A few years ago, a reader named Steve wrote a fantastic guest-post on How to Achieve Financial Independence with a Family.
That post has since been updated with a few tweaks, but so much has changed since then that he wanted to share a follow-up.
Now that the kids are older, he and his wife’s perspective has evolved and new lessons have emerged. So this is Part Two of achieving FI when you have kids – a continuation of the his family’s journey, with more insights now that they’re a few more years down the track.
And before we get into it, here’s a recap of our reader’s situation. But definitely go and read Part One for a fantastic collection of advice and wisdom on balancing your financial goals with a happy family life.
My partner and I are in our mid-30s, raising our two children in suburban Brisbane.
We both grew up with one parent at home and loved the idea of doing this with our own kids. We realised we could make it happen as long as we kept our expenses modest.
We both worked full-time prior to having kids. We spent relatively little, saving as much as we could to buy a relatively modest house with a large deposit.
Once our kids were born, we shifted our priorities to ensure there was always someone at home with them. When our kids started school, we moved homes in order to live within walking distance of school. Rather than “upgrading” to a massive, expensive house like many of our peers, we moved into a cheaper one.
This move enabled us to pay off our remaining mortgage. Although we’ve switched work patterns a few times, nowadays I am home full-time,
while my wife works part-time. She works just enough to cover our living expenses.
We have a pool of money saved up (mostly in savings accounts, to keep things flexible) and a small amount invested in ETFs. When viewed through a strictly monetary lens, our situation may not seem very impressive by typical FIRE standards.
We don’t have a massive property or share portfolio and our income is modest. But when viewed through another more meaningful lens, we are already living the FIRE dream: we can choose the life we want for our family.
Being able to choose how we spend our time, and having the flexibility to adapt to the ever-changing needs of our family is unbelievably liberating as parents. Many parents exhaust themselves with long, dreary days of work, followed by hectic evenings and weekends crammed with activities.
I am so grateful that we don’t have to live that life. I love the idea of sharing our ideas and strategies with others, in the hope that they can enjoy the same lifestyle we do (thanks Dave for giving us another opportunity for
this!).
Our kids are now midway through primary school (how the time flies!). We wanted to share some more of our experiences and advice for parents navigating the primary school years while staying on the path to FIRE.
One of the key questions parents begin asking themselves once their children are out of nappies (or even sooner) is “which school should I send them to?”
Private school tuition can be very expensive – it’s basically like taking on a second mortgage. If you’re aiming for FIRE, you don’t want to burden yourself with a mammoth ongoing expense unless it’s absolutely necessary.
(By the way: sending your kids to a state school can also be very expensive if you need to move into an affluent suburb. This is because state schools with a good reputation often drive up house prices in their catchment area. What I’m going to say below about private schools equally applies to these kinds of state schools too.)
So, do you really need to send your kids to a private school?
My partner has worked in more than a dozen schools, and tutored students from a dozen more. Her experience has been that the quality of teachers is pretty consistent across both public and private schools. Attending a private school does not guarantee you better teachers.
But then, why do kids at private schools tend to get such good results? Their NAPLAN and ATAR scores are amazing!
Schools that get good results, generally do so because their students’ families are privileged. This is because the most important factor in how well a child does at school is actually what happens at home!
When you adjust a school’s NAPLAN results based on their ICSEA value (basically a measure of privilege), most schools score fairly similarly.
Students at a private school may appear to get very good results, but often those children were already advantaged before they started school.
In fact, a more useful way to assess a primary school’s ability to teach kids stuff is to compare improvement in NAPLAN results between Year 3 and 5. This is rarely (if ever) discussed by parents.
By this measure, even relatively unknown state schools can “score” better than hugely expensive prestigious private schools.
So, if kids in private schools don’t on average get better quality teachers, or even learn more stuff, why did we decide to fork out thousands of dollars a year for one?
There are two key things that we look for in a school.
The most important consideration for us is the school’s culture. The school will be teaching our kids about how the world works, raising them alongside us like a co-parent. What do we look for in a good co-parent?
Do the school’s values align with our own? Are these values embodied by the actions of the students, staff and principal? Do the teachers feel valued and enjoy working there? How engaged is the school community?
Aside from a good culture, we also wanted a school that would suit our kids (this is impossible to know until your child is a few years old, which is why choosing a school before they are even born is a bit silly).
Before making our decision, we visited many schools, both public and private, met with principals and talked to loads of teachers and parents.
In the end, we settled on a (relatively obscure) private school with a culture that resonated strongly with us.
Although we were also impressed with the culture at a few state schools we investigated, we found that our children’s particular needs were more readily accommodated in a private school setting.
However, we strongly believe that most children would do great at a local state school. The key is to ensure the school has a culture that resonates with your own values, and that fits your kids well.
One last thing to bear in mind – if you have to go to work in order to pay private school fees (or to cover housing costs to live in the catchment of a “good” state school), you need to remember what you are giving up.
Don’t forget that what happens at home is the most important factor to how well kids do at school (and life!).
If we both had to return to full-time work to cover school fees, we would be going somewhere else.
Shortly after our kids started school, we moved homes so as to live within walking distance.
Three years on, I simply cannot stress this enough: if at all possible, live within walking distance of your kids’ school.
It just makes so much sense! Here are some of the reasons why:
From a FIRE perspective, there is an obvious benefit here: being able to avoid so many car trips.
Cars are enormously expensive to buy, maintain and operate, so anything you can do to minimise their use is going to help you achieve your FIRE goals sooner.
In fact, living within walking distance of your kids’ school may enable you to live with one fewer household car, or even to avoid owning a car altogether (more on this below).
I understand that living within walking distance of your kids’ school is not always possible, but it’s been such a huge benefit to our family life in so many ways that we would be willing to give up plenty of other things in order to make it work.
After housing, transport costs are generally the biggest expense for families who own a car.
Cars are a huge drain on the family budget. Aside from having to buy the thing, you need to cover registration, insurance, fuel, maintenance, parking fees, tolls and (possibly) fines.
According to savings.com, the average cost of car ownership in Australia is more than $13,000 a year (even excluding loan repayments). Ouch!
There are plenty of hidden expenses too, like depreciation, and opportunity costs from the locked-up capital that could otherwise be deployed to generate income through investments.
Despite crippling the family budget, most people assume the high costs of car ownership are unavoidable.
To escape the expense of owning two cars, we have always been a one car household.
When our children were younger and my partner required our car to get to work, I needed to find creative ways for us to get around without one.
Aside from making use of buses and trains, during this time we did a LOT of walking. The kids and I walked just about everywhere within a 3 km radius of our home.
Looking back now, some of our fondest memories were created simply by walking to destinations. We got to know our local parks, the hidden pockets of bushland and creeks, and our neighbours.
However, once the kids started school, we no longer had the luxury of spending hours getting to and from destinations or lingering as long as we wished at places we discovered along the way.
We moved so as to live within walking distance of the kids’ school but continued to use the car for many of our other regular trips (like getting groceries or visiting friends).
Then, about two years ago, we discovered something that completely changed the way our family got around: the cargo bike.
For anyone unfamiliar with the term, a cargo bike is like a regular bicycle, but with space over the back wheel or in a large box in front for carrying extra stuff – like bags, groceries or kids (or all three!). They’re also usually electric, making it comfortable to pedal up hills with the extra weight.
Getting a cargo bike was transformative for us. It gave us the flexibility and enjoyment of walking, but with a speed more compatible with our now busier schedules.
We use it for trips that are too far to walk, or where it would be too unsafe (or too far) for our kids to ride their own bikes – like getting to extra-curricular activities, visiting friends, going to the shops, travelling beyond the local area, etc.
We have found riding a bike is actually pretty time-competitive with driving for short journeys, as you can often take short-cuts through bike paths and don’t need to spend ages searching for parking.
In inner-city areas with congested roads and good quality bike paths, bikes are often faster and easier for getting around than in a car. There are few things more satisfying than zooming past a long line of drivers stuck in traffic.
In Brisbane, you can also take bikes on the trains, so we can get into the city pretty quickly by combining the cargo bike with a train trip.
And kids LOVE riding on it.
For anyone who lives too far from school to walk there, a cargo bike would be a great way to skip the car chaos and roll right up to the front gate.
In inner Brisbane, using cargo bikes to take kids around is becoming more common as roads get more congested and the city gradually expands its bike network. They are still pretty rare in the outer suburbs (where we are), but I expect in the next 10 years or so, cargo bikes will be everywhere.
There aren’t a lot of times when the weather is a barrier to riding. If it’s storming, we will leave the bike at home or just wait the storm out.
Even hot days in summer are pretty pleasant to ride with the pedal assist battery. I actually find I get sweatier walking around than riding the cargo bike.
There are still times we need to use our car, like if we are travelling to the other side of the city and can’t comfortably get there by bike (or train). But rather than driving our car daily as before, it now only gets used around once a week.
Many families with multiple cars could easily sell one car and replace it with a cargo bike. Those fortunate enough to live in a location with access to quality public transport might even be able to live without a car entirely (and just hire one for the rare times it is needed, like a family holiday).
A good quality cargo bike will set you back at least $5,000. This seems expensive, until you realise that it essentially replaces a car that costs well over $5,000 per year just to run the thing.
Meanwhile, ongoing costs for a cargo bike are only a few hundred a year for maintenance and electricity. Cargo bike batteries only use a fraction of the energy that an EV does to charge.
Swapping a car for a cargo bike would be one of our best tips for families with young kids. I wish we’d bought one years ago.
There is an enduring perception among parents that children need early and repeated exposure to various technologies so that they “don’t get left behind”.
Parents are therefore often eager to splash out on all kinds of expensive gadgets – phones, tablets, laptops, smart watches etc – with an expectation that engaging with these devices will be beneficial for their kids.
These gadgets are also pretty attention-zapping, which makes them handy when you want to keep your kid distracted.
Like if you are out grocery shopping, at home cooking dinner, trying to read a book, visiting friends… well, I guess you could use them all the time. But at least your kid won’t get left behind, right?
Early research into children and technology indicates that kids who spend more time on screens are far more likely to have developmental delays and poorer social wellbeing. This is particularly the case when parents fail to engage with their kids during screen usage.
We have always taken a fairly “tech-lite” approach to parenting. We don’t own a TV, tablet or iPad, and the kids don’t have digital devices of their own.
If we’re not outdoors (which we often are), our entertainment mostly comes from playing games together, reading books or doing puzzles.
We do occasionally watch a movie or TV show together on our laptop, and the kids also engage with select online learning programs for supervised homework.
Despite our (relatively) low-tech lifestyle, our children have had no difficulty picking up how to use iPads and laptops at school, and they don’t feel like they are somehow “missing out”.
Technology develops so quickly that whatever they learn to use now will likely be obsolete in a few years’ time anyway.
Don’t feel guilted into buying loads of expensive gadgets.
If our kids eventually decide they want their own devices, they can save up and buy it themselves.
Before wrapping up, I wanted to highlight some of the perks of continuing to take time off work while your kids are at school.
For parents who stay at home part- or full-time while their children are pre-school age, it is tempting to think of transitioning to school as an opportunity to return to full-time work.
Instead, we saw it as an opportunity to continue flexing our FIRE muscles.
Some of the many benefits we continue to enjoy include:
If you are serious about your kids’ education, taking time off work to be with them in the mornings and afternoons, and being engaged in the school community, is probably the most impactful thing you can do.
Don’t go back to work just because society thinks you should!
I’m very grateful to Steve for sharing his thoughts and experience here, since it’s something I can’t shed light on.
This is an incredibly important topic, since so many people are concerned about it.
Some of you might be wondering about the other aspects of having kids.
Things like housing costs, toys, socialising, medical bills, holidays, and food.
Well, you’re in luck – the first article was full of Strong Money endorsed strategies for all of those!
Some people would read this and just think “Well, it’s easy for them since they paid off their mortgage.” But you’d be missing the point.
They now have a big advantage due to having their mortgage paid off, allowing them a much cushier lifestyle and lower income needs. But remember, they got this way by a few things:
— Minimising their expenses
— Saving hard when they had two incomes
— Downsizing rather than upsizing
— Keeping ‘child spending’ down
All this is what created and continues to enable their current situation.
And remember, they’ve cut work hours from two full-time to one part-time. I think that requires a lot of restraint not to earn more for extra niceties for themselves and the kids (as is the default approach), so I respect the discipline and crystal clear priorities.
Ideally, this works incredibly well if you plan it all out in advance. But maybe you only found FIRE after having kids. In that case, I’d focus on the other strategies outlined in this and the previous FI with a Family post.
Granted, not everyone will want to give up or scale back their career for their children, so the priorities will vary by household. Either way, these two posts give you a philosophy and list of ideas to build a happy and well balanced life with your kids without blowing your finances to smithereens.
Thanks for reading!
How to overcome the traps preventing you from claiming your freedom and living your ideal life.
My thoughts on risk and investing after FI. How I define ‘enough’ and follow-up questions on my geared super strategy.
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Thanks for bringing Steve in, Dave. Such a great post, it was heartwarming to read. Well done on setting strong foundations prior to enable you to spend time focusing on your children. We also did a downsize a few years ago, although we did upgrade the location our current home is modest. It was really interesting to see how people viewed our decision to sell the dream house actually. We value different things to most folk, and the change has been well worth it. It was part of a life restructure to enable us to turn hopes and dreams into reality (extended travel around the world as a family).
We are grateful to our past selves for working hard, and are enjoying the freedom and flexibility of our recent years to live true to our values.
All the best with your journey!
That’s awesome to hear Eve! All you can do is do is live in best alignment with your values, regardless of how it’s perceived by everyone else. I’m noticing that it does actually take some courage to do that – to break from the standard path in general – which many people seem to struggle with.
Great read.
Goes to show you don’t need to have the latest, flashiest, newest things to enjoy a wonderful life.
What life used to be like before smartphones, social media, consumerism, everyone trying to out do everyone else.
100%. Marketing and peer pressure are incredibly powerful forces that most people are unable to overcome.
Excellent sequel to the first article, thanks Steve (and Dave).
Many of Steve’s values echo our own for raising children, and it was lovely to read about another family prioritizing time at home with the children in their formative years, and minimising unnecessary expenses (childcare, toys, clothes, expense extracurriculars). We had a multi-year plan to live within walking distance of our children’s primary school, and look forward to reaping the benefits Steve outlined.
It would be fascinating to have a follow-up down the track when Steve’s children are in high school, and when the cost of schooling and other expenses have the potential to increase markedly.
Really glad you enjoyed the follow-up Anne. Great idea – I’d love to do a Part Three later down the road if Steve is willing!
Thanks Steve and Dave, very inspiring to see a family living life on their own terms and choosing what is important to them and living a life that is in line with their values: that’s what financial independence is all about. You can not put a price on time, quality family time. Time or money – time wins definitely!
Cheers TR – and yes exactly 🔥
For me, with 1 kid in kindy and another on the way, this is an inspirational article so thankyou Steve. This is the kind of life we are working towards.
Bikes are great for school runs. Because she is little, she can easily just sit in front of me on the frame riding up front, you can get a seat off amazon which clips on but i went the DIY route since I originally put it together in a hurry when i needed to. A cargo might be the next step and more sensible
Cheers, happy for you guys!
Thanks for sharing Mateo. It’s great to see other families using bicycles to get around our (unfortunately) car-centric country.
A bicycle with an added kids seat is great if you only need to move one little child around (and if they don’t have much gear to be taken with them). It’s certainly a much cheaper option than a cargo bike, particularly if you can modify a bike you already own.
We also trialled a bike trailer connected to my push bike for a little while, but it is a lot of hard work getting up big hills and can be tricky crossing roads because they take up so much space. I think bike trailers are best suited for short trips mostly on wide bike paths or quiet streets.
I could not thank you enough for writing on this series as being a mother of two who just started on its financial independence journey last year I am often finding it difficult to balance the frugality with spending money for my kids. On the other hand, I am also planning to start a FIRE blog to compensate my earning but I understand that it is more than a full-time job.