There’s a classic saying, “Youth is wasted on the young.” It’s meant to convey that those who are young lack the perspective to appreciate all the advantages of youth and thus take it for granted.
After more than seven years of being a parent, it is clear to me that not having kids is a huge benefit for achieving financial independence and being able to retire early (FIRE). The problem is, people without kids don’t know how good they’ve got it. As a result, they waste their extra time on activities that don’t propel them to greater wealth.
If you want to achieve financial independence and don’t have kids, don’t blow it.
Rating The Difficulty Of Achieving FIRE Without Kids And With Kids
Before I had kids in 2017, I would give achieving FIRE (Financial Independence, Retire Early) before age 40 an 8 out of 10 on a difficulty scale. FIRE to me required saving 50%+ of my after-tax income for 13 years, investing 90%+ of it, and not splurging on wants that don’t create value. It also required me to come up with a way to exit a well-paying job with money in my pocket thanks to a severance package.
After having kids in 2017, I now give achieving FIRE before age 40 a 6 out of 10 on the difficulty scale for those without children. Yes, it can be difficult to forsake fun experiences and luxury goods, but it gets easier over time because you simply get used to living on less. Further, the amount of extra time and energy one has to work harder for money is a huge benefit. As a full-time parent or working parent, you often end the day completely exhausted.
If you have kids, I rate achieving FIRE a 10 out of 10 on the difficulty scale. Maybe even an 11 out of 10! It is practically impossible to retire early with kids unless you inherit a lot of money, are already rich, or force your spouse to keep working while you live the good life.
There’s a reason why the vast majority of FIRE influencers have working spouses, spend a lot of time online making money, or don’t have kids. Kids are expensive, and there’s too much at stake not to generate income while they are still at home.
My Wife Was Full Of Joy And Energy Before We Had Kids
I was talking to a fellow dad about the grind to achieve financial independence, and he shared with me what his life was like before kids. He told me this:
“Before we had kids, my wife and I had so much fun. We’d go on weekend adventure road trips up to Napa Valley or down to Monterey on a moment’s notice. For longer vacations, we would easily fly to Hawaii, Europe, or Asia for a couple of weeks at a time.
Now, we dread going on vacation because it’s no fun taking care of a crying toddler and a four-year-old who gets into so much trouble. I swear, he gives us mini heart attacks because he runs onto the street, jumps into pools without knowing how to swim well yet, and constantly bashes into things.
After we had our son, the joy in my wife evaporated. She was clearly exhausted every night from the crying and feeding. As she began to cry out for more help, we decided to spend $8,000 for a night doula for one month and $5,000 for a day doula for two months. The doulas helped a lot, but it drained our bank accounts.
No Going Back To Work
When it was time for her to go back to work after three months, she didn’t want to. So we decided that she would be a stay-at-home mom while I stepped on the gas at work. The pressure on me to provide was now immense because she previously made about $120,000 a year, or half our household income. In addition, our expenses went up about $18,000 a year.
At three years old, we decided to send our son to preschool, which cost $2,300 a month. That’s what three-year-olds do, right? Go to school to play with blocks and learn how to play nice with others. But I swear, at least 30% of the time he was sick, getting us all sick in the process.
My hope was that my wife would go back to work after we sent our son to school, but she said she needed a break after three years of full-time childcare. At most, she might be able to give four hours of work. Unfortunately, no employer would be down with those work hours.
Then we had another boy, which started the cycle of exhaustion all over again. Our expenses went up further and now there’s even less time to find ways to make more money. There’s probably no going back to work for my wife ever again.
Forget about FIRE. We’re just trying to keep our heads above water!”
Raising Children Drains Your Energy
A lot of people focus on the cost of raising children. However, I’d say 70% of the challenge of raising children is the amount of energy required to care for them. If you have a full-time job, you’re likely tired when you get home. But then you’ve got to appear happy and energetic to spend the remaining three hours with your kids before they go to bed.
This time spent includes feeding, bathing, playing, singing, brushing and flossing teeth, and storytelling until 8-10 pm. If your children have after-school activities they need to attend, you’ve got to take them there first, usually for an hour, then commute home.
By 9 pm, and oftentimes 10 pm if your children refuse to sleep, you are absolutely a wreck. Instead of opening up your laptop to work on your side business, you’d rather just watch YouTube videos and relax. The idea of doing anything else beyond work and childcare is comical!
Tag Teaming Childcare and Running Financial Samurai
It is largely due to my wife’s nighttime childcare that I was able to fulfill my goal of publishing three times a week on Financial Samurai for 10 years starting in July 2009. However, besides writing and commenting on Financial Samurai for 15-20 hours a week, I had little capacity for taking on a part-time consulting job given my fatherly duties.
It took a global pandemic for me to accept a book deal and write “Buy This, Not That: How To Spend Your Way To Wealth And Freedom” from 2020-2022. Otherwise, I would have declined. Homeschooling during the pandemic for 18 months was a full-time job.
With my wife editing my upcoming book and managing all the back-end work on Financial Samurai, she is also fully occupied as a mom. We are both constantly exhausted and could use the reprieve of full-time school for both kids.
Don’t Waste Your Precious Energy If You Don’t Have Kids
If you don’t have children and want to achieve FIRE, please don’t waste your energy doing frivolous things. Sure, enjoy your freedom, but also work harder than the average person so you can be promoted faster and paid more. If you’re not feeling appreciated, speak up and get a better job if your firm won’t recognize you.
On the side, start a business or do some consulting. In retrospect, working ~60 hours a week and writing on Financial Samurai for 15-20 hours a week during personal hours was easy before kids. I should have spent even more time writing! But at the time, I thought this amount of work was hard because it was all I knew.
I had no idea how hard being a parent was because I didn’t have any male role models who were full-time fathers. All the fathers I knew worked full-time jobs and told me being a parent was great. The thing is, they either all had stay-at-home spouses, had grandparents who provided support, or had full-time childcare support with nannies.
If you don’t have to spend a lot of time taking care of your kids, then of course it’s easier being a parent. But without a large support system, parenting is draining, and it will be hard to focus on FIRE.
Easy To Spend A Lot More Money On Your Kids Than On Yourself
Anyone who wants to achieve financial independence and retire early must save and invest as much of their income as possible. After a while, saving 50%+ of your income gets easier. You learn to live a frugal lifestyle for the chance to be free sooner than the average person.
However, once you have kids, your willingness to spend on them shoots through the roof! After all, you want what’s best for your kids. As parents, your responsibilities are to love, house, nurture, and educate.
The money you planned to go to fund your FIRE target will end up getting funneled to your children. Here are some examples of how your expenses could rise.
The Safest Family Car
Instead of being happy with a Honda Fit, like we were, you may end up buying a larger, more expensive vehicle because you’re afraid of getting T-boned by a reckless driver. That could be an extra $30,000 – $50,000 expense right there.
Since you’re focused on safety, you’re likely going to pay up for the safest car seat, followed by the safest stroller. Can you imagine something happening to your precious baby that could have been prevented if you had just spent $300 more? You wouldn’t be able to live with yourself.
The Nicest Home In The Safest Neighborhood
Instead of being okay living on a busy street in a ho-hum neighborhood, you may decide to look for a nicer house on a quiet street in the best neighborhood. That move could set you back $500,000 – $5,000,000, depending on where in the country you live.
Instead of having a sidewalk as your backyard, you’re going to want to find a home with lots of usable land for your kids to play on. Young kids have so much energy, you’ll want to let them outside and scream their heads off in a safe space.
So once you see that perfect house with a huge lot and nerve-calming water views, you may bid on it with all your emotion. Unfortunately, other households imagine raising their children in such a wonderful house too, and you get outbid. The emotional toll of living in suboptimal housing may drain you to the point of being willing to pay whatever it takes to own a nice home.
The Healthiest Foods
Given you’ve bought a safer car and own a nice home, you’re not about to skimp on buying the healthiest organic baby and toddler food, are you? Of course not. Your body is your temple! Why eat junk food and risk creating health problems down the road when you don’t have to?
Unfortunately, the freshest foods cost 50% – 100% more than average processed foods with pesticides and questionable additives. But for the sake of living long enough to see your children become independent adults, you’re also willing to spend more on eating better.
Then there’s the matter of working out. The more you exercise, the more tired you might become. The more tired you are, the less energy you may have to work and make more money to achieve FIRE. It’s a balancing act between staying healthy and maintaining productivity.
The Need For Health Insurance
If you retire early, you will no longer receive subsidized health care insurance from your employer. Once your income is over 400% of the Federal Poverty Level Limit, then you’ve got to pay unsubsidized health care insurance premiums.
For my family of four for a silver plan, we pay $2,500 a month, or $30,000 a year in health care premiums. If we actually have to go to the doctor, we pay even more in co-insurance and co-pays. We got charged $3,500 for a 20-minute ambulance ride when our daughter had an allergic reaction. Each of our two Emergency Room visits cost over $1,000.
The more people you have in your family, the more health problems and bills you are bound to have. Without receiving healthcare subsidies, the cost of healthcare could eat up a lot of your retirement income.
Paying for unsubsidized health care insurance with no steady day job income can be scary. As a result, having both parents retire early with kids is tough. Health care costs is consistently one of the top reasons why both parents are too afraid to FIRE.
Saving For A Great Education
If fine foods, a safe car, a nice home, and expensive health care aren’t enough, you’ve also got to save for your children’s college education. After all, education is what will set your kids free to live independently.
After 15 years of writing on Financial Samurai, I clearly see the high correlation between wealth and the people who religiously read about personal finance topics, and those who do not. Those who do not are much less wealthy than those that do. Yes, reading Financial Samurai is free, but college is not.
The average lifetime income earned by college graduates is still much higher than the average lifetime income earned by those with only a high school diploma. As a result, you will feel uncomfortable not sending your kids to college.
Unfortunately, the cost of college is outrageously high and will keep getting higher over time. You don’t want to saddle your kids with student debt when they graduate, so you must save Coast 529 Plan Target amounts for each. We’re talking $700,000+ in the linked example.
That’s right, not only do you need to save and invest enough for traditional FIRE, you’ve also got to create Coast FIRE plans for each of your children’s college education costs. As a result, good luck trying to accumulate enough investments to cover your basic living expenses with kids. It’s likely not going to happen.
You Don’t Have To Spend So Much On Your Kids
Kids can be as expensive or as cheap as you choose. You don’t have to spend excessively on them. The fear of not spending more money on your kids stems from potential regrets once they’re adults. But you might start wondering:
- If we had bought a safer vehicle, maybe he wouldn’t have suffered a concussion that sent him to the hospital for three days.
- If we had fed her better food, maybe she wouldn’t have developed diabetic symptoms.
- Had we saved more for his college education, he could have attended a higher-ranked school and gotten a better job, rather than graduating with nothing but sadness.
- Had we bought that home in the safer neighborhood, he wouldn’t have been bullied and mugged multiple times on his way to school, thereby developing a childhood trauma that affects his adulthood.
The more you care about your kids, the more you’ll likely spend on them. You can certainly try to spend the least amount possible on your children, but it will go against your nature if you love them dearly.
Remember, the one ingredient necessary to achieving financial independence is FEAR. The more you fear for the well-being for your child, the more you will use your resources to minimize their chances of hardship.
FIRE Choices For Those Who Want Kids Or Have Kids
If you want to FIRE and have kids, there are two main choices:
1) FIRE first, then have kids (the easier route)
Set a target date for having kids, and do everything possible to boost your wealth before then. This target date must be reasonable according to biology, as having kids after age 35 naturally becomes exponentially more difficult. The earlier you meet someone and know you want kids, the more time you’ll have to save and invest accordingly.
The benefits of FIRing first and then having kids are numerous. First, you’ll get to spend more time with your kids than working parents. Second, it’s easier to be more present with your kids because you won’t have to constantly worry about work emails, meetings, and trips. Finally, you should be able to develop a stronger relationship with your kids that lasts a lifetime.
The biggest downside to this plan is that you may wait too long to have kids since achieving traditional FIRE is challenging. If you feel you waited too long, especially since you already knew you wanted kids, you may be filled with regret. The older you are when you have kids, the less time you or they will have in each other’s lives.
Depending on how much wealth you accumulate before having kids, you may also constantly worry whether you have enough money to provide for them. If you can’t control your desire to give your children everything, you will constantly feel like you’re in a deficit. Luckily for older parents, I figured out a solution to minimize the regret of having kids late.
2) Try to FIRE after having kids (the harder route)
Where there’s a will, there’s a way! To FIRE with kids you will likely have to work harder than you ever thought possible to make more money. You may also have to take more calculated risks to boost your investment returns.
Even if you reach your FIRE number, you will likely experience the “one more year syndrome” and continue to work. It’s just too scary to leave a steady job behind when you have people depending on you.
Although giving up a day job while you have kids may go against your nature, you can make adjustments to make it work. You’ll need to cut down on expenses, manage your income to get subsidized health care, and set a FIRE target date. Babies and young children (under 10) just want to spend all their time with you. If you can do that, you’ll more than make up for the loss of money because time with your children is priceless.
To ensure your family’s survival as FIRE parents, you’ll likely need to generate supplemental retirement income. In the worst-case scenario, you might prohibit your spouse from joining you in early retirement. Crack that whip!
Controlling lifestyle creep is vital for remaining FIRE after having kids. If you can embrace public schools and live in an inexpensive home in a low-cost area, your chances of remaining FIRE with kids increase significantly.
Not Having Kids Makes FIRE Much Easier
So there you have it, folks. If you want to achieve FIRE, don’t have kids. It’s almost a walk in the park compared to trying to achieve FIRE with children. Please make the most of your free time.
There is one benefit of having kids from a FIRE perspective I’d like to mention. That is, once you have kids, your desire to provide may shoot through the roof. You’ll walk to the ends of the earth to take care of your family. When you have an important purpose, you naturally get motivated to succeed.
So don’t be afraid of your kids keeping you on the corporate treadmill forever. If you want to FIRE badly enough, you will figure out a way to get there.
Reader Questions And Suggestions
Do you think it’s almost impossible to FIRE with kids? What are some other things that make FIREing with kids difficult? Do people without kids realize how good they have it in terms of more time and energy?
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