Author Topic: Starting a family and achieving Fi? Is it possible?  (Read 6436 times)

RunningFromSpider

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Starting a family and achieving Fi? Is it possible?
« on: November 01, 2013, 08:56:00 PM »
I couldn't find the old thread but I'd like to hear from people who have become financially free/stable while also having a family.  Is it even possible or is it better to achieve financial independence before starting a family?


grantmeaname

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #1 on: November 01, 2013, 09:20:34 PM »
I and arebelspy are both planning on it, so I hope so. Is that what you're thinking about as well?

We seem to be somewhat in the minority here - obviously MMM did it so it's technically possible, but you'll probably find fewer examples of it here than of people that came to FIRE later in life.

arebelspy

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #2 on: November 01, 2013, 11:28:07 PM »
Yes, there are several people here like this.  Root is an example of someone on these boards that just FIRE'd at 33 with a family.

Think about how many very poor people raise kids.  How do they do it?  They don't spend a lot on the kids. They don't spoil them because they can't.

It's been that way throughout history; kids cost a lot nowadays because of our consumer society, not because of anything inherent to childrearing.

A child doesn't have to be expensive.  Just because your income is high doesn't mean you have to have brand new baby clothes (rather than used), or buy diapers all the time (instead of cloth diapering), or whatever.

As with everything, evaluate your spending, spend on what's important, and save the rest.

Personally I'm planning on having the first kid a year or so before I FIRE.  Had I started on the Mustachian path earlier (in my early 20s instead of my mid-20s, as I did), I'd likely already be FI, or have the kid and FIRE simultaneously.

In the end, to me, spending time at home with my (future) kids by hitting FI early is much more important than getting them shiny trinkets.

I'd bet MMM Jr. would agree.
« Last Edit: November 01, 2013, 11:30:35 PM by arebelspy »
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with two kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

RobertBirnie

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #3 on: November 02, 2013, 12:35:19 AM »
Hopefully it'll be possible as its what I'm working on! Currently our savings rate is really good but with a one year old and us still in a one bedroom apartment its getting pretty hard. But even with working on saving and living pretty meager, our family is still super happy. So what more can you ask for? =)

My wife and my goal has always been to be happy with what we have now, and not ever think "oh I can't wait for just this one thing, and then I'll be happy". Once we got this frame of mind figured out it has been much easier to scrimp and save for FI and still be super happy with our life and little family.

dadof4

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #4 on: November 02, 2013, 02:06:22 AM »
I couldn't find the old thread but I'd like to hear from people who have become financially free/stable while also having a family.  Is it even possible or is it better to achieve financial independence before starting a family?
Yes, it's possible to have a family and also ER.  It's a bit harder than for a working couple without kids -more expenses makes saving harder,  reduced income in many situations with one partner in charge of the kids, and you also need a bigger 'stache to cover the additional expenses if the kids are still in the house during ER (or worse, in college :) ). 

It is very doable, depending on your income and expenses. In terms of "financial optimization", it's best to make as much money as you can early on to enjoy more years of compounded interest. IOW delay having kids as long as possible. But there is more to life than financial optimization.

steveo

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #5 on: November 02, 2013, 04:06:46 AM »
Personally I don't think it is possible unless you have so much going your way,

A couple of points on this:-

1. I have 3 kids aged 3-12
2. I live in Sydney, Australia and houses cost a lot.
3. My first kid was born when I was 28. I'm 40 now.
4. I didn't save when I was younger and I earned a minimal income when my first child was born.
5. We bought an apartment and then upgraded to a 4 bedroom house.
6. We bought a brand new car a couple of years ago.

Basically we've done a lot of things wrong from an ER perspective. We aren't though big spenders -  for instance we've never had credit card debt.

I suppose I think FIRE is possible with kids but I think the circumstances would have to be pretty unique.

In saying that I feel confident that I can retire early but I feel that will be more like 50-55. I also don't give a shit because its not a race to retirement with other people its about you. I have 3 great kids, I live in a great country and I think I'm pretty lucky.
« Last Edit: November 02, 2013, 11:53:12 PM by steveo »

Nudelkopf

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #6 on: November 02, 2013, 05:11:11 AM »
I want to be FI before I have kids... I want to have kids, but to not worry about having to go back to work just because of money.

sleepyguy

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #7 on: November 02, 2013, 06:30:33 AM »
Hope so :)  We're both 35 with 2 kids ... plan on FI at 42 or so.  Key points for us.

1. both make relative decent salaries
2. both have relative secure job roles... hers a bit more so than mine.
3. once we both leave our F/T jobs we'll still be somewhat busy... she'll stay a seasonal consultant if she wants and I'll keep at my side hustles which take in a decent amount, we won't need $2-3 million or whatever ridiculous amount retirement "experts" advise.
4. we're paying for our kids university as well so that would add a bit more savings time.
5. we're both on the same page in terms of saving for our FI future (VERY IMPORTANT)

Mississippi Mudstache

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #8 on: November 02, 2013, 07:04:01 AM »
I hope it's possible - I turn 30 this month and should hit FI before 40. That's with 2 kids (one of whom has severe health problems) and a stay at home wife. I make less than $70,000 a year, but we already have a good bit invested and will be saving a little over half our income.

avonlea

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #9 on: November 02, 2013, 07:51:49 AM »
I couldn't find the old thread but I'd like to hear from people who have become financially free/stable while also having a family.  Is it even possible or is it better to achieve financial independence before starting a family?

We had our first child when my husband was 24 and I was 23.  We've been financially stable the entire 11 years since then and have been living on just one income--I did have a couple of small part-time jobs in the past but they didn't pay very much.  We were fortunate to start married life with no student loan debt.  We've always saved a fairly large percentage of income simply because we live more simply than the average American family.  We've also never lived in an area where the average family home costs above $200k.  My husband's salary is currently $75k.  It's more than enough.  He was making $53k just 3 years ago and that was more than enough--not for retiring super early but more than enough to raise a family. We are living more carefree now than at that time but are easily saving half of the after-tax income (currently only 40% goes toward retirement, 10% is for college savings).  We could save more but there's not much motivation for us to do so right now.

What I'm really thankful for is the flexibility of my husband's current job.  He is around our kids A LOT.  He has an office in town but works from home quite a bit (especially in the winter), has flexible hours so he can usually attend any school event or special outing, and gets 6 weeks of vacation time each year.  He could be making more money at another job but most likely wouldn't be around the family as much, and it's not worth that to us.  We feel like we have so much right now anyway. We are pretty lucky--good health, good income, time with family.

We should hit FI in our early to mid 40s.  I had never heard the term "FIRE" until I found this blog six months ago.  I think it's a good goal to aspire to, but yeah, it's possible to have a happy and secure family before ER, one where the kids get to receive a lot of time and attention from their parents and also have a good savings rate.

mm1970

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #10 on: November 02, 2013, 08:54:44 AM »
I think it is very possible.

We could be FIRE if we made a few tweaks.

We are 45 and 43, two kids (7 and 1.  Yeah, we waited.)

We have always been good savers, so that's a plus, and are worth quite a lot (both are engineers with decent salaries, though due to location, not top of the line).

What we did "wrong" - bought a house in Coastal Southern California in 2004, that is just now probably getting close to be worth what we paid for it.  And it was very expensive.  So our choice of location for living and buying a house was very poor for FIRE.  If we wanted to actually retire, we would have to move someplace cheaper.  As it is now, I could "retire" and we could live on DH's salary.  If we moved to a rural area of the country (where either of us grew up), we could both retire.

It especially helps to be frugal/ Mustachian already when you have kids so that you are already in the habit.  We've never been ones to enroll our kids in multiple expensive activities, music lessons, etc., because it's not our thing.  However we do have a big daycare bill (which would pay for a lot of activities.)

brewer12345

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #11 on: November 02, 2013, 09:41:41 AM »
We are about to pull the plug at age 40 in January with a 7 and a 9 YO.  DW has been mostly a SAHM since a year before the kids were born. although she has had a side gig for all that time (really only made more than a pittance in the last 3 years, though).  What made this possible was:

- We both finished grad school before the kids came along and we have been saving til it hurts starting around age 23.  We were not FI when we started having kids, but we had enough of a base to build on that the snowball rolling down the hill was already Volkswagen Bug sized.

- While DW largely generated minimal income, her staying at home meant we had relatively low overheead (no daycare, etc.) and I was freed up to fully concentrate on generating income.  I think I went into six figure territory on income in 2002 and never dipped back below it.  For 3.5 years during the boom I worked an extremely lucrative job that paid silly amounts of money.  Since we saved all the excess, it added up.

- We relocated from expensive NJ to relatively inexpensive CO a bit over 2 years ago.  This was a fortuitous move that was a job transfer opportunity, but we knoew we needed to get out of the tax and expense hell that is suburban NJ and we wanted to be in CO.  We could have made the move ourselves, but knowing what we wanted meant we could make the leap when opportunity knocked.  We could not do this in NJ.

- Once the kids started going to school full time, DW was able to ramp up her business seamlessly as she had more time since she had been active in it all along and kept her skills fresh.  I think she will only clear 20k or so this year, but the ability to do so for the next 5 years puts us over the top for me to quit the day job.  If she had not had the business going, we would not have this.

Baylor3217

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #12 on: November 02, 2013, 10:26:12 AM »
It's obviously easier with smaller families.  I'd be interested to hear from people with 3 or 4 (or more) kids. 

Cyrano

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #13 on: November 02, 2013, 12:39:37 PM »
My spouse and I had been working hard, saving hard, and living frugally, independently for a while before we met each other. We were each about halfway to FI when we met, and when we consolidated our households and found we were a case where two can really live as cheaply as one, that put us there.

We're still building our family and we like our jobs, so we're still working for the health coverage in case a future child isn't healthy. Maybe we'll work a while longer in case our parents need help in their old age, but if we pulled the RE trigger and didn't have childcare expenses anymore, diapers are the only other baby expense that merits its own line in our budget.

It's probably easier to get independent and then have the kids, but obviously that's a personal choice and fertility is always a question. (Or maybe not: the Baby Boom demographics featured 40-ish y.o. mothers having baby n+1 as much as it did new family formation.)

If everyone loves each other, a family of four fits in a 900 sq ft home and a used Corolla.

burly

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #14 on: November 03, 2013, 05:24:39 AM »
Mom to 5,

Thank you! Great post! We only have 1 right now but are planning 2 - maybe 3...

OP, in my calculations, having 2 children really only sets our FI back a year or two.

avonlea

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #15 on: November 03, 2013, 05:52:15 AM »

RootofGood

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #16 on: November 03, 2013, 08:42:50 AM »
It is possible.  As arebelspy mentioned, I did it at age 33 with three kids between age 1 and 8. 

I don't even think it is that difficult.  Why not?
  • You save big on taxes - we save $5500/yr
  • You don't really need most of the stuff people think you have to have to raise kids.  You are still a good parent even if you don't do all the keeping up with the Jones's in regards to kid related consumption
  • Public education in most places is decent and free.  Treat it as a supplement to your own instruction and you'll be highly satisfied
  • You don't have to buy an Expedition or Yukon XL to haul a couple kids.  You can get by with a Honda Civic (at least while they are young)
  • Some expenses drop, others go up.  We didn't expect this, but it is true.
  • Buying food and cooking for 4-5 brings economies of scale.  Food for 4 doesn't equal 2x the cost for food for 2
  • You don't have to save up 100% of sticker price for college.  Kids can earn their own money.  And there are scholarships, grants, assistanceships, work study, loans, jobs, etc to help offset costs.  And 2 years at a community college, then transfer to State U is always an option.

I posted our budget here.  $32k/yr including kid expenses.  The budget might rise a little when they are teens and during their college years, but will drop after that (we aren't planning on "economic outpatient care" as outlined in Millionaire Next Door). 

Most of what others say are kid related "needs" are actually "wants". 

imustachemystash

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Re: Starting a family and achieving Fi? Is it possible?
« Reply #17 on: November 03, 2013, 10:08:03 AM »
I think it's possible, but slower.  We would be FI by now if we did not have our 2 and 4 year old children.  Instead, we are paying $1,000 per month for child care and that's with me only working part time.  Also, we don't have the time to get side jobs because our kids take up a lot of our spare time.  In addition, both our kids have had rough starts to their lives and have had huge medical expenses.   It's going to take us another 10 years to become FI. The thing is, we want to enjoy the journey.  Our kids bring us a lot of joy and I feel like something would be missing if we didn't have them.  We will be in our early 40's when we reach FI and I think that will still give us lots of time to enjoy freedom.