Reader Case: Can I Retire on an Office Administrator’s Salary?

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It’s been a while since we did a reader case study, so I thought I’d dig into the old mail bag today and see if there are any interesting ones. Enjoy!


Hello Bryce & Kristy! 
First of all, thank you so much for reading this email!! Love your work!

I read your book & started following your blog back in January 2020 & have been following the FIRE community since early 2018. We may not be your typical reader case since we own a home (& love it) & want to have a kid. (Totally opposite from you guys, haha.) We are very young & live in Minnesota.
I’m 22 and my husband is 24. We are planning on starting to try for a baby in August when I’m 23, and we’re trying to decide which of us will stop working or go part time (one or both of us) or just hold out until we’re FIRE. We are also trying to decide if we should sell a car & whether or not we should put all of our extra money towards paying off our house or towards investing. Basically, whatever will get us to FIRE fastest.   

Here is our current financial info:
I actually have a finance blog (easeyourfinancialpayne.com) of my own where I make monthly financial updates on our journey to FIRE.

  • Our Monthly Income after Taxes: $5,800 
    • I make: $3,700 of it (I’m an assistant/office administrator/insurance agent)
    • My husband makes $2,100 (Managing a sandwich shop)

As of July 1st, 2021 I will become a 1099 person instead of a W-2 so I can control my own schedule & where I work. Lots of flexibility. For my husband’s job he has to go into the store 40 hours a week & run around all day while he works. He works a lot harder than me for less money.

With all of this being said, he really enjoys running around & being busy a lot more than I do, he will most likely want to stay part time even post-FI, even if at another place of employment. I’m also scared of our kid getting really close to the parent that’s not working & resenting the other for not being around/available as much (this happened with me & my parents).

I also will be the one who is recovering & breast feeding so I physically won’t be able to work as much. At 4 months postpartum, my husband will be ready to work, but I may still be mentally/physically struggling to try or want to go back to work..

We currently spend $3,050 a month. 

This includes a $1,200 mortgage payment, $340 car payment, $400 for food, $180 Car insurance, $80 electricity, etc.

When it comes to future baby expenses, I think it will be very low, hear me out.. we have friends and family who will absolutely buy us everything we need & we care about sustainability & saving money, so we will mainly be shopping second hand. We also don’t want to pay for daycare at all & split watching the child between the two of us, then occasionally family & friends. So after doing some research & math, I’m sure our expenses will stay around $3,050/month even after having a baby.

Our Debts: 

  • Mortgage $-127,415.57
  • My husband’s car: $-6,159.62 

The minimum payments are: $1,146.97 for the mortgage & $332.80 for the car. We put a flat $1,200 & $340 towards them automatically. 

Our mortgage has an interest rate of 3.125%. We refinanced to a 15 year loan in September 2020, it was originally a 30 year loan with 4.75% interest in September 2018. We both have always wanted a home & it is actually my childhood home, so it’s very sentimental. I bought it back from the people my parents sold it to back in 2007. 

The car has a very low interest rate, like 2%.

Fixed Assets: 

House: $160,000 (we’ve done a lot of updates)

Cars: $13,500 (2017 Chevy Malibu) & $5,500 (2013 Honda Civic). I’m going by their sell value for cash now, not trade in. We have been toying with the idea of selling a car since I mainly work from home now & we work a block away from each other, but I sometimes have to drive over an hour away for work.. like 1-3x a month now. I’m sure we could figure it out with one car though, but with a baby that might be annoying if we’re both still working. 

Investments:

  • Our Roth IRAs: $40,000 (90% stocks/10% bonds) We’ve had amazing returns over the last 2 years. 
  • Savings: $11,565

We are currently focusing all of our extra money on paying off his car, then we want to max out the rest of our Roth IRA contributions. Then we want to hit $18,000+ in savings to have enough for a 3+ month long family leave after we have a baby hopefully next year/emergency fund.

So we should reach these goals by the end of February 2022, as long as no major unexpected expenses come up.

Let me know if this sounds like a solid plan or if you suggest we try to pay off the mortgage instead of investing. That option may get us to FIRE a lot sooner since our expenses would only be $1,850 a month after the mortgage is paid off! (Even less if we sell a car). So our expenses if we were debt free & sold a car would be approx: $1,700, because no more car insurance, registration, oil changes, gas, tires, wipers, etc. 

Sincerely, BabyOnFIRE??? That doesn’t sound right lol, maybe YoungFIRE?

Thank you so much for reading!!


First of all, while I like BabyOnFIRE as a screen name, I feel that using it would attract the wrong kind of search traffic, so I’m going to go with YoungFIRE.

There’s a few things I really like about this case study. First of all, our reader here is just starting out on their career, so that means there’s still lots of runway and not too much baggage in their financial lives. Also, neither are highly paid tech people making six figures straight out of school. One is an office administrator and the other manages a sandwich shop. Much more relatable, wouldn’t you say?

Aww, look how cute they are…

Before we get into the mathing of the shit, just a few things that jumped out at me from YoungFIRE’s email.

We both have always wanted a home & it is actually my childhood home, so it’s very sentimental. I bought it back from the people my parents sold it to back in 2007.

I’m going to go out on a limb here and guess that YoungFIRE will not be too receptive to the idea of selling their house and renting. Childhood home? Very sentimental? Yeah, this couple ain’t going anywhere.

I’m also scared of our kid getting really close to the parent that’s not working & resenting the other for not being around/available as much

While I understand why you might feel this way, don’t think that this will happen to every kid. I have friends in which one spouse is constantly away for work, and if anything the kids are even closer to that parent than the one they see every day. Heck, FIRECracker’s dad was gone for years doing his PhD in Canada when she was growing up, and her relationship with him is way better than the relationship she has with her mom. Kids bond to parents that love them, so as long as you have a loving relationship with them, the kids are going to be just fine.

When it comes to future baby expenses, I think it will be very low, hear me out.. we have friends and family who will absolutely buy us everything we need & we care about sustainability & saving money, so we will mainly be shopping second hand. We also don’t want to pay for daycare at all & split watching the child between the two of us, then occasionally family & friends. So after doing some research & math, I’m sure our expenses will stay around $3,050/month even after having a baby.

Uh…sure.

While it’s not impossible to raise a kid on next to nothing (FIRECracker’s parents did it), it’s pretty tough. While I highly support all the things you’re planning on doing (leaning on friends & family for child care, shopping second hand, etc.), your child care costs are still unlikely to be $0 unless you’re offsetting your spending somewhere else that I’m not seeing.

That being said, even with all these caveats and the fact that both are still pretty early in their careers, YoungFIRE’s financial situation looks pretty hopeful. Monthly spending of $3050 against after-tax earnings of $5800 means they currently have a savings rate of ($5800 – $3050) / $5800 = 47%. That’s super impressive considering they already own a house and two cars.

I have no doubt they’ll hit their near-term financial goals of an emergency fund of $18k, since their cash balance is already $11,565, so they’re only $6435 off. At their current savings rate, that’s only 2-3 months off. So that’s an easy win.

But what about their FIRE goals? What about retirement? To answer that, we must…MATH SHIT UP!

Paying off the Car Loan

First of all, the car loan. There might be an argument for investing to earn a higher return if the interest rate is super low (which this one is at 2%), it makes zero sense to hold cash in a checking account earning nothing while keeping the debt. Take the cash, pay off the car loan. Do it now.

If we do that, then their monthly costs go down to $3050 – $340 = $2710.

That makes their savings rate $5800 – $2710 = $3090 per month, or an impressive $37,080 per year.

To hit FIRE, they need to reach $2710 x 12 x 25 = $813k.

And finally, after paying off their car loan their starting balance would be $51,565 – $6,159 = $45,406.

Put it all together and we can project they will hit their FIRE goals in…

YearBalanceSavingsROITotal
1$45,406.00$37,080.00$2,724.36$85,210.36
2$85,210.36$37,080.00$5,112.62$127,402.98
3$127,402.98$37,080.00$7,644.18$172,127.16
4$172,127.16$37,080.00$10,327.63$219,534.79
5$219,534.79$37,080.00$13,172.09$269,786.88
6$269,786.88$37,080.00$16,187.21$323,054.09
7$323,054.09$37,080.00$19,383.25$379,517.34
8$379,517.34$37,080.00$22,771.04$439,368.38
9$439,368.38$37,080.00$26,362.10$502,810.48
10$502,810.48$37,080.00$30,168.63$570,059.11
11$570,059.11$37,080.00$34,203.55$641,342.65
12$641,342.65$37,080.00$38,480.56$716,903.21
13$716,903.21$37,080.00$43,014.19$796,997.41
14$796,997.41$37,080.00$47,819.84$881,897.25

…14 years.

Now, that might seem like a long time, but remember, they are just starting off in their careers. YoungFIRE is only 22, so full FIRE being 14 years away means they get there at 36. That’s still decades earlier than everyone else, and only a few years later than us!

Accelerating Mortgage

So 14 years is pretty damned good, but let’s see if we can do better. What if they supercharge their mortgage payoff schedule and try to kill their home loan as quickly as possible?

Now, generally with a mortgage rate at just 3.125% traditional financial advice would be to not accelerate it, since you can make more than that from investments, and that would be true if you were trying to optimize total net worth. However, the math behind FIRE doesn’t measure total net worth, it measures time to retirement, and in that context there is a situation where it can make sense. Specifically, if those accelerated payments are enough to pay off the mortgage completely before you hit FIRE, then it gives you a massive boost in your time-to-retirement number. Let me demonstrate.

OK, so let’s say that YoungFIRE pays off the car loan, builds up her $18k emergency fund, and then starts throwing every last dollar towards their mortgage every month. How long will it take to kill the mortgage?

I plugged her numbers into a debt calculator, and it projected 31 months. Taking into account the extra time it would take for the car loan and emergency fund, that means they could be completely mortgage free in just 3 years!

This has a major impact on her FIRE target. Because now, without her car loan and mortgage, her monthly costs drop to $3050 – $340 – $1200 = $1510 per month. To support that through passive income, her FIRE target is now $1510 x 12 x 25 = $453,000. Recall that before, we were trying to hit $813k, so her finish line just got a lot closer.

But nothing in life is free, and to get here she had to delay saving and investing for 3 years. So she moved the finish line closer, but she was forced to stand at the starting line. Two forces are opposing each other, but which will win? Well, according to the math…

YearBalanceSavingsROITotal
1$45,406.00$0.00$2,724.36$48,130.36
2$48,130.36$0.00$2,887.82$51,018.18
3$51,018.18$0.00$3,061.09$54,079.27
4$54,079.27$51,480.00$3,244.76$108,804.03
5$108,804.03$51,480.00$6,528.24$166,812.27
6$166,812.27$51,480.00$10,008.74$228,301.01
7$228,301.01$51,480.00$13,698.06$293,479.07
8$293,479.07$51,480.00$17,608.74$362,567.81
9$362,567.81$51,480.00$21,754.07$435,801.88
10$435,801.88$51,480.00$26,148.11$513,429.99

Paying off the mortgage actually wins! Even though she was forced to pause her savings for 3 years, the closer FIRE target means she gets there in just 10 years versus 14! So now we’re looking at a retirement age of just 32.

But wait! There’s more!

Partial FIRE

Her husband has expressed a desire to keep working part-time even post-FIRE. That’s great because clearly somebody doesn’t hate their job as much as, say, FIRECracker did when she retired. That’s also great because even a little bit of continuous income has a profound effect on your FIRE projection.

YoungFIRE’s husband makes $2100 a month after-tax right now. Let’s say she retires and he goes down to part-time, bringing in just $1000 a month. $1000 a month, or $12,000 a year doesn’t sound like much, but when you’re talking about FIRE it has a huge impact. Because again, it reduces your FIRE target even further.

Assuming they pay off their car, their house, and the husband continues working part-time, their monthly expenses collapse all the way down to $3050 – $340 – $1200 – $1000 = $510 a month. At that spending level, their FIRE portfolio only needs to be $510 x 12 x 25 = $153k. And they would hit that…

YearBalanceSavingsROITotal
1$45,406.00$0.00$2,724.36$48,130.36
2$48,130.36$0.00$2,887.82$51,018.18
3$51,018.18$0.00$3,061.09$54,079.27
4$54,079.27$51,480.00$3,244.76$108,804.03
5$108,804.03$51,480.00$6,528.24$166,812.27

…in just 5 years! Holy crap, she’d potentially be able to retire at just 27 years old! On an office admin and sandwich shop manager’s salary! How the Hell did that happen?!?

Conclusion

Some case studies I can kind of guess how the numbers will look before I start doing them, but this one took even me by surprise. By paying off their car, house, and the husband going down to part time, this couple might be able to retire before the age of 30!

Now, the big caveat to all of this is the extremely questionable assumption that they’ll be able to raise a kid for $0. Again, FIRECracker’s parents managed to do it for close to that, so it’s not impossible, but if you recall from our book, this involved her mom working at a Chinese restaurant and feeding her with kitchen leftovers, she never owned store-bought clothes (everything was either a hand-me-down or sewn by her parents), and until she was a teenager she never had her own bedroom. So again, it’s possible, but not easy.

So I think the real answer lies somewhere between the 5 year and the 11 year projections, where part of the husband’s part-time earnings goes towards the additional cost of the child. Can they raise a child on $0 a month? Probably not. Can they do it on less than $1000 a month? I’m much more confident on that statement. Plus, they would be eligible for the child tax credit, and earned income tax credit, and other things that will help as well, and aren’t modelled in any of these scenarios.

So there we are. What do you think? Do you think these numbers are realistic, or have I been smoking the wacky tobacky (again)? Let’s hear it in the comments below!

And of course, if you want to follow YoungFIRE’s journey, be sure to check out their blog!


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63 thoughts on “Reader Case: Can I Retire on an Office Administrator’s Salary?”

  1. I love reading your breakdowns. But in my experience something unexpected always arises such as, one or both cars will need maintenance like brake and or rotors replaced = in some cases $700, dental and medical expenses (even just preventative will cost money), unexpected home needs, your childs potential special and unique needs, education etc. So agree with you there on child needs. So I was wondering if meeting those unanticipated events comes out of the emergency funds.

    1. Yeah, this jumped out at me. We had to paint our house and put a new roof on it (…and buy a car) in a two-month span this past summer. A shiny new VW, gorgeous red house, and roof that we don’t have to worry about until we’re in our 60s are all nice things but watching $50k evaporate sure wasn’t. Houses, man.

    2. Absolutely, things always pop up. Right now we have the extra income, but if it is larger, that is what our savings account is for. Worst case scenario is we work a bit longer, or my husband picks up more hours post FI.

    3. That’s exactly why the emergency funds are a must-have. It’s not just to cover known monthly expenses. It’s also to handle the unexpected expenses.

    4. Yes, unexpected costs will always be an issue, especially with a kid, but an emergency fund held in cash is the best way to prepare for stuff like this. Fortunately, she has that in her plan, so that’s good.

  2. $180 Car insurance

    ——-

    Why so expensive? You should definitely shop around.
    We paid $58/month for three cars, with full coverage (100/300, collision, comprehensive, etc.)

    1. I think it’s because of their age. I was paying more than that for one car when I was under 25. Now, my car insurance is around 35$/month for one car.

      When they will be both above 25, their car insurance will drop significantly.
      Another reason why not to purchase new cars when you are young.

  3. It’s an interesting story that shows that anyone can achieve FI if they really want to and work hard for it.

    They spend very little and their house is very affordable.

    Eventually, the key to success is “compounding returns” on investments. In this example, we can see that this couple currently earn $69,600 per year. By saving aggressively for about 10 to 15 years, they can build up a portfolio that generates around $47,800 in annual returns, which will eventually overtake their “earned income”.

    Obsiously, there is no “guarantee” on investment returns. Investments in equities (90% of their portfolio) over the next 10-15 years can do well or bad, depending on the economy and mood of the markets. But the estimated rate of return is conservative at 6%. If they can earn 8% or 10% over that period, they can even do better than that.

    Personally, I would feel more confortable for FI for two persons on 882K$ (scenario 1) than 513K$ (scenario 2) or 167K$ (scenario 3). But it’s up to anyone to decide what is best for them.

    Note that in scenario 1, they can reach FI more quickly if they take a portion of the investments to pay off the mortgage when they are ready to RE. Since the mortage will be smaller at the the end of the term, we can say they reach FI at year 9 in scenario 1. ($502,800 – $453,000 : $49,800 available to clear the mortgage).

    Another win for the house ! 😉

    Only thing I’m not sure about their case is if they are able to sustain such low level of expenses over long periods of time.

    My guess is that children are not that expensive, but they not completely free. And the house will probably need maintenance at some point in the future. Car will also have to be replaced, etc. Not sure if their budget include enough room for all of this.

    But they have plenty of time ahead of them to refine their budget. They will be able to adjust if they need to.

    One final word on their car loan. I’ve made the same mistake when buying my car a few years ago. I took a 0% loan thinking it was a good deal.

    There is two problems with this reasoning :

    – first, there is nothing for free in this world, so if banks make you a 0% or 2% loan on a car, they have make their money elsewhere. In this case, they charge a “origination fees” to the car dealer to make up for the difference. So, when you pay cash for that same car at the car dealer, they are willing to deduct a big chunk of money off the price of the car. Sometimes up to $5,000, but it depends on the value of the car.

    – second, when you don’t pay cash for a car, you tend to overspend on it. In my case, I probably paid 10K$ more than I would have if I would have paid cash for it. I’m happy with my car. It’s working well. But a car 10K$ less would also have done the job. And I would now have 20K$ more in investments today since this amount would have grown through investing during that time.

    I’ve learned from my mistakes. All my future cars will be paid cash in full.

    1. I think the other key to this is they are modest incomes but live in a low cost area. As someone who lives in a high cost area, I see a lot of people with average jobs in high cost areas who probably should move elsewhere. I think people stay because family & friends are there, or just out of habit. But sometimes you have to throw out the comfortable and familiar. A lot of people overlook the less glamorous and more affordable areas, which is a shame, because your everyday quality of life in these areas can be a lot better and less stressful.

      1. Yeah, there are so many people in Toronto that are like “this sucks, I can’t afford to live here with my minimum wage job. The government needs to do something.”

        And my response is “Why the Hell would you live in Toronto if you’re making minimum wage?!?” Usually the reasons are family, or familiarity, or something, but it’s still not a good enough reason to justify that choice.

        1. Yeah, that’s what I see here in Silicon Valley, too.

          For most people, Silicon Valley isn’t a place of opportunity if you have office administrator / retail manager type jobs. That’s doubly true if you want kids. But people are afraid to walk away from what is familiar to them, often to their detriment.

    2. Oh, interesting. I didn’t know that there was such a large “finder’s fee” on car loans. Another reason never to touch those things with a 10 foot pole.

      1. Yeah. There are a lot of “hidden fees” in the banking world. When something looks overly generous, take a step back and think about how they can make their money. If they don’t charge anything or if their fees are too low, there is probably something else going on.

        I just found a blog than give some more details about this if you are interested :
        ttps://www.canadadrives.ca/blog/car-finance/0-car-finance#drawbacks-of-0-financing

  4. That would be great it they could hit any (or in between) of the sample calculations described. Their biggest risk is gonna be “lifestyle creep”. Once the kids starts getting older, the temptation for “keeping up with the Jones” becomes massive (“needing” an SUV to get to/from soccer matches, vacations to Disney land, etc). If they can resist, they definitely have a very good chance at FIRE. I love seeing people who’s income is much closer to the median being able to retire early.

    1. Thanks! If we can do it, anyone can. I’m not worried about keeping up with the Joneses, trust me, we are great at not buying our wants and keeping our spending low. We don’t pay attention to what others are doing & what others have.

  5. On the scenario where they reach FI in 10 years, shouldn’t the time frame be 13 years in terms of age? Starting at age 22, pay off mortgage until age 25 – plus 10 years, FI will be at age 35. Did I miss something there?

    Anyway, no matter which plan they choose they are clearly on the right path. Good work guys!

    1. Yes, good point. We live in Minnesota where they have MNsure. It’s for people who are lower income or self-employed. We can get health insurance through there for sure, especially if only one of us is working making only about 36k/year before taxes and we have a kid. (I’m actually licensed in life & health insurance in MN)
      We’ll either get super discounted insurance or free.
      Also, my husband has the option to get it through his job, his boss is super flexible & trusts & relies on him.

        1. MNsure is separate from the ACA.
          Here is some info from their site:

          “MNsure is Minnesota’s health insurance marketplace where individuals and families can shop, compare and choose health insurance coverage that meets their needs.

          MNsure is the only place you can apply for financial help to lower the cost of your monthly insurance premium and out-of-pocket costs. Most Minnesotans who enroll through MNsure qualify for financial help.

          Also available to those who qualify are low-cost and free health insurance options provided through government-sponsored health insurance programs Medical Assistance and MinnesotaCare. If you qualify for and enroll in one of these programs, your health coverage is managed through the Department of Human Services.”

  6. Hi just my humble opinion but if they delay having kids a few years, they could FI even faster. They are still very young and could actually work more hours plus rent out the extra rooms in their house to almost double their monthly income. Which means they could actually pay off all their debts incl mortgage in 1.5yrs. Another year of savings for their emergency acc and than have kids with both holding part time jobs to allow them to spend equal time with their kids but still building on their savings. They will only need 1 car than and no daycare costs.

    1. We want to have a baby next year, so we’re sticking to that for now, but a lot of that is out of our control. We only have one car now and are planning on at least one of us going down to part time, if not one of us not working, or both of us working only part time, after I give birth.

  7. OMG I decided to read your blog like usual and then saw my own face??? Thank you so much for doing my case! I immediately freaked out and grabbed my husband. I swear that life is a simulation, anyway..

    Yes, we do not want to sell our house, that was a correct assumption haha.
    And thanks for the examples of working parent-kid relationships that are great too!
    I know it would be fine, but I guess that little nagging fear popped in my head while writing this.

    How I got the “$0” increase in child care costs: we actually paid off my husband’s car & sold it! So that just made our monthly expenses go down by $540/month! ($340 car payment & $200 in misc maintenance & gas on average) We actually sold his car for more than we were expecting, $15,800! We invested $9,000 & saved the rest. We also cut out a few smaller things, so our monthly expenses are now, on average, $2,400/month. So we are guessing after having a kid, that will go up again to the approximately $3,000/month! -to be safe, but we’re hoping it will be less, since again, we won’t have to pay for childcare & won’t have to buy that much, but we’ll see!
    Sorry that I wasn’t too clear about that, hopefully that makes more sense!

    Oh, also my husband got a raise! So he makes $2,400/month now after tax.

    I wrote this to you guys about 2 months ago, so here are our numbers right now after paying off the car & selling it:

    Savings: $20,606 (Emergency & baby fund)
    Invested: $49,628 (Roth IRAs)
    Debt: -$123,648 (Mortgage)
    Monthly Expenses: $2,400

    All we are doing now is focusing on paying off the mortgage & then will max out our Roth IRA contributions each year, which we already have for 2021.

    Thanks so much again! I never expected you guys to do my reader case, let alone promote my blog! It means the world!! -I also have an Instagram I post some updates on @easeyourfinancialpayne

  8. I like this reader case as it’s more typical of the American family. Most families have one working spouse while the other stays home with the kids. This makes FIRE harder but not necessarily out of reach. This is something I’ve tried to focus on on my blog. Reading stories of two engineers with no kids making a lot of money and retiring early may be fun, but it’s hard to relate to.

    Also As someone who just recently had a baby. It’s not hard to keep expenses down to almost zero. We got a lot of stuff second hand from facebook marketplace or friends at church and we cloth diaper. Hope this is encouraging, YoungFIRE.

    Where’s-the-fire?

    1. LOL, what America do you live in? I know very, very few couples who have a full-time stay at home parent. TBH even the few that I can think of have a significant side hustle they do at home for some income.
      Maybe a generation or two ago this would be true.

      1. I live in the Midwest where that is much more common. According to the BLS Among married-couple families with children, 59.8 percent had both parents employed. So that’s over 40% of family have a stay at home spouse. I also read that the percentage of parents who are staying home with their kids has risen 60 percent since 2019.

      2. I think the two posts above really show how we all live in bubbles. The people in the coastal metro areas can’t imagine 1 parent staying at home. They don’t realize how frantic their lives really are. The people in the Midwest think most people have parent stay at home, at least until the kids get into school. Sure, they have to put up with crappy weather, but otherwise, their everyday lives are a lot less frantic. We need to get out of our bubbles more!

  9. What an admirable young couple. I would suggest putting the emergency fund on the mortgage given the interest rate is higher and just let the car loan naturally pay off with the repayments they are currently making.

    In terms of child costs, my rule of thumb is that everyone underestimates the difficulty of every element of parenting except costs, which are usually vastly overestimated. However, I think YoungFire may be the first example of someone doing the opposite! Kids cost some money no matter how frugal you are and how many second hand shops you want to frequent, however, the costs are often partially offset by the lifestyle changes that are required by parenting (you go to fewer events, fewer restaurants and holidays are usually shorter in length and close to home). What I would suggest though, is that all those people saying they will help you out with childcare may not know exactly what you’re expecting them to do or how often, may themselves find they don’t enjoy doing so, may have a change in job or living arrangements that mean helping you is more difficult and also, even if none of this applies, you may find you don’t wish them to look after your kids as they have an approach that you find difficult to tolerate. I would take whatever help you perceive as being offered to you and assume less than half will materialise. This is not being cynical – this is just being realistic. Project your expenses based on that scenario.

    1. Totally, but the nice (?) thing about having kids before you hit FIRE is that you’ll have some time and experience figuring out your parenting style, and then you can use that experience to update your spending estimates. Again, I suspect that the “real” number will be between Projection #2 and #3, as I highly doubt they’re the “hire a nanny and send them to Montessori school” type of parents.

      1. They’re are a couple of other nice things too (like the frequent reminders that your sense of smell and your hearing are top notch)

  10. Kudos to YoungFIRE on all their progress! We are currently a family of four with one car, and this is saving us money.

    As a parent of two kids, I recommend budgeting for some child expenses even if you are not “keeping up with the Joneses.” The updated comment with about $600 per month sounds like a good start. Even with 1-2 parents home, we pay for our youngest to attend a part-time preschool. She is really thriving in this environment, and our preschool cost in Ohio ranges from $250 – $450 per month over 10 months a year. I enjoy the range of FIRE blogs, so you can find writers who address child costs. (Frugalwoods is the first one that comes to my mind.)

    1. Great point! Child care costs are so variable and based on individual parenting style, it’s nice to hear from people who are in the trenches, so to speak.

  11. You are endeavouring in the adventure of your lifetime. Make it count. As a parent I can tell you that children are the biggest gift in life. Give them a good life and enjoy life yourselves as well. Years will fly (guess you head that before, it doesn’t “sink” until it’s happened) invest in enjoying them. Reaching retirement early but not enjoying life may not give you and your child the fulfilment you are after. Not having the money to support it joining a sport or a trip or the movie night with friends, is that what you dream off? Stay prudent but budget some money for enjoying life. You only have one to experience.

  12. As a parent of three young kids, I just thought I would mention some regular child costs we’ve experienced, not related to daycare: diapers/wipes, formula (if can’t get enough breastmilk), school books/supplies, school breakfast/lunches (maybe you will qualify for free lunches), activities/sports/pictures, medical co-pays/deductibles for emergencies or problems, birthday/Christmas gifts or parties, haircuts, life insurance? As mentioned earlier, kids don’t have to be expensive if you can avoid daycare, and all clothes and supplies are provided by family and friends, but I find it really hard to believe they will be $0.

    1. Yes it is not realistic, nor frankly polite, to expect others to supply 100% of your kids clothes, etc. You will probably get a lot when they’re a baby, but as said above costs won’t be zero.

  13. So, I went to their blog and reviewed their August update:

    “ Our Net Worth has been going up by $10,000/month for the last 4-5 months straight, this makes it easier to project where we’ll be at financially in the future. For example, that means we should hit $200,000 Net Worth by the end of April, 2022. Of course, there are things that can pop up & derail this, or unexpected money that could make us reach this goal faster, nobody knows.”

    How does your net worth go up $10,000/month when your employment income is what it is (much less than $10,000/month and their investments balances amount to a little more than $50k? Something doesn’t make sense.

    I have a bit more life experience than this couple (actually, their combined ages are my age) and just under $1.7 million invested in index ETFs 65/35 equity/fixed income. For 2021, my net worth has grown, on average, just a bit over $30,000/month. Therefore, to have your net worth go up $10,000/month, I’m going to say you need about $560k-$600k invested plus your employment income to keep that up.

    Are you counting your home value increasing in that net worth? If yes, that would sound a bit naive. On the other hand, maybe I’m missing something here.

    I like these stories however I always wonder how naive people are falling prey to recency bias.

  14. Does the current mortgage payment of $1200 include property taxes and insurance? If so, then those costs would need to be added back into the analysis.

    I wish I would have heard about FIRE when I was 22…I probably could have retired by now! (I’m 35).

  15. I just want to say thank you for all the comments & support on my blog from this!

    I know it’s hard to say for sure how much certain expenses will be for us 5-11 years from now (child costs, property taxes, etc.) & nearly impossible to predict where our net worth or investments will be at, at any point in the future. None of us know where the market will be at 5 years from now compared to today. Heck, one of us could lose our job and completely derail this, you never know.

    Basically, I just want to pay off the mortgage & keep investing. That was my main question for me submitting my reader case: If I should use my extra income to pay off the house or invest, as we can see, paying off the house lets us hit FI, or Partial FI if you want to get technical, faster, in about 5 years & I’m cool with that.

    I never thought this email to them would see the light of day, so I didn’t explain things as well as I should have & was a bit all over the place.

  16. Crushing debt fast will be solid platform for a successful financial future, if the money left over is invested & saved wisely without fail. FireCracker’s assessment above clearly shows that…and I have done that too.

  17. Hey guys! Just lost my job unexpectedly today so totally disregard everything, go give my blog (easeyourfinancialpayne.com) and easeyourfinancialpayne Instagram a follow if you want to help me out & watch me navigate this new challenge and chapter of my life.
    Thanks! This has been one of the craziest weeks of my life, more to come on the blog & Instagram..

    1. That sucks. Go get another one quick. Everything will be fine and you’ll continue on the path you started on. Don’t let employers determine your goals and your life. Find the employer that will allow you to have the life that you want.

      Obviously, don’t say that to them. Employers are looking ideally for employees that dedicate their life to them and that will do whatever they want or need for the business to do well. If you play the game well, you will be fine.

      I’m not sure how the “FIRE” movement is perceived amonst employers. My guess is they don’t like it. Keep it “low profile” if you need to. Remeber that everything you post online with your real name is accessible to anyone, including future and former employers…

    2. Oh no that’s dreadful. It probably feels sucky but someone as intelligent, open to criticism (judging by how you’ve handled yourselves in these comments), pro-active (starting your own blog) and mature as you are will pull through this relatively unscathed quite quickly.

      The very best of luck to you.

      1. Thank you so much! That really means a lot.. saying I’m intelligent, mature, open, & pro-active.
        I will be adding updates on my blog. Just using the weekend and Monday to collect myself.
        I don’t think this is a coincidence, I’m going to use this time while I’m on unemployment to work on my blog & Instagram a lot more. If it doesn’t work out, I’ll get a job again.
        Thanks for the well wishes!

        1. Have you considered making your blog anonymous? Perhaps they saw this post or something on your blog and wanted you out before they had to cover your maternity? If so, you’re better off without them anyway but perhaps protect your identity until you’re closer to FI?

          1. No, it has absolutely nothing to do with this or my blog. They messed up on their end. I can’t say any details, at least not until it is resolved, but I am getting a lawyer because they’re trying to violate my rights. They didn’t want to let me go, but had to as a last ditch effort to protect themselves, hoping I wouldn’t know my rights.
            That’s all I’m going to say on the matter.

            1. Glad to hear the blog was not the problem. I like to see people telling their story on the way to financial independance. I wouldn’t want companies to deter their employees from sharing their experience.

              I’m not sure a lawyer is the best solution in your situation. If you find a new job in a month or two, you can sue for the loss of income for this period, minus any severance they already paid. And if you can get unemployment insurance during that time, you may also have to reimburse that amount if you win.

              That’s another advantage of being financial independent. You have the means to take care of yourself during that period and think about what’s best for your future. You are not dependent on the will of a bad employer and you are less likely to be harmed by them. But that also mean you will have less to claim from them in term of financial damage.

              Anyway, it’s your decision. It’s up to you to take the actions you deem more appropriate in your situation.

              If it was myself, and considering the little I know about your situation (ie. almost nothing), I would just move on and take the opportunity to find a better job. I think you deserve to work with better people anyway.

  18. Hi FC,

    I believe that one can retire on an office-administrators remuneration taking into consideration of the minimalist lifestyle.

    WTK

    1. I know this was meant for FC & Wanderer, but yes, Minimalism is key when you have a lower salary & most things you do buy/get to be second-hand. It will help anyone pursuing FIRE, no matter what income though.
      Also living in a low cost area for sure.
      Not the lifestyle for everyone, but then they’ll have to work longer.

      Thanks!

  19. Utilities jump out at me as an unaccounted for expense. In a small house in a similar to slightly warmer climate we have monthly electric bills around $60 plus gas bills around $250 (in winter) plus water and sewer around $120, stormwater, trash pickup… It adds up to $3500+/ yr. Not sure if you have this budgeted, but it’s substantial.

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