primary: $1965 
PITI on Duplex: $925
Car Insurance: $50
Google FI Cell: $30 - husbands is covered by corporate plan
Utilities (G,E,W, Internet, +HOA): $400 - HOA fee ($350) includes all but electric bill.
Food: $460 - Includes groceries and going out to eat + food for our dog. Could cut this but we re-instated date nights this year and enjoy not stressing about grabbing dinner out a couple times a month.
Gas: $30 - typically a tank a month or less.
Public Transportation: $50 - estimated my share since husband has monthly pass
Donations: $100
Travel: $200 - set aside money for bigger trips, we love to travel but cut costs by travel hacking.
Shopping: $50 - when we need to update clothes, shoes, yarn for my crafting habit, etc
Other: $100 - about the average over the last year of random one-off purchases, car repair cost, etc


Overall, I think our expenses are pretty good but welcome any optimization techniques the hive mind may offer. Mostly I'm curious to hear opinions on if we were to start a family now versus waiting to FIRE. I think we'd be able to FIRE in 2021 on our current path. If we have a baby next year then I'd likely need to keep working for ~4 years after they are born while my husband became a SAHP.  While I'm currently 28, fertility problems are common in my family so there's also a strong chance we could start trying now and it would take a couple years for us to have a baby. I guess it feels challenging right now because we have two goals on the horizon and we're trying to decide which one should be accomplished first. Would it be better if I was FIRE'd before having a baby to have more time with them? Or since I enjoy my job is it i better to have a baby and they'll be just fine if I have to work 40 hours a week.

ysette9

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Re: Case Study - Balancing FIRE and starting a family
« Reply #1 on: May 31, 2019, 09:48:53 AM »
As someone who has experienced two second trimester losses and difficulty getting pregnant, I recommend you move your baby-making plans up if that is important to you. As flippant as this sounds, you can always get more money, but you will never get your youth or fertility back once gone. Or at least not without considerable expense and trouble.

LifeHappens

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Re: Case Study - Balancing FIRE and starting a family
« Reply #2 on: May 31, 2019, 09:52:48 AM »
Hey, YoungGranny. I hope life in Chicago is going well.

The only thing in your list of assests/expenses that stands out is the duplex. I'm not a real estate person, so I'll just remind you to evaluate it based on ROI metrics. If it doesn't measure up, selling it would give you some extra cash to invest. Otherwise your expenses look really well optimized for your current situation.

While I'm currently 28, fertility problems are common in my family so there's also a strong chance we could start trying now and it would take a couple years for us to have a baby.
There are several members of this forum who have struggled with fertility. I'm sure a couple of them will make their way to this case study. I would just urge you to find an OBGYN if you haven't yet and get your fertility markers tested. If there is any possibility of difficulty conceiving you may be on a short timeline. I'll leave the emotional aspect to others, but financially speaking it will yield a high ROI to conceive naturally soon rather than waiting a while and possibly needing medical intervention that likely isn't covered by your health insurance.

YoungGranny

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Re: Case Study - Balancing FIRE and starting a family
« Reply #3 on: May 31, 2019, 10:11:29 AM »
@ysette9 - I'm so sorry you experienced losses. Your thoughts are exactly why we are discussing bumping up our plans for a baby, realizing how quickly life goes and making an effort to focus on what's important. Money can always be made later.

@LifeHappens  - Thanks, life is going well! I analyze our duplex every year so we feel comfortable holding onto that one for now since in 2018 we saw a 12% ROI.
Great tip on heading to an OBGYN, I actually have an appointment next week to get the ball rolling. Also thanks for noting the financial impact between conceiving naturally versus medical intervention, not something I really thought about.




MoneyizHere

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Re: Case Study - Balancing FIRE and starting a family
« Reply #4 on: May 31, 2019, 01:16:07 PM »
hey there - great job on the savings.
Having babies - definitely have them asap - do not wait.  Babies are not a financial number like retirement- as people earning $40k a year in a household figure it out.  It may take a while - definitely want have kids when you have the energy while you're still young.   

Expenses - only a few items
Car Insurance - - might be able to optimize here (I think Civic insurance is typically higher because of parts/people wanting to steal them).  But look to see if you could go with a different outfit/consider going liability only since you're just light drivers anyway. 

Food/groceries - Chicago is unique for groceries has many options for groceries and ethnic shops are way cheaper than the standard places. 

You have a good plan to down-shift one job to two with some awesome savings to rely on.

Look into your 401ks to see if you could do Mega-Back-Door roth. 

Other than that - you're doing splendid job. 

AMandM

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Re: Case Study - Balancing FIRE and starting a family
« Reply #5 on: May 31, 2019, 02:06:11 PM »
Another vote for making babies before money.

There are fertility issues in my family, too, and several people were greatly helped by NaPro treatment. They have you start charting your cycle right away to help diagnose & treat potential problems pre-conception--e.g. progesterone supplements to prevent early miscarriage.  Good luck!

Cassie

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Re: Case Study - Balancing FIRE and starting a family
« Reply #6 on: May 31, 2019, 02:19:09 PM »
You guys are doing great. I agree with others that babies come first. Some of the infertility problems on this forum are heartbreaking.

MrThatsDifferent

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Re: Case Study - Balancing FIRE and starting a family
« Reply #7 on: May 31, 2019, 03:20:48 PM »
I second both of you seeing a fertility specialist and getting advice and everything checked out. Youíre very young, no need to panic and 2021 is around the corner. In your shoes Iíd definitely do FI first then kids. Youíll both be able to spend quality time while they are young. If fertility is any issues, you can freeze your eggs now as a precaution.

mistymoney

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Re: Case Study - Balancing FIRE and starting a family
« Reply #8 on: June 01, 2019, 09:56:49 AM »
I second both of you seeing a fertility specialist and getting advice and everything checked out. Youíre very young, no need to panic and 2021 is around the corner. In your shoes Iíd definitely do FI first then kids. Youíll both be able to spend quality time while they are young. If fertility is any issues, you can freeze your eggs now as a precaution.

2021 is 18 months away.....there are 9 months in the oven, and if it's quick - maybe 2-3 months to get it in the over.

so - starting now might just speed things up by 6 months at the most.

If it takes 2 years to conceive, then they would have needed to start more than a year ago.....

They could start now, and if it happens really fast - drop to one income for a few years. If it takes a year or two, they are on track.


stepingum

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Re: Case Study - Balancing FIRE and starting a family
« Reply #9 on: June 02, 2019, 09:24:34 PM »
Just a quick thought your about the SAHD plans. I (wife) am the high earner in the family so when I went back to work after having our first child, my husband cut his hours to 15/per week (working remotely and flexible schedule) and stayed home with our baby. It was HORRIBLE for all of us. Our baby was healthy but extremely high needs and he basically screamed for the entire 10 hours I was gone everyday, and then nursed at least every hour all night long. We had not gotten on any wait-lists for daycares (everything is more than a year out in our area) and couldn't afford a nanny because my husband was barely working. We all suffered on like that for 18 months until my husband had a major breakdown. I ended up quitting my job and we moved to Russia where the 15 hours a week my husband is working can support us. We plan to stay here until the boy can start school and hopefully I can get the job back that I loved.

Obviously horror stories like ours don't happen everyday, but I wish someone had warned us before we got locked into what seemed like a great idea. Consider yourself warned. Russia is awesome, by the way, but the boy STILL (and probably always will) challenges our mental health every single day and my husband has PTSD from the trauma. Those were the darkest days of my life; knowing that the two people I loved most were miserable and there wasn't anything I could do about it.

Sanitary Engineer

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Re: Case Study - Balancing FIRE and starting a family
« Reply #10 on: June 06, 2019, 11:31:29 AM »
Mistymoney's timeline makes a lot of sense to me.  If you get pregnant immediately then you'll be half way to your FI goal by the time you need to take maternity leave.  Shortening your one-income-after-baby time frame.
I don't know what your company's or your state's parental leave policies are, but you should be able to extend the post baby time off by 3-6 months by taking unpaid leave or working a reduced schedule to evaluate stepingum's warning about STAHP options without either of your losing your position. (I am in VT where 12 weeks parental leave is a state law).

Cassie

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Re: Case Study - Balancing FIRE and starting a family
« Reply #11 on: June 06, 2019, 11:40:03 AM »
Step, what daycare would have kept a baby that cried for 10 hours straight?   I have known people with colicky babies where they barely slept the first year and no one had PTSD.  It sounds like something else was going on here.  I would have been taking the baby to the doctor and trying other things like formula to satisfy him.

ericrugiero

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Re: Case Study - Balancing FIRE and starting a family
« Reply #12 on: June 06, 2019, 11:54:30 AM »
If having a baby is a high priority I'd suggest you start trying sooner rather than later.  Odd are better if you start sooner plus you could possibly avoid expensive medical procedures to get pregnant.  Also, do you just want to have one kid or are you thinking more?  If you want more than one then that takes additional time. 

You are in a good situation to coast FI if that's what you want.  You could work, your husband could work, one or both of you could work part time, etc. 

LightTripper

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Re: Case Study - Balancing FIRE and starting a family
« Reply #13 on: June 10, 2019, 09:39:31 AM »
I'm significantly older and with kids already but one thing that jumped out was your comment on your husband's career.  I'm a consultant and it is pretty exhausting.  I find combining it with family life difficult and I'm planning to take a step massively back (or off!) next year when my son starts pre-school.  One thing that's struck me as I've got older is that while it is not easy to do consulting part time, there are sometimes ways - particularly if you are in your 30s or older with a bit of a network and track record behind you.

For example:
- I have a friend who was a consultant but took about 7 years not doing paid work after having her kids.  Because she didn't need to work (and kept saying "no") she managed to accidentally negotiate a 3 day a week, only 1 of which was in the office, term time only contract.
- A FoF works for one of the Big 4 accountants (but in consultancy rather than accounting) and works 3 days a week term times only: "behind the scenes" (rather than client facing) but still at a senior level.
- Another friend got very into gym instruction and fed up with his Big 4 consulting job.  Because he had the power to walk away he now does a mix of gym teaching, freelance work for his old employer (but without all the corporate b/s he used to have to deal with there), and some smaller projects that he does independently as a freelance with start ups (which is his top favourite thing).  He doesn't have kids: just wanted a more fulfilling life and could afford to take a massive pay cut to do what he actually wants to do because he had always been frugal, got paid to go to the gym, paid of his mortgage early, etc. etc.
- A former colleague moved back to her home country when she had kids, but still does work for us on an ad hoc basis when we are super-busy (but only if she has time - so generally in term time - and when we are super-busy). 

This is the amazing thing about being nearly FI even if you aren't fully FI: having the flexibility to be able to take the kind of work that won't pay regular bills but will contribute towards your retirement accounts or help pay for one-offs or holidays is actually incredibly valuable to lots of employers.  If you have the right network there are opportunities out there.

Obviously I'm not saying your partner would be able to juggle one of these with a tiny baby, but once baby is a bit older and could go into part time nursery etc. then your partner may well find that if he maintains his network there are opportunities to do bits of top up consulting/freelancing or one-off projects that would help you to FI if you aren't fully there yet.  It's one of the big advantages I've noticed to my friends who've had kids later rather than earlier, that they already have this network and so can find these opportunities (which are never advertised!) more easily.  Obviously there are lots of advantages to having kids early too, but I think by mid 30s chances are your partner will have a pretty good network and if he keeps the lines of communication open then opportunities to e.g. help out when his old employer are completely under water on an "ad hoc" basis may well be around.  So it doesn't necessarily have to be "all on you" to finish your earning if your partner stops to take care of babies.

In terms of expenses, if you are happy to take hand-me downs babies and young children cost very little beyond childcare.  As they get older they tend to have more opinions about what they wear and we've started to have to do e.g. gifts for birthday parties, and pay entry for more museums, transport, etc (whereas babies and toddlers go free most places).  My son at 2 is already having opinions in fact (much earlier than his sister!  But he is happy to "shop" the hand-me down bags as he doesn't know there is another option yet!).  My daughter is 5 and cares a bit more about what she wears, and we're offered fewer hand-me-downs for her these days - but she also wears her clothes for longer so it doesn't cost much.  Holidays get more expensive if you fly, and also once you are constrained to school holidays, but not so much if you drive or take trains (and term time only becomes a consideration when they are a bit older).

I believe teenagers are much more expensive, but we're not there yet!


EngineerOurFI

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Re: Case Study - Balancing FIRE and starting a family
« Reply #14 on: June 10, 2019, 01:14:35 PM »
My wife and I waited to have kids based on my fear that we needed to be more financially set up before having kids, etc. etc.  Now I recognize having a kid was pretty much the best thing ever and have no idea why I wanted to wait.  And now I think I want 3 kids but it may be too late for us to make that happen.  We started heavily planning on having kids when DW was 27-28.  Had first kid when she was almost 31.  I regret waiting because ultimately it took us 2 years to have the first kid and honestly the whole experience was harder on her with the added age, etc. 

I've had multiple friends who waited longer than initially planned to have kids and ultimately had fertility issues that dragged the process out an extra ~3-4 years.

If having kids is a priority to you - don't wait.  You're a mustachian and can figure out how to reduce the expenses to keep FIRE plans on track or minimally effected.  The money you've already saved will keep working for you even if one career has to downshift in the meantime, etc.

@YoungGranny It's not listed in your breakdown, but what is your total saving dollar figure or % right now?  Based on the expense you posted, you're saving a significant amount above your pre-tax deductions and likely will be able to continue a hefty savings % even if one parent stops working entirely and you factor in some 529 savings.

For what it's worth, only ~2 people in my network of ~20 people who have recently-ish gotten pregnant got pregnant as soon as they started trying.  Many of them took 1-2 years and me/my network are in same age range as OP.  In other words, you'll very likely be halfway to your original FIRE plans by the time the baby arrives.  And while, sure, you may have issues working while pregnant - almost all of the people I know (even some who were nearly on bedrest) were able to work or work from home - and since it sounds like you have a remote option already....you should (likely) be able to do the same.

remizidae

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Re: Case Study - Balancing FIRE and starting a family
« Reply #15 on: June 11, 2019, 09:21:14 PM »
Just a quick thought your about the SAHD plans. I (wife) am the high earner in the family so when I went back to work after having our first child, my husband cut his hours to 15/per week (working remotely and flexible schedule) and stayed home with our baby. It was HORRIBLE for all of us. Our baby was healthy but extremely high needs and he basically screamed for the entire 10 hours I was gone everyday, and then nursed at least every hour all night long. We had not gotten on any wait-lists for daycares (everything is more than a year out in our area) and couldn't afford a nanny because my husband was barely working. We all suffered on like that for 18 months until my husband had a major breakdown. I ended up quitting my job and we moved to Russia where the 15 hours a week my husband is working can support us. We plan to stay here until the boy can start school and hopefully I can get the job back that I loved.

Obviously horror stories like ours don't happen everyday, but I wish someone had warned us before we got locked into what seemed like a great idea. Consider yourself warned. Russia is awesome, by the way, but the boy STILL (and probably always will) challenges our mental health every single day and my husband has PTSD from the trauma. Those were the darkest days of my life; knowing that the two people I loved most were miserable and there wasn't anything I could do about it.

Iím sorry you had a bad experience, but Iím not sure what your point is. Iím sure youíre not suggesting that no one should ever be a stay at home father because it didnít work for your husband.

OPódonít let the gender roles enforcers get to you. If you like your job, keep working! The kid will be fine and you will be happier and have a stronger, more egalitarian marriage because of it.