If you’re a parent (or a soon-to-be parent) and you’re interested in financial independence, you’ve probably noticed a certain demographic is missing from our little community — Lots of kids.
That’s right, children! If you scour the rockstar finance directory you’ll find 1471 personal finance blogs (as of the time of this writing). Of those blogs, you’ll find that the vast majority of them don’t have families.
It’s true the number of childless households has grown in recent decades, but rest assured that people are still having sex and still making babies. The human race isn’t dying out, and children are far from being rare little unicorns.
Of the women that become mothers in the U.S., the average has 2.4 children. In fact, a full 79% of mothers choose to have 2 or more children.
Again, this data is for the United States only, but the numbers are probably going to be similar across many developed countries.
Based on my own research, I know many families are striving for financial independence but few seem to have reached the elusive goal. Why is that? And how can we help them get to the promised land of financial independence?
The Financial Shackles
One of the prevailing theories about the lack of larger families in our little community, is that children are financial shackles.
While childless couples run like mad toward the goal of financial independence, those with families are (supposedly) tied down by the little financial shackles called children.
That’s the prevailing theory anyway.
I’m not going to lie, kids do cost money. Reaching financial independence with children is harder. It requires a financial skill-level and mental robustness that goes way beyond the average saver.
There simply isn’t a TL;DR version of “Financial Independence for Parents with Multiple Children“. You have to read the whole book, pay less for it, read it faster, and memorize more if it… all while changing a dirty diaper and cooking a nutritious meal.
(Good thing most parents are tough as nails!)
Don’t lose heart because of this added difficulty! It’s not impossible and not nearly as expensive as you might think. Kids are expensive because parents make them expensive. They certainly don’t have to be!
New parents tend to create a mental vision of what their family is should look like — A well-appointed 3 bedroom house in the suburbs. Cute well-dressed kids that go to private school. Music lessons and sports teams. A minivan and annual family trips to Disneyland or Hawaii. And every toy their little prince and princess can imagine… Then, these poor parents go about creating this insane vision.
Of course you can’t reach financial independence quickly if you run a household like that! It’s a very expensive way to raise a family. So why do people do this to themselves?
I believe it’s primarily because that’s exactly what their friends and neighbors are doing. Peer pressure is pushing them down an unnecessarily expensive path in life!
Instead of succumbing to pressure, I’m going to suggest finding your freedom by imagining a different kind of family life. You can create an entirely different household — One not based upon the standards and expectations set by over-spenders. A family life filled with joy, happiness, and the experiences that YOU want.
One of the best ways to start this process is by finding better examples…
Start With Better Examples
Whether your planning a family (or already have a couple kids), finding other families that break the mold is important! Not only because they set a great example, but they can also provide strength and reassurance for families feeling the pressure to socially conform.
Finding good examples in your own local community is difficult — Most families don’t openly share the necessary financial detail. You simply can’t tell if they’re financially independent (or even striving to be FI).
Instead, I recommend reading the blogs of multi-child families that actually made it. Few people are as financially forthcoming as personal finance bloggers! They’re a treasure trove of financial details, frugal living tips, and the joys of living a financially-free family life.
Besides myself, there are actually a number of bloggers that fit this category. You should read these blogs!
Root Of Good — A frugal three-child family that seems to spend most of their time traveling and simply enjoying life. Justin and his wife make it look easy! The blog is a good balance of financials, and detail about how they live.
Tawcan — A FI family with two children living in Canada. Technically he still works, but really doesn’t need to. A lovely family that I’ve actually met in person.
FrugalWoods — Yes, the frugal queen herself! With one daughter and another ‘bun in the oven’, she’ll soon be setting a great example for multi-child families in the near future.
Financially Alert — Michael reached financial independence in his mid-thirties with two children in southern California. Much of their wealth is in real estate and he often displays impressive income numbers. Michael has a goal to reach $10 million before he’s 50!
1500 Days — Mr. and Mrs. 1500 reached financial independence with two daughters and one pet sports car. They have a very funny blog that sometimes delves deeply into the trivial details about how they run their household (think thermostat settings and laundry loads).
Turning Point Money — While his blog is mostly focused on money and investing, TPMoney has two kids and reached financial independence in his mid-30’s.
Freaky Frugal — Mr. Freaky Frugal actually has adult-age children, but he qualifies as multi-child-FI nonetheless! Even though his kids are older, he has years of experience being FI. He reached financial independence and retired from fulltime work in 2012.
Money Scrap — Caroline managed to reach FI as a single mom with three kids before age 55. While she didn’t reach FI extremely early, doing it by herself is a pretty big feat.
Some Things Don’t Change — Slow Dad is a relatively new blogger, but he makes great use of legos! He’s a father of two that’s now semi-retired.
Some of these blogs are more well known than others, but I’ve had the opportunity to interact with each of these bloggers in some form or another. We comment on each other’s blogs, send tweets, and sometimes even meet in person.
The point is, they’re all real people who managed to reach financial independence with multiple children, and they’re perfectly willing to share their advice and experiences.
Find The Economies of Scale
Parents of multi-child families also have additional advantages that childless or single-child families aren’t going to see. I like to call these advantages “Economies of Scale”.
Just like in the business world where huge companies realize lower costs due to their immense size and scale, families can also realize lower per person costs than no-child or single-child families.
Here’s a few of the strategies that we use in my own multi-child household:
Hand It Down
Frugal parents have been using this strategy since the beginning of time — In families with multiple children, the younger siblings would inherit the clothes, toys, and other childhood paraphernalia from older siblings. This strategy works best if there’s a significant age difference between the children.
In our case, the Tako boys are 2 years apart. Hand-me-downs work perfect — Once Tako Jr. #1 outgrows a set of clothes they go into a series of Rubbermaid totes (like these) which are labeled by age. When Tako Jr. #2 is finally ready for a new size, we simply pull out the container, and he’s ready to go.
Before you sympathize with poor Tako Jr. #2 for always getting “the castoffs”, please realize that everybody in our family gets used clothing. That’s right, even Mrs. Tako and I! Nobody gets special new clothes!
‘New’ Is Now A Joke
Have you ever heard the phrase “See, this is why we can’t have nice things!” As a parent, I’ve actually found myself using the phrase. It’s a very dark joke.
Why? When you have multiple kids they develop this incredible ability to destroy anything nice within five minutes. Just got a new couch? Give two (or more) kids 5 minutes and they have it coated in vomit, feces, urine, scratches, glue, fingerpaint or magic marker.
You’ll wish you’d picked up a free couch on the side of the road instead.
Believe it or not, this is an incredible advantage! When you know absolutely anything you buy will be reduced to thrift-store levels in mere minutes, buying new is no longer important. It’s just going to get f*cked up anyway, so why waste the money on new stuff? Old, imperfect, and out-of-style makes so much more sense.
Buy in bulk
Anyone who’s stepped into a Costco or a Cash ‘n Carry knows that it’s possible to save money by buying in bulk. Most small families avoid buying in bulk due to the immense amounts of food sold at those places… but parents of multi-child families have no problem going through large volumes of food, toothpaste, toilet paper or even bulk packages of underwear.
Buying in bulk does save money, but you have to be smart about it. Know what your family can eat (or use), and avoid any unnecessary waste!
The Tako family buys about half of our food from bulk-food stores. Having a chest freezer saves us an immense amount of money by allowing bulk purchases to be frozen (especially when on sale). I track our food inventory closely, shop sales, and even utilize coupons to keep our food costs low. The four of us eat very well on $500 per month.
This one should be entirely obvious, but you wouldn’t believe how often I see modern families fall into the obnoxiously expensive pattern of buying multiple of everything. Yep, that’s right, you DON’T need to buy two (or more) of every toy, activity, or game. The kids can share!
Initially you might see fights about this (our family certainly did), but that will eventually calm down once the children realize there are somethings that are “common” property and others are “personal” property. In our house, toys are designated as “common” property, and we take turns.
Fully Utilize Real Estate
If you look at most modern first-world families, children are frequently given their own bedroom and bathroom… which is absolutely preposterous if you compare this to homes built 50 years ago.
I don’t know when the housing culture changed, but entire families used to share one bathroom, and each bedroom would sleep two or more children. When guests arrived, they would sleep on a pullout sofa, rather than a separate “guest room”.
People were more efficient with their real estate back then. This proves an important point — When you have a second child you do not need to move into a larger home. Just utilize the home you already have more efficiently!
With real estate costs reaching new highs, it absolutely makes sense for families with multiple children to think about going back to some of those “old rules” from days long-past that were simply more efficient.
The Tako family is preparing to do this ourselves. Despite our large home, we technically only need a 2 bedroom 1 bathroom home. We’ve been practicing this for two years despite having significantly more space available — The four of us only use two bedrooms and share one bathroom! It won’t be a big sacrifice when we finally decide to scale down to a smaller home.
In the past, I’ve said that children are one of the best reasons for financial independence. I feel like that’s still very true today. Children and financial independence do not need to be mutually exclusive. It doesn’t get said enough in our little FI community.
While raising a family of any size is a certainly a challenge, achieving financial independence with multiple children is harder. But don’t lose hope or become discourage by the lack of voices telling you “it’s possible”.
It really IS possible! My family is living proof, as well as the handful of personal finance bloggers that have achieved similar success. Don’t ignore these positive voices!
If you’re willing to work a little harder and up your frugal game just a little bit more, you can easily find yourself with a savings rate of 50% or more.
Well on your way to financial independence!