Author Topic: Australia - HCOL Area House, Child and/or Stache?  (Read 2375 times)

KidOrStache

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Australia - HCOL Area House, Child and/or Stache?
« on: May 25, 2016, 06:33:54 AM »
Long time reader looking for others' experience in handling these sort of issues, rather than advice per se.

- Couple based in Australia, both ~40 years old
- Salary ~$100k each, current saving rate >50%
- House paid off, no debt, only mildly uncomfortable with level of wasteful expenditure
- Sizeable stash - if no changes (basic expenditure) FIRE feasible in 5 or 6 years, probably a few more to hit SOs desired lifestyle/margin of safety

So here are the trade-offs I'm trying to get my head around.
- We're deciding whether to have a child.  Both of us are very open to the experience, I'd say one of us wants a child more than the other.
- My parents live in a very expensive area (3BR house nearby >$800k AUD, probably double the price of our current smaller house).  "Good school" Areas are probably more expensive still.  We'd be looking at halving our stash, I estimate FIRE in 15 years.
- If we have a child we'd probably want to move closer to my parents for family support - this could potentially be renting during the more challenging early stage.  My sister and her family also live more on their side of town.  Its highly unlikely my parents will move far from their existing community.
- If we have a child it should probably be soon given our ages.
- Even if we don't have a child, my parents are aging and we'd like to be closer to be able to see them more/more easily.  But less time-critical without jnr.
- I'm also supposed to be resuming part-time graduate studies shortly.

So the choices I'm currently pondering,
In terms of time in the near term:
- Have a child
- Resume part-time study
- Work full-time

In terms of money
- FIRE by age 50 vs probably 55+
- The house closer to parents

Pretty sure we're not open to apartment living and my SO is not looking to be much more frugal.  All of these lead to good lives of moderate luxury.  I'm just trying to lay the choices out so I can see them more clearly.

Anyone else struggled to choose between some of FIRE, proximity to family, formal education and having a child?  It seems likely we will have to let something go in order to achieve some of the other goals...

ShoulderThingThatGoesUp

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #1 on: May 25, 2016, 06:52:09 AM »
I would think not having a child would be what you'd regret most going forward. It's not for everybody but as you state, decision time is now.

alsoknownasDean

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #2 on: May 25, 2016, 07:24:07 AM »
How far are you from your parents?

If they're in an expensive suburb, then are there cheaper areas near to them?

As for the kids thing, if that's what is important to you, then go for it.

Speaking of which, with two 100K salaries and a paid off house, surely your savings rate is well over 50% (75% wouldn't be that hard). That's about $150K a year post tax, maybe less if you're both salary sacrificing your super to the concessional cap. :)
« Last Edit: May 25, 2016, 07:26:32 AM by alsoknownasDean »

Playing with Fire UK

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #3 on: May 25, 2016, 07:46:29 AM »
Would you consider:

Continuing to work towards FIRE fore five years
Adopting a child(ren) at that point if it was still what you both wanted
Instead of buying a house in the 'good' school areas, take advantage of having both parents home (or possibly working part-time once jnr is in school to meet SO's lifestyle and safety margin concerns) to do great activities and supplement the education they will get at school
Having more time to travel to see your parents, but not move closer.

No need to justify if this isn't for you and SO.

SKL-HOU

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #4 on: May 25, 2016, 07:47:55 AM »
I don't think anybody ever regrets having a child. Not having one on the other hand, some people may regret.


pbkmaine

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #6 on: May 25, 2016, 08:24:24 AM »
Some people absolutely regret having children. They do not tell other people with children because it is not socially acceptable. They do tell me because I am childless by choice and they know I will understand.


KidOrStache

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #8 on: May 28, 2016, 10:21:44 PM »
Thanks for your thoughts.

Yes, we salary sacrifice the maximum into tax advantaged superannuation.  I consider that part of our savings as I expect us to live long enough to access it.  I imagine we do save well more than 50% but we have only a relatively short history tracking our current life setup.

I don't think we can rely on adoption.  Many regulatory/bureaucratic hurdles have been placed in front of adoption here so, while it may be a possibility if one had no other options or a strong preference in that direction, it's not something we can plan on happening.

I doubt I would regret having a child as such.  It's more that it will be a fairly different life from FIRE in 5-10 (in ways I probably can't yet fully comprehend) so I want to do my best to understand what trade-offs others have made and see if I can learn from them.

Anatidae V

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Re: Australia - HCOL Area House, Child and/or Stache?
« Reply #9 on: May 29, 2016, 05:04:36 AM »
You may wish to read through the mini-mustaches section for what comes up for those with children. We can suggest what might work to get you where you want to go, but not where you should go ;)

It may be worthwhile drawing up a few annual budgets for current circumstances and different scenarios, both pre and post FIRE. Your jobs might be costing you more than you realise in commute, food and clothing costs, so FIRE could be closer than you think, or permit part time work during a child's early years. Tracking your spending can reduce how much you're spending all by itself, too!

Also, with an approximate annual spend of $75k based on alsoknownasDean's quick calc and a paid off house, there are either some quick wins you may have in the budget, OR you'll be very pleasantly surprised when your tracking shows a higher savings rate!