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Achieving Financial Independence With A Family

May 25, 2021

A Family on their way to Financial Independence

Is it possible to achieve financial independence when you have kids?

Depending on who you ask, answers vary from “of course it is, what are you talking about?” to “you must be joking – do you know how much kids cost!?”

I’ve always been in the first camp.  But given I’ve got no kids of my own, I can’t exactly preach with authority on the topic.

But this article is something special.  A reader named Steve reached out and offered to share some excellent advice on how he’s working towards financial independence with a family.

As it turns out, it’s all the tips and strategies I would use myself, and this reader’s thinking is very much in line with my own.

So let’s start with some info about our helpful reader and his situation.  Then we’ll get into his best advice for balancing a happy family life and saving for FI.   (There’s a summary at the bottom if you’re short on time… or lazy!)


 

Introducing our guest…

Can you share a little about your personal situation?

Our family lives in Brisbane.  We are in our early 30s and have two children under 5.

My partner owns a modest investment property that is negatively geared. We also have a PPOR mortgage together.

We spent 5-6 years working full-time, each on less than median wages, before our first child was born.

Since becoming parents, we have both changed working patterns more than once.  My partner was home full-time initially, doing a little bit of work from home to keep her brain running.

Later, we both shifted to working part-time, and now our roles have reversed.

We currently earn the equivalent of a little more than one median full-time income and spend around $50K per year ($35K per year excluding the mortgage).

Dave:  For curious readers, the median full-time income for employees is $78,000 before tax, according to this ABS report from 2019, under ‘Distribution of earnings for all employees’).

 

When did you start pursuing Financial Independence and how far along are you?

Both of us learned early to be sensible with our money, and we are both fairly minimalist – preferring to spend time with family and friends, rather than buying expensive things or experiences.

We are comfortable with relatively few possessions and making the most of what we have around us.

By the time we heard of FI when our second child was born, we realised this was the path we had already been taking our whole life.  It made sense and gave us a goal to actively work towards.

We are not yet financially independent, but we are working considerably less than our peers – a bit of early cashing in on the perks.

Our next goal is to sell my partner’s investment property, pay off our mortgage and downsize (!) to a less affluent suburb, so we can be very close to the school we chose for our kids.

 

How have kids affected your finances?

We had always planned to have kids and so we structured our finances around our future in the following way:

  • Before having kids, we decided we wanted to A) live in our own home, and B) live off one income.  To make this work, we set an upper home purchase price so that our expenses could be covered by one working parent.
  • We looked for a home in the closest suburb to my job where the median house price matched our purchase price.
  • We saved up a massive deposit (30%), stuck to our plan and executed it nicely.

Before having kids, we didn’t really know what to expect  – would it really be as expensive as everyone told us?

Turns out, for us at least, the answer was a resounding NO.

First, we were told that the cost of birthing a child would be around $10k.  We set aside this amount, but it wasn’t necessary.  Both children, from pregnancy test to welcome home, cost us a grand total of $400.

This was mostly due to eschewing private health insurance, opting for public care (which was fantastic), and being in the privileged position of having low risk pregnancies.

Second, we were told that raising children is expensive.  Childcare, food, toys, activities, clothes – the list was endless.

We have a stay-at-home parent, who cooks from scratch, takes the children to low-cost activities and they love their second-hand, minimalist wardrobe and modest, enduring toy collection.

One thing that has been unexpected for us was our recent decision to send our children to a private school.  We had always intended to use the public system, but we discovered that our kids are both atypical and it was important for us to find an environment where they would be well supported.

Even with this, we are on track for our FI goals.  Most families aiming for FIRE would not need to do this and could therefore be in an even stronger financial position than we are.

 

Has being a parent changed how you feel about Financial Independence?

We had always been diligent savers, knowing that it would provide us with a safety net if anything unexpected happened.

Until a few years ago, I loved working full-time and never fancied being a stay at home parent.

This situation changed and we were fortunate enough that I could take a break from work and spend more time with my family.  Based on how many shocked reactions I get, I guess that many people wouldn’t consider this to be possible for them.

Being a parent has helped me to appreciate the good financial decisions we have made.  I want to take advantage of this while my children are still young.

 

Have you experienced judgement for spending less as a family?  And how do you (or how would you) deal with that?

We’ve been told repeatedly over the years that it’s “not possible to survive off only one income” – even from people who don’t have any children at all!

It’s all a matter of priorities.  To us, spending time with family and friends is our top priority.

If you value trinkets and other people’s perception of your wealth more than you value your time, then I don’t think you can ever be truly happy.  We are fortunate to have people in our lives who also believe in this.

Having said that, it hasn’t all been smooth sailing.  My partner experienced a lot of judgement after our first child was born in the supposedly supportive environment of mothers groups.

If we chose not to buy our child every conceivable toy or sign them up to every activity that can be squeezed into a week, complete with photos to share on social media, the assumption was that we were denying our children of happiness.

We find it helpful to focus on thinking about what we are grateful for and why we have chosen this path.  Some examples are…

  • We were both brought up in a stable and safe family environment.
  • We received a good education and were able to save some money before having children.
  • We were able to have children when we chose to and we have had supportive employers enabling us to adopt flexible work arrangements.

If you are able to access this blog right now and have the time and space to read it at your leisure, chances are that stars have aligned in your life too.

It is very easy to forget how privileged we are when we spend most of our time with other privileged people.

Rather than thinking “why can’t I afford this?” you could think “how many other people in the world right now would give anything to have what I already have?”

This positive phrasing can help you avoid falling into the trap of thinking you are poor.

 

What else do people get wrong when thinking about FI and kids?

I think people get a bit carried away with the saving and investing part of FIRE and forget that the point of it all is to spend time with your loved ones.

Yes, we could reach FI sooner if my partner and I go back to full-time work, but what then?

All of the time and energies devoted to raising children doesn’t just end when the parental leave does.

Once you have children, you need to shift priorities from working to save as much money as possible, to balancing spending your time with them and tucking a little something away.


Now that we know a bit about our reader, let’s see what he has to say about reaching financial independence with a family.  Take it away Steve!


 

Having a family is a lifestyle choice

A lot of people complain that having children is expensive.

The number one reason I see given is that “the cost of childcare is insane/unbelievable/ unreasonable/unfair etc etc,” It’s as though children are expensive because all children need childcare.

The number one piece of advice I have for anyone striving for FIRE, who is thinking about having kids (or already has them) is to read “Hold On to Your Kids” by Gordon Neufeld.

If your idea of having kids involves outsourcing their raising to a childcare centre, followed by a school (with before- and after-school care), this book will completely change your perspective on parenting.

When you have children, they are the ones you spend every spare moment with.  If you have the means to do so, create more spare moments for them.  It’s great having one parent stay at home or, even better, both parents working part-time.

But honestly, even if you do send your kids to childcare, the government subsidises up to 85% of the cost.  Hell, even if you earn $170,000 per year as a couple, you still only have to pay 50% of the cost.  It’s not actually that expensive.

Diligent FIRE-aspirants who have a few years head-start will be in a much better position than the average family to be able to take some time off work.

But a common complaint in the FIRE community is that having a family is a massive opportunity cost due to years of lost income.  It seems like, regardless of whether you put your kids into care or stay at home, it’s a lose-lose situation!

Deciding to have a family is a lifestyle choice.  Yes, it is a trade-off between time and money.  Having a family means you are essentially choosing “time” over “money.”

Sound familiar?  It’s exactly the same reason people in the FIRE community want to retire early!

It’s not that much different to saying, “retiring early is a massive opportunity cost – think of how much you could save if you worked another decade!”

It’s all a matter of priorities.  If you are serious about having a family, that needs to come first.


 

Housing for Families

When deciding what kind of home to live in, the typical couple approaches this by saying “OK, so we have (or plan to have) X number of kids, so we will need a house with X + 3 bedrooms” (one for each kid, plus one for the parents, plus a study, plus one for… well, you need an extra room in a house, right?).

So you end up in an enormous house with a squillion rooms.  And because your kids are in care or school all day, and you are at work, this enormous house sits empty most of the time.

This approach never made sense to us.  In our home, both of our kids share a tiny room that fits their beds and a set of drawers with their current clothes and nothing else. They will probably be very comfortable in there for a number of years yet.

Requiring fewer rooms will save you a shitload on housing costs, whether renting or owning.  Having a smaller home also means you won’t fill it up with junk and it’s easier to clean, which is another bonus.


 

Private Health Insurance and Kids

Almost everyone, regardless of their stance on private health insurance prior to having children, is convinced that it is absolutely necessary when you start having babies.

This is utter rubbish.  Australia has an amazing, free health care system.  Unless you are earning enough to pay the Medicare Levy Surcharge (i.e. >$180,000 for a couple), it doesn’t make sense to fork out a few grand every year for insurance.

From memory, the only out of pocket expenses we had with our children was the home pregnancy test, one of the early pregnancy scans, and a few parking fees at the hospital (maybe $200 per kid all up).

That’s literally it.  And as it turned out, we were even put in the “private” rooms for the birth of our second child because the public rooms at our hospital were all full!

Meanwhile, our friends who went with private health insurance had to fork out hundreds of dollars (on top of the insurance premiums) for their various appointments and scans, and several hundred dollars just for access to the Pregnancy Assessment Centre, which is free for public pregnancies.

And because they had private health insurance they were unable to access public doctors, meaning they often had to spend longer waiting to see specialists.

Yes, they were able to nominate their obstetrician, but were delivered by a midwife team anyway because their obstetrician was on holiday.  They did get 5 days post-delivery in the hospital instead of 1 in the public system – but it cost them 10 grand.


 

Social Activities for Children

Many parents are worried about their kids getting enough “socialisation.”

This is often the reason given for enrolling them in childcare or various social/sporting groups at a young age.  In reality, the most important thing for kids’ development is to nurture their relationships with adults, not other children.

That doesn’t mean that kids shouldn’t have play dates.  But do you know that play dates can be totally free?

Yup, you can take them just about anywhere to play with friends – visiting each other’s houses, going for a bike ride, playing in a park, walking in the bush, visiting the library.

Kids are happy to do absolutely anything, so why not pick something that’s free?

If you don’t know any other kids, start taking your family on a stroll around your neighbourhood.  You will get to know other local families very soon.


 

Toys and “Stuff”

Let me just say that kids don’t need you to spend money on them to buy stuff.

Studies show that kids who have fewer toys engage in more imaginative play and are more willing to use toys in creative ways. They have longer attention spans and fewer meltdowns over lack of access to a particular toy.

Our own experience confirms this.  We try to keep the total number of toys/puzzles/books in our house to a minimum, and only have a small selection out at any one time.

Sometimes our kids will play with a single toy for an hour at a time, and are basically able to amuse themselves with anything they come across.

They are also generally willing to keep at something that isn’t instantly easy to use because they are curious about what they can do with it, and carefully pack away one toy before pulling out another.  Their toys are precious to them, important to keep orderly and intact.

As an added bonus, whenever we rotate out something they haven’t seen for a while, it’s like they’ve just gotten something new to play with!

Meanwhile, our friends have houses bursting with toys (toys in the kids bedrooms, toys in the bathroom, toys at the table, toys in the yard, toys that need to be taken out everywhere with the kids so they can be entertained… it never ends).

These kids seem to struggle to keep their attention on any one toy for more than a few minutes at a time.  They show little genuine appreciation for a gift and little remorse at losing or breaking one.


 

Second Hand Stuff Rules

Just about everything you need when you have kids can be bought second hand (or even gotten for free if you are lucky enough to know someone who had kids a few years before you).

This includes cots, beds, clothing, toys, books, prams, carriers etc.  And there are plenty of places to source second hand stuff –  local charity shops, Gumtree, Facebook Marketplace, etc.

Facebook also has local groups that are set up for neighbours to give things to each other for free.  Resist the urge to accumulate too much stuff just because it’s cheap.

Once your kids outgrow things, you can give them away to another family with younger children (or via any of these sources if you don’t personally know any).

We have found it helpful to involve our kids in the donating process, so they can see their old stuff going to a new home for another child to have.  They often speak warmly of past things that they were attached to and how they are happy that another child gets to enjoy them now.

If your kids have difficulty letting go of old things they no longer use, you can combine the donating activity with getting them something new (e.g. if their clothes are getting too small, bring out their new clothes when they are donating the old ones).


 

Holidays with Kids

One of the great things about kids is that they are instantly excited to be anywhere.  Everywhere is new.

The upshot of this is that a holiday can be literally anywhere and the kids will have a great time.

I’ve never understood why some parents fly their young kids around the world on (what must surely be) extremely exhausting, action-packed holidays, when they’d have just as much fun (and less stress) going somewhere local.

Since having kids, our holidays have all been awesome local camping trips, although we recently stayed at an eco-lodge in the mountains thanks to a gift from colleagues.  Nothing beats getting outdoors with the family for a few days.


 

Trimming the Family Food Bill

Feeding a family will obviously cost more than feeding one or two adults.  But eating doesn’t need to be expensive.

We spent more on food when it was just us, because we often ate out at cafes or grabbed fast food on the way home from a long day at work.

We know childless couples who spend more just on take away than our family does on all our food combined.

Focus on cooking and preparing your own food at home and skip all the crap that comes in tiny plastic packaging or gets personally delivered to your door.  Yes, this takes time, but costs less money.  It’s the time vs money trade-off again.

Veg, fruit, nuts and beans are all super nutritious, filling and cheap.  We eat meat, but not every day and in smaller portions compared to when we were younger.  If you spare your family all the sweet and salty junk, your kids will love this stuff too.


 

Achieving Financial Independence with Kids – Summarised!

Here’s a quick summary of Steve’s main points…

  • Remember how good we already have it in modern day Australia.
  • Having lower expenses lets you spend more time with your kids right now.
  • Childcare is heavily subsidized, so out of pocket costs are manageable.
  • Avoid the competition and comparison games that other parents play.  This is just status-seeking nonsense.
  • Your kids need you, more than they need toys and fancy holidays.
  • Question your need for private health insurance.
  • Keep your housing needs minimal – kids don’t actually take up much space.
  • Children are happy playing anywhere, with anything.  Take them to the beach, parks, camping, or anywhere in nature – they’ll love it!
  • Buy second-hand items where possible.  Kids grow so fast that you probably won’t get much use out of brand new stuff anyway.
  • Make an effort to prepare lots of healthy home cooked food and minimize pre-packaged or takeaway.

 

Final thoughts from Dave…

Honestly, I have nothing to add.  There are so many great reminders in here that raising a small human doesn’t somehow blow up an entire family’s finances forever.

I wholeheartedly agree with Steve’s practical advice and want to thank him for sharing his perspective and experience with us.

Now, you could say none of these are earth-shattering ideas.  But that’s actually the point!

Saving, financial independence, and living a good life are all relatively simple things.  We just make it harder and more complicated than it needs to be!

Having a great family life while saving and building wealth doesn’t involve incredible sacrifice or extreme hacks.  It’s simply choosing to do things in a more thoughtful way, focusing on what really matters, and disregarding what doesn’t – including the opinion of others.

If you’re a parent (or plan to be), I hope this article shows you that even though your circumstances may change, you can definitely (and comfortably) build financial independence and create the life you want!

Do you have any tips for your fellow readers when it comes to reaching Financial Independence with kids?  Leave a comment below.

And if you know someone who should read this, please share it with them 🙂

31 Comments

31 Replies to “Achieving Financial Independence With A Family”

  1. Thanks, so happy to read about a family for a change. We’re a few years ahead of Steve age-wise, it does get a bit harder when the kids get aware that their peers have and they don’t but in the long run I’m convinced it’s worth it. And so worth the loss of income to spend time with the kids!

  2. Here here! I agree whole heartedly with Steve. Kids really do not have to be that expensive. We’ve been keeping annual tallies on our blog of kid related costs to prove this!

    We shifted to 1 retired and 1 part time when our daughter was born and it was by far the best decision we made. Totally agree that kids want your time and attention and love – not your money to buy them toys.

    Here in Canada, we also get Canada Child Benefit where we get paid by the government for having kids! Right now for us it’s around $4k/year (which is way less than we spend) but once baby 2 comes in a month and I FIRE as well, that will jump up to $17k/year for awhile. Just nuts as it’s actually helping us lower our withdrawal rate!

    1. Very nice Court! It’s good to hear your experience is along these lines too, and awesome you were able to spend so much time with your daughter.

  3. Good article Dave and Steve!

    It sounds like part of the key here was getting started early with buying a house and investment property so that by the time they had kids they were actually in a good place for this financially and a fair chunk of the hard work on the saving front had already been done.

    Since then having both people work part time would be very helpful as well and makes a lot of sense, you get to make the most of the tax free threshold for both parties, hopefully get plenty of flexibility, and keep your hand in for your job! Depending on the circumstances it might be possible to be paying 10 grand less tax compared to one person earning the same gross amount!

    I mostly agree with the advice, but think that private health insurance can definitely be worth it. Sure you don’t need it if your kids don’t have any issues or only minor ones, but if they do then it can get quite expensive very quickly. Or as good as the public system might be, it can take a lot longer to get seen for “non-urgent” issues.

    We needed speech therapy for one of our children and were referred within the public system with a warning that it would likely take at least 6 months to see someone. Sure enough about 3 months after the referral we got a call from our local health authority to book in our first appointment, with the first available date being 3 months onwards, so 6 months in total. Given the warning about the length of time it might take to see someone we hadn’t waited around and had booked in with a private provider a week after the initial referral and were pretty much done with the treatment before the public system even had an appointment available. The cost of this wasn’t massive (high hundreds rather than thousands) but there are plenty of other problems which can cost a lot and are time critical to get sorted out.

    In general though I think all of Steve’s advice makes sense, congratulations to him and his partner!

    1. Cheers mate, thanks for sharing your perspective! It’s definitely good that Steve and his wife were able to save before having kids, but considering they’re still saving a decent chunk of their income now, they’d still be making progress to FI if they didn’t give themselves a head start.

      On health – if something is super important and time sensitive, then it’s always worth considering just paying out of pocket rather than waiting for the public system. That’s the beautiful advantage of having savings in the first place – even if it is thousands, it’s not a big deal.

    2. Thanks for the kind words. I know not everyone will agree with our approach, but it’s always made sense to us.

      Getting started early was definitely very helpful, although the majority of our gains have been through saving money, not investing. The capital gains on the IP have been very modest considering the amount of money we have put into it, we have been lucky that the market has been strong recently and hence our move to sell it. Even without the property we would be in a similar financial situation.

      Regarding the health insurance, anything urgent will be dealt with immediately by the public system. But I also appreciate your point that some things feel urgent to a parent but won’t be deemed so by the public health system. In that situation, we would just opt to pay private fees using the thousands we have saved by not paying for private health insurance for years.

      Steve

  4. This is the most sensible and resonating article I have read in a long while.

    Steve, how do you deal with:
    1. Excessive birthday parties, overflowing with sugar and mindless plastic presents?
    2. Grandparents who seem to bring over a toy every time they visit? And generally people who think material possessions and senseless gifting equals love and affection.

    We don’t associate with these tendencies at all, but also don’t want to create too much of an issue over it with our kids.

    Thanks
    Chris

    1. Cheers Chris, glad you enjoyed it. Hopefully Steve pops by to answer your Qs in the next few days 🙂

    2. Hi Chris, glad to hear you enjoyed the article.

      Both my partner and I made it very clear to our families early on that we don’t wish them to lavish our children with an endless stream of gifts. We are fortunate that the kids’ grandparents respect our wishes, even if they don’t always agree with them. You do hear of strained relationships between parents/grandparents when this is not the case, which I think is very sad.

      At birthday parties, we request people not to bring gifts (and if they do, we open them later). Usually we ask instead for them to bring a plate of food if they want. For some people, gift giving is a key way for them to show love, so it’s also important to respect that too.

      Usually, the gifts the kids receive are thoughtful and useful. They do occasionally end up with junk stuff, but since we cycle toys out every couple of weeks, these soon disappear from sight and are usually forgotten quickly. We donate them elsewhere where possible.

      As for overflowing sugar at parties… if it’s our own kids’ parties, most of the food will be reasonably healthy. If it’s another kids’ party, there’s almost always a platter or two of fruit or carrots/cucumber sticks etc that our kids tend to gravitate towards. Other parents usually appreciate that at least someone is eating that stuff!

      Rather than telling our kids what they can and can’t eat, we chose the approach of educating them about it. We printed off a food pyramid and explained the different types of foods and how it’s important to eat variety. It’s surprising how well kids can identify different types of food, and especially red food!

      They know they can’t have more than a few pieces of “red food” because otherwise it will make their body sick. Not sure this approach will last forever, but seems to be working for us so far.

      Having said that, we don’t see anything wrong with our kids having home-made cakes or muffins or similar stuff every now and then. Particularly if friends or family make them for our kids. We can’t expect other parents to have the same approach as us, so instead of making a fuss we just let the kids go along with it when they are at someone else’s house or a party, and trust that they will make the right choices most of the time. If there’s junk food around, they usually ask us first if it’s OK to eat it (or how much they can have).

      Steve

  5. Great article that keeps it simple. I had 2 kids under 4 as a single mum and after childcare costs took home $20/after paying fees.
    I considered it my choice and my day out.
    I then received the government assisted $ so even though I was on low income there was ways like above to keep costs down!
    Groceries and holidays were cost cutting for me.
    Often a holiday was a trip away to spend with family or friends and cost petrol and food.

    1. Thanks for sharing Andrea! Everyone’s got such different circumstances it’s really interesting to hear.

  6. Great article! I agree completely and can vouch for the possibility of raising kids and saving for FIRE in Australia, where I live. Like the author, I also have kids (more than 4), didn’t have private insurance (public care was fantastic, my post-natal stays ranged from 4 to 9 days), and survived on one income. The biggest glitch was a divorce (court proceedings and financial abuse were very costly factors). However, I was able to rebuild, re-skill, resume work, and get back on the FIRE journey. Kids are now older. The biggest struggle is teaching the children, who are still with me, who have a inclination to compare with peers and crave the “must-haves”, such as cool shoes and technology. At one stage, I was raising 5 kids with an income of $35000 but they didn’t want for essentials. Now, I am proud to see that some of my kids have learnt to save/invest and I see them FIREing at an early age too.

  7. I really enjoyed this article, thanks! I become motivated about FI after having our second child & thinking there has to be a better way than outsourcing their care. Fortunately, my husband and I had done all the basics to have a decent foundation to keep building upon post kids (2 boys aged 8 and 5). This means we can both work part-time and live a very comfortable lifestyle spending money (approx 50K pa) based on what we value and being more frugal in other categories. Paying off our mortgage early was a game changer for us in providing more freedom and choice. Learning about investing in shares has been the next best thing we have done.

  8. been to a public hospital lately ?….
    the public hospital system throughout Australia is in disastrously bad shape.
    I know, as I work in them.
    people are dying in waiting rooms of gridlocked emergency departments as happened in Perth recently.
    And if you want non emergency surgery such as a knee replacement, you’ll spend 9 months waiting to see an orthopaedic surgeon in an outpatient clinic and then 1 – 2 years on a surgery waiting list. even longer for Ear, nose throat problems and other specialties.
    No thanks !!
    meanwhile I had my knee arthroscopic surgery the week I wanted it at a private hospital not long after seeing a surgeon.
    my wife needed to see an oral surgeon earlier this year for a painful problem that 2 dentists could not manage and was told of an 8 week wait at the public hospital. So I took her privately, got seen the next day and surgery a week later at a private day surgery. problem solved.
    I’ll never get rid of private health insurance. Life is too important.

  9. Loved reading this article and I completely agree that kids need time with their parents and not the latest BMW. We are so lucky in Australia with our public health system. I was in private health care for over 10 years until I got divorced and could no longer afford it. My teenage son injured his finger in a door at school and ended up in the hospital and had to have surgery. We were in emergency for 12 hrs before the operation at 10.30 pm at night which was the last operation that day and then the next day we went home. The female plastic surgeon was incredible and when I saw my son’s finger I thought he would loose the top of it as the cut was 3/4 around his finger. We had follow up appointments and his finger fully healed and you wouldn’t even know anything had ever happened. We did not pay one cent for this amazing care and I am very grateful for this. A friend on the other hand is in private health cover and has had lots of procedures due to breast cancer and every test, every specialist, every surgery is way out of pocket by thousands of dollars even with the top cover. That part I don’t understand, as there is so much out of pocket. I am very grateful to be able to have access for my kids because I am unable to be in private health care. Before divorce my kids were in a private primary school and I had to take them out and change to public school which was difficult as I went to a catholic school growing up. I had no choice to change and I was really upset about having to do it, however in hindsight it was the best thing and I am so grateful for the education they receive and there was so much more opportunity for them at the state school than where they were before. We are so lucky to live in Australia for many reasons like this and including how we have handled the Covid-19 situation. Where else would you want to grow up. These days second hand clothes and things, thrifting is very mainstream and acceptable, I remember years and years ago my friend bought some second hand clothes from an op shop which I thought was a bit weird given she could afford to buy from the shops. Both my teenagers love getting a bargain from the op shop and even my 17 year old son goes thrifting with his friends and bought himself an $8 pair of cargo pants that retail for $55. I agree what Steve said about housing, when we grew up we had 7 people in a 3 bedroom house and 1 bedroom had my parents in it so we all shared rooms. I would have loved to move a bit further out to a little bit more land however on the bigger land the houses are 4 times bigger than a normal house, 6 bedrooms, media rooms, family rooms etc. however because it all costs so much both parents work all week and then the weekend there is cleaning and maintaining yards that as Steve says the house is mostly empty. I would love a couple of acres with a small or normal house but they don’t exist as they think with bigger land you need a mac-mansion. As for stay at home parents I still feel society has rather negative thoughts because they don’t produce income that they don’t work. Saving on child care, being around for your kids, cooking from scratch etc is extremely valuable but once kids are in school people expect that you have to be in the workforce full time. Full time workers in Australia get 4 weeks leave so two parents working is 8 weeks leave, kids are home from school for 12 weeks holidays plus add a couple of weeks for sick leave you are looking at 14 weeks kids are home. When is the family going to be able to have a holiday together? Kids are tired at the end of term and hanging around the house and having pj days is good for kids and not having to get them to school at 6.30 am on school holidays for holiday care, it’s rough on little ones.

  10. Great Article. I have son who is 16 and I have found over the years the cost does get cheaper as they get older.

    When they get older and start high-school, I have found that back to school costs (Textbooks, Computers etc and activities such as sport take on more costs). These always seem to hit just after Christmas and are typically larger lump sums.

    1. Hmm that’s interesting. I’ve heard many parents say the cost gets bigger as they get older? Maybe it’s because they give in to their kids demands of wanting a whole bunch of stuff? But on the other hand, that should be around the time they start learning about working/earning, saving, decision-making and tradeoffs.

      1. Hi Dave, I also know some parents I know say this. Generally ones who say this are including savings or planned upcoming spending for higher education.

        Some parents want to fully pay the way for there childs higher university or apprenticeship. I have not factored this in as My son is not interested in either path and I would not pay for this either.

        The cost savings I found really started once my son got to High School. These are some of the main savings: No childcare, Teenager will typically eat the same food at meal times as parents, No formula, Nappies, Car Seats. Not changing interests so quickly so items he wanted last longer, Less School excurisons, Can walk or Ride to School by themselves (I dont have to adjust work hours for drop off and pickup). Can work casually to earn some extra cash, he has done Xmas work in a warehouse picking and packing.

        What did increase was the cost of the back to school time. He need more textbooks and equipment than at state school. Some of organised sports needed beter quality gear as it was more elite. However overall it was much cheaper than when he was a todler and in state school.

        I hope this helps.

        1. Very helpful mate thank you!

          What you’re saying definitely makes sense. I’m also not a fan of the whole ‘paying for everything until they’re earning a fulltime income’ style of parenting that many do. The young adult learns nothing, except maybe that their parents are a great source of cash and will always cover things for them. But no resourcefulness, decision-making and so on that comes along with earning, spending, and the tradeoffs that are helpful to learn when becoming an adult.

  11. Great post. Very sensible advice.

    I’ve found that you can spend as much as you want, the kids will probably be just as happy either way. Second hand and hand me downs for clothing, toys and books is a good way to go.

    Also like some other people mentioned the Centrelink Family Tax Benefit is available for couples where one partner is off work to care for the kids. It has been a major help for us.

  12. ‘If we chose not to buy our child every conceivable toy or sign them up to every activity that can be squeezed into a week, complete with photos to share on social media, the assumption was that we were denying our children of happiness’

    Yes!!!! Love this! As a parent to 2 girls I 100% agree with everything said in this article. It is so refreshing to find people of the same viewpoints.

    Your kids will not remember the toys you bought them they will cherish the time you gave them growing up. People forget love and your time is all they crave.

    1. Well said Aysin, thanks for sharing 🙂 On holidays, this is probably a different decision when trying to share their heritage, especially if family are overseas too. So I can definitely appreciate this point of view and it makes perfect sense.

      To be fair, it is possible to learn about other cultures and parts of the world without actually visiting that particular place. Not the same thing obviously, but it can go a long way if parents make it a focus to educate their kids on how other people live etc.

  13. Oops pressed send too early!

    One point I do disagree with is in relation to holidays. We have taken our kids overseas to a country that has a culture completely different from their own in Australia. For us (both being from non English speaking backgrounds), it is important to us that our kids experience cultures and lifestyles they are not familiar with to open their eyes to the world and learn about their own heritage not just via books or media.

    1. I was thinking the same as I read this. We’ve taken our kids (9 and 6) overseas once (to Canada). My mum and sister live there. We’ll also visit Ireland at some point as that is where I grew up. But the thought of say hauling them around Europe at this age seems a bit over the top.

  14. Great article, so many concepts that we know are true but sometimes difficult to put into practice especially when everyone else around you is doing the opposite when raising their kids.
    With regard to the private insurance issue, in relation to maternity cover whilst it cost us close to 6k out of pocket for both kids I would say it’s well worth it for these reasons:
    – I endured complications for one of my pregnancies hence the care of one experienced OB who followed my case week by week rather than going to a public clinic with a different doctor each time was well worth it.
    – I had two c sections for medics reasons, if in the public system they would have been performed by a registrar OB, personally I want someone who is as experiences as possible when I’m having major surgery. So for me, the health pros outweigh the financial cons in this circumstance.

    *My husband is a specialist (not OB) in the public hospital system and we are both very pro public hospital care – we have it so good here in Aus! But I think it’s important to note that with maternity things aren’t as simplistic.

  15. While I agree with these guys it sounds like they (and many) were fortunate due to the housing boom our government continues to support to no end. Some of us who are renting have not built up enough equity to be in such a position. With that said, I agree, kids don’t have to be expensive. The biggest expensive for us is having 1 parent staying home particularly if they are a low income earner (which my wife is). We have 2 kids.

    1. Thanks for your thoughts Danny. To be fair, the home equity isn’t actually helping them save for FI, nor does the equity help them have one partner at home. Their consistent savings rate and keeping their spending under control is what really helps them improve their financial situation over time, and doesn’t rely on property ownership.

  16. All right you’ve convinced me I’m giving this FIRE thing a go 😁 have to laugh at our expenses I just worked out for the four of us though. Housing $7436 a year, food $7843, bills $3982, car $3260, school fees $28433 ! Fortunately we have still quite a bit of income after this but dam that really puts things in perspective.

    1. Excellent! Welcome to the club 😀
      We all start form different places, but what matters is that we just make a start and keep improving as we go. Fantastic that you already have a surplus!

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