33, Pregnant, and Getting Close to ER

[BumblingtoFI]

Thanks for the responses! I'm still not sold on the necessity of life insurance, but the SWR and whether to include your house in your assets make a lot of sense.

I plugged a $66K expense rate to take into account some of the adjustments discussed below into Fidelity's Retirement Calculator and it said I have a 90% chance of success if I work two more years, which seems like a decent outcome. $66K seems like a pretty ridiculous spending rate compared to our cost of living now, but we need to spend more time researching taxes, health care costs, kid expenses, different places to live, etc. It seems like the sensible plan is to keep plugging away at both the job, the life plan, and getting to know our baby. It'll be an exciting couple of years coming up!

Thanks to everyone for the guidance.

BrianB - Thanks for the guidance on the MSP area. I have family in the area as well living in a variety of neighborhoods and agree with your take on living in the city or in close ring suburbs. A pre-WW2 bungalow would be perfect for our purposes and luckily DH has a lot of the experience I lack in assessing the future maintenance needs of older homes. We're completely committed to living in small spaces, it's the where that's the tricky part.

That said, though Minneapolis is a great option we're still not sure if it's where we'll end up. Living somewhere warm and spending summers in MN has definite appeal too

 

[FUEGO]

I would skip the life insurance. Focus on FI for you and not FI for the kid. They would be set if they inherited your $ tomorrow.

 

[aida2003]

First of all, congrats on your upcoming new addition!!

But second of all, I'm VERY suprised that the response that you're OK to quit. OK, I admit, I skimmed the 1st page only, but I'm sure I'll come back to read the whole thread. So, I just felt an urge to chime in that the OP is fine to retire at 33-34 with the $1.5M and no health insurance, but with a brand new baby underway whereas other people are not as OK to retire with maybe smaller retirement funds but closer to their FRA. I think I'll come back to read tomorrow to make sure I'm reading this correctly.

Yes, FUEGO's postings here and his site (I discovered his blog by accident last week when reading another young retiree's blog) are very inspirational, but at least I have to stay realistic when pondering on whether I can do it when I read his thoughts/math.

But if you're a MMM type girl you can definitely do it. I applaud your bravery

 

[Katsmeow]

Hello ER forum,


1) We will move out of NYC and buy a $200K house in cash. The house will cost $3,600 / year in maintenance and property taxes.
2) A high deductible health insurance plan will cost $300 / month
3) Our kid will cost $400 / month
4) We will buy a car for 10K and it'll cost $250 / month for insurance and gas
5) We will see a 10% cost of living decrease by moving to a lower cost area and retiring.

1 - I don't have a problem with buying a house for $200k since that would be easy to do in Texas where I live. I don't know anything about the housing market where you are looking at. On the other hand, $3600 a year for maintenance and property taxes may or may not be reasonable. You need to check on how much property taxes are in your area. Also, what do you consider maintenance costs? Lots of people don't count thinks like replacing the dishwasher that suddenly dies or replacing the roof and so on. If you've been living in apartments, you may be significantly underestimating the cost of home ownership.

2 - Maybe the plan will cost $300 a month. I don't know. Assume that it does. However, you may well have medical costs in addition to the plan. First you will have a deductible and out of pocket costs. Sometimes people don't really focus on how much those can be. Prescription costs can be very high. My daughter takes a prescription that is over $800 a month (yes, there is one cheaper alternative and she was on it -- but then had a side effect that led to her switching to the other medication). And, our co-payment is less than the full amount, still it is a lot of money.

And, while you might be healthy now and think your medical needs will remain low, things change. Your child might have a chronic health condition. Your or your husband might develop health conditions particularly over the next 30 years. In short, you need to be factoring the possibility of medical costs in addition to the cost of health insurance. (And, also consider things that aren't always covered by insurance such as eyeglasses, vision tests, dental, etc.)

3 - I have 3 kids. The youngest is 18. I shake my head at the very idea of a child costing $400 a month. I saw your post that you can't imagine what you spend the money on. What that tells me is that you haven't really looked at the cost of raising children.

Yes, I understand your husband will be SAHD and eventually you will retire. Even so, the likelihood is you will likely have at least some childcare costs. There are going to be situations where you either don't want to bring your child to an event (anniversary dinner?) or it would inappropriate to have the child present. You will likely have to spend some money on babysitting at some point.

Still, I grant you that you probably won't have a lot of child care expenses.

I think the biggest problem I have with your $400 number is really 3 factors.

First - your child is not here yet. You have no idea what costs will be needed to raise your child. When my son was 5, I thought he would go smoothly go to public school and then would go to college. I guess I was partly right -- he is a senior in college right now. But, the path to getting there was crushingly expensive. For example, he needed to be in an therapeutic school for several years. Ironically, going to college was a step down in cost for us.

Each of our kids had expenses for genuine needs (not wants) that we didn't know about in advance.

Second - There are costs to having a child that aren't direct costs spent on the house. How big a house you buy, wanting to have a yard for the child to play in, choosing a house in a more expensive neighborhood because you want to be in a particular school district, higher utility costs, much higher grocery costs (yes, small children aren't too expensive -- but teenagers can eat just as much as an adult), higher travel costs. You may think for example that kids don't add much to utility costs, but in the last few years 2 of our kids are no longer at home. Our utility usage went down by a lot.

Third - While I think the item above would account for all of your $400 a month there are direct costs. Clothing - yes, kids clothes aren't that expensive. That is in part because they need so much of it. They grow out of it long before it is worn out. Activities - I was never all that big into having my kids do a lot of costly extracurricular activities but, for example, my daughter does karate at $125 a month. Maybe your child will want to take music lessons or be interested in a sport. I am not saying that children have to be scheduled out the wazoo and never have any free time. On the other hand, kids may want to take part in at least some of the activities that they enjoy and that their friends partake in. Even if you limit these (and I think you should), there is a cost.

4 - Do you plan to have only one car? While I can imagine some retired couples managing with one car, I can't quite find it practical for a couple with a child, unless you live in an area with exceptionally good public transportation. There are just too many times that some of you have to be in different places and having one car will make that difficult. I understand that isn't the case in New York City, but most of the US doesn't have the transportation options of New York City.

$10k for a car -- maybe. Most people want to have cars with higher safety ratings and safety options if their child will be riding in the car. You might be able to find something in that range with careful shopping. $250 a month for insurance and gas seems low. Basically it doesn't sound you plan to do much driving. But parents often end up doing a lot of driving. DH has been retired since 2010 and I semi-retired at the same time and work from home. We still do a lot of driving, mostly because our daughter is still at home. Also, your child will likely eventually have a driver's license. Expect your auto insurance to go up significantly (I'm talking thousands of dollars more a year).

5 - I think you will see a lower cost of living with moving to a different area. The problem I think is that you are comparing your budget going forward (with a child) to your budget in the past (without a child). The two are not remotely comparable. Kids are really, really expensive (not sorry to have 3, but really expensive).

 

[Bamaman]

Early in my career, I chose to work toward ER by controlling my cost of living. That meant living where housing, property taxes, utilities and state income taxes were ultra low.

After traveling throughout the country for work, I could see living in colder climates was much, much more expensive than living where the weather was milder. My family put quality of life ahead of anything, and that included living in very large houses in great communities.

Do you know you can buy a 4000 square foot house in a beautiful swim/tennis neighborhood in the Atlanta suburbs for $200K-250K? Public schools in selected counties are so good that private schools are not required. It's the same for Houston, Texas.

Other great cities to live in are Nashville, Tennessee and Austin, Texas. There are so many other centrally located cities in the East and South that I cannot note them all.

We moved to NW Alabama for the simple live, and because I have a lake house with a 6 mile sunset view and a bunch of boats.

There are just so many great places to live that don't include 4 months of horrendous weather and cabin fever every year.

 

[hausfrau]

I am a Mpls resident. If I were you, I'd bump up your house budget to at least $240-260K minimum. That will enable you to live in a modest house (although palatial compared to NYC!) near good schools. $200K won't get you much.

Raising a kid in the city is great though. There is so much to do here (even in the winter!) and there is a fantastic park system and tons of bike trails. Our house has a decent backyard, but we prefer to go to the parks in our neighborhood.

The funny thing about the Twin Cities is even the not-so-desirable areas look pretty well-kept and nice compared to other big cities, so online research can be deceiving if you don't know the area.

I think the maintenance costs are reasonable. We live in a 100-yr. old home and have barely spent anything on maintenance in the last 15 years, although we mostly DIY, so the labor is free. YMMV. The only looming expenses in our future are a new roof and maybe a new coat of blacktop for our driveway, but that's pretty manageable (and expected). We have a 1600 sq. ft. house and our heating/cooling costs are reasonable. Electricity is cheap here too.

Be sure go to the MN Dept of Rev. and look at the property tax charts. We don't pay the "retail" price on property taxes because our AGI is low compared to our property taxes.

Your health insurance assumptions seem low to me. I'd research the health exchange and see what kind of numbers you get.

 

[Bestwifeever]

First of all, congrats on your upcoming new addition!!

But second of all, I'm VERY suprised that the response that you're OK to quit. OK, I admit, I skimmed the 1st page only, but I'm sure I'll come back to read the whole thread. So, I just felt an urge to chime in that the OP is fine to retire at 33-34 with the $1.5M and no health insurance, but with a brand new baby underway whereas other people are not as OK to retire with maybe smaller retirement funds but closer to their FRA. I think I'll come back to read tomorrow to make sure I'm reading this correctly.

Yes, FUEGO's postings here and his site (I discovered his blog by accident last week when reading another young retiree's blog) are very inspirational, but at least I have to stay realistic when pondering on whether I can do it when I read his thoughts/math.

But if you're a MMM type girl you can definitely do it. I applaud your bravery

I voted she should go for it because at their ages I imagine she and/or her DH can easily find a job if things don't work out financially. Not the level of job she is leaving in NYC but good enough to supplement the income from their nest egg. Probably harder for people closer to their FRA to step back into the workforce after trying out retirement for a few years.

 

[utrecht]

Its costs $250K not including college to raise a kid? We have a son who is about to turn 16 and there is no way that we have spent anywhere near $250K on him. I have no idea where the government pulled that number from. That's $1157 per month every year from being born until 18.

I'd say including allowance, averaging in Christmas and birthday presents, clothing and things like that, its closer to $250 per month. If you don't have child care expenses, kids are actually pretty cheap to raise.

 

[lereh892]

Re: 250k to raise a kid. How they get the number is they add in things like pro rata portion of health insurance, your house, the car, utilities, etc. If you have a three person household and you spend $4,000 a month, voila--the kid costs $1,333 per month--that's how they do the math.

obviously you would need these things anyway, so they're not truly incremental costs (although one could argue that you got a BIGGER car and house because you had kids).

 

[daylatedollarshort]

We pay almost $300 extra a month just for car insurance for young adult drivers on our policy and that is with no accidents or tickets for any of us. I've shopped around and can't get that down even with USAA. Believe me I have tried. Our umbrella insurance is another $1K a year since the kids started driving. Our experience has been closer to what Katsmeow wrote in terms of cost of kids, especially when they are older and driving age.

I have price shopped braces, too. I am sure some of the cost is due to a high COL area, but I think all added up we spent easily $20K just on braces over the years, maybe more.

 

[Katsmeow]

Re: 250k to raise a kid. How they get the number is they add in things like pro rata portion of health insurance, your house, the car, utilities, etc. If you have a three person household and you spend $4,000 a month, voila--the kid costs $1,333 per month--that's how they do the math.

obviously you would need these things anyway, so they're not truly incremental costs (although one could argue that you got a BIGGER car and house because you had kids).

I agree with you that it isn't a pure pro rata cost, but it certainly not something you would need in that amount anyway.

We once had 3 kids at home. Now we have 1 at home (another who is in college comes home at holidays). So how does that affect our costs? By a lot.

Yes, my mortgage is the same whether I have kids at home or not. But, we live in a smaller, less expensive house than we lived in when all kids were at home.

All of the house maintenance costs, utilities and even insurance are less now than they were when we had the larger house. When our son moved into an apartment near his college last fall our utility usage did go down. Our food bills did go down (of course, in his case, we are now paying for his food bills since he is in college).

When we had 3 kids at home, we needed a larger vehicle than we need now. With 2 kids at home, one of our vehicles is fine for both of them but the other car is not very comfortable for 2 in the back seat. OK in a pinch but not really comfortable.

Certainly there are many easily direct costs of children. Health insurance is more because we have kids on the policy. Vacations cost more.

But, people often don't count the costs where they can't see the incremental cost difference and assume it is nothing. While it may not be pro rata is not nothing.

People often don't think about their auto fuel bill as being a child related cost. Yet, it is. Lots of our driving is and has been related to kids. You don't think of that as a child related cost, but it is a big one. And, you put more wear and tear on your car. A part of every repair and oil change should be attributed to the fact you have children.

In our area, we have some toll roads. In our case, over 90% of what we spend on toll roads is attributable to our daughter.

Furniture - Again, people often don't think of furniture bought for a kid's room as a kid-related expense. Or new sheets, or towels. They think of them as a household item. They are. But, you wouldn't need them without the child. The child's share of home consumables (toilet paper, soap, toothpaste, etc.)

It all adds up.

 

[someguy]

It all adds up.

Not to mention costs that are even harder to quantify. For example, career opportunity cost resulting from the high demands of raising children. Obviously if both parents are fully retired, that's much less likely to be an issue. But even in that case, there are some, such as one's professional network drying up in the chance one might need to go back to work, or want to, taking on only lucrative short-term gigs.

 

[aida2003]

We pay almost $300 extra a month just for car insurance for young adult drivers on our policy and that is with no accidents or tickets for any of us. I've shopped around and can't get that down even with USAA. Believe me I have tried. Our umbrella insurance is another $1K a year since the kids started driving. Our experience has been closer to what Katsmeow wrote in terms of cost of kids, especially when they are older and driving age.

I have price shopped braces, too. I am sure some of the cost is due to a high COL area, but I think all added up we spent easily $20K just on braces over the years, maybe more.

If it's OK to ask how much did you increase your umbrella insurance and at what age of your children? Right now we have a $1M umbrella, but we'll need to think about increasing (double it?) when the kids start high school perhaps.

I think, OP should use her opportunity to work for a few years in NYC and when it's time to start school for the child then consider moving and retiring. I don't think I'd personally want to leave such a lucrative job so early knowing that she will have a small chance to make the same money in the future. I didn't get the impression that she hates it.

 

[daylatedollarshort]

If it's OK to ask how much did you increase your umbrella insurance and at what age of your children? Right now we have a $1M umbrella, but we'll need to think about increasing (double it?) when the kids start high school perhaps.

I think there are many factors that impact premiums, from home offices to what your house is made of to credit scores, so my experience is probably not necessarily indicative of what others might pay in premiums or need for coverage amounts.

USAA has a good page here:

https://www.usaa.com/inet/wc/faq_Umbrella_Insurance_index?akredirect=true

 

[FUEGO]

All of the house maintenance costs, utilities and even insurance are less now than they were when we had the larger house. When our son moved into an apartment near his college last fall our utility usage did go down. Our food bills did go down (of course, in his case, we are now paying for his food bills since he is in college).

In our neighborhood, there's only so small of a house you can buy. And it comes with 3 bedrooms. If you want to live in this part of town and have a yard, you probably won't find a small house with 2 bedrooms. So there's a floor as to how small you can get. Sure you could allocate the cost of those bedrooms to the kids, but I have plenty of single or DINK or retired empty nest neighbors living in these 3-4 BR houses since you can't get any smaller around here.

Utilities are less without kids, but our gas and electric bills are mostly heating/cooling related that don't fluctuate with kids. Water usage - sure. Some electricity and gas for the water heater, sure. What does a couple of CFL's, a cell phone and a laptop use? 50-100 watts combined? = Under $100/yr

When we had 3 kids at home, we needed a larger vehicle than we need now. With 2 kids at home, one of our vehicles is fine for both of them but the other car is not very comfortable for 2 in the back seat. OK in a pinch but not really comfortable.

3 kids fit in the back of our 15 year old civic and accord just fine. The accord is what we take on road trips due to being even more comfortable. Eventually we might upgrade cars (to a slightly more expensive minivan of mid size SUV) since road trips will be the main usage of our cars and hauling even more cargo could be handy. But there's always roof racks that don't add much cost.

Certainly there are many easily direct costs of children. Health insurance is more because we have kids on the policy.

Depending on where you fall on the ACA income scale, kids might actually save you money. Household size and AGI determine your income, and more kids = larger household and bigger subsidies. At lower enough AGI levels you get free State Child's Health insurance (like medicaid plus I guess).

Maybe we're lucky or good at preventing injury, but we average under one sick visit per year, no ER and no broken bones (yet).

Let's not talk about what we might be spending on braces though...

Vacations cost more.

Sometimes. But you might also save money. Our youngest is 3 and that means we aren't going to spend a month trekking across Europe or hiking the Incan trails to Machu Picchu. A relatively short road trip and renting a house or apartment for a week is probably all we want to do with the little guy.

We take cruises, and the kids obviously add to that (around double). But due to them being in school a lot, we travel less than we otherwise would.

People often don't think about their auto fuel bill as being a child related cost. Yet, it is. Lots of our driving is and has been related to kids. You don't think of that as a child related cost, but it is a big one. And, you put more wear and tear on your car. A part of every repair and oil change should be attributed to the fact you have children.

We find as we spend more time doing kid-related stuff, we spend less time driving or spending on our own entertainment. If I'm out till 9 pm for kids' skating night, I'm not meeting friends for drinks, going out to eat, or catching a movie. Sure, we might drive and that cost is kid related (we actually don't drive much due to school in neigborhood and many attractions are walkable or within a couple miles, but most do drive), but it's supplanting spending elsewhere.

Furniture - Again, people often don't think of furniture bought for a kid's room as a kid-related expense. Or new sheets, or towels. They think of them as a household item. They are. But, you wouldn't need them without the child. The child's share of home consumables (toilet paper, soap, toothpaste, etc.)

Ok as to toothpaste, shampoo, toilet paper etc. My kids go through that stuff like crazy (they make "potions" out of the shampoo/conditioner. )

But you can probably get by on the cheap for furniture. Craigslist. Sheets and towels - hand me downs, thrift store, gifts for b-day from the grandparents that don't know what else to get them, etc. Sure you can go pottery barn Williams sonoma ethan allen for furniture and linens or you can get it all for free or cheap.

Just my own personal experience as the owner of 3 children. You can spend whatever you want on raising kids. $400 per month is probably fine. $1000 is probably fine.

 

[pb4uski]

While your current net worth is $1.5, it will be $1.3 after you buy the house... and candidly, $200k isn't going to buy you much of a house in MSP.

You probably need to think through how you will access your 401k monies and avoid the 10% penalty, but that can probably be done with a 72t.

Since you'll be buying an older home figure on a couple hundred a month in maintenance (things break) and then you have major repairs to consider (periodic roof replacements, furnace replacements, appliance replacements, etc) on top of that. Ditto with the car, you'll likely have substantial repair costs with a 10 year old car and will need to replace cars occasionally so you need to factor those cost into your budget.

While healthsherpa.com suggests that your $300/month cost for health insurance is doable you need to include OOP costs in your budget and that might be $3-6k a year or more. Also, health insurance inflation will likely be higher than the general rate of inflation... ditto with OOP costs.

While you have done extremely well, you still have a way to go to fully retire but stay the course. It might be feasible to move to MSP sooner and downshift if you and DH each had part-time jobs, especially if they were close by or if you could work mostly from home.

....For now it seems sensible to keep working/accumulating, settle in with the new baby, and keep working on the ER plan. ...

That makes a lot of sense to me... and be sure to take time to enjoy that new baby.

 

[Katsmeow]

Fuego

I think the difference here is that you are largely talking about where you are now with 3 small kids. So, for you, to say there is no difference in cooling/heating cost whether there are kids or not or to say that electricity costs are the same is based upon your projection of what you think would happen.

In my case, my youngest is 18 and she is the only one full-time at home. I've actually seen in our utility bills how the usage has gone down as kids have left full-time residence at home. I know they use siginificant amounts of fuel because I see the change in fuel usage when they leave.

I know they eat a lot because I see how the food bill changes when they leave. I know how having a teenager on our auto insurance policy costs multiple thousands of dollars a year more, because I've paid it.

And, I'm sure your Honda Civic is fine with 3 small children in the back. Come back and talk to me when they are 3 teenagers. Is it possible? Sure. But we did a lot of road vacations with our kids going in a car of that size with 5 people teenage and up would have been painful (and we wouldn't have much luggage).

My kids didn't have furniture from the places you mentioned. We went to budget stores...but it wasn't free. My point is not that people can't try to economize (which they can) but that this is an expense that people don't usually consider in thinking about the expenses of kids.

As for health - the point is that you don't know what will happen. Even the healthiest of kids can have serious issues. Sometimes a kid needs an expensive medication (one of mine does). In the last 30 days, my daughter incurred medical bills in excess of $20k. Her share of it won't be that since there will be discounts and such which reducing the ultimate out of pocket cost. But, once processed we will have blown right through the in network out of pocket limit. Stuff happens. It is easy to think that kids will never have a health issue, but life doesn't work that way.

 

[daylatedollarshort]

Fuego

I think the difference here is that you are largely talking about where you are now with 3 small kids. So, for you, to say there is no difference in cooling/heating cost whether there are kids or not or to say that electricity costs are the same is based upon your projection of what you think would happen.

In my case, my youngest is 18 and she is the only one full-time at home. I've actually seen in our utility bills how the usage has gone down as kids have left full-time residence at home. I know they use siginificant amounts of fuel because I see the change in fuel usage when they leave.

I know they eat a lot because I see how the food bill changes when they leave. I know how having a teenager on our auto insurance policy costs multiple thousands of dollars a year more, because I've paid it.

+1. This has all been our experience, too. Our costs have increased dramatically as they have gotten older. Even at community college, one text book for one class for one kid might be $200.

 

[someguy]

As teenagers my sibling and I (both very active in sports, including competitive ones) ate a ton of calories 7 days a week. I remember grocery bills over $400 (in today's dollars) per trip, with 2-3 carts full of food. Our mom was a very thrifty person and we didn't eat very fancy or particularly healthy back then.

 

[sheehs1]

Fuego

I think the difference here is that you are largely talking about where you are now with 3 small kids. So, for you, to say there is no difference in cooling/heating cost whether there are kids or not or to say that electricity costs are the same is based upon your projection of what you think would happen.

In my case, my youngest is 18 and she is the only one full-time at home. I've actually seen in our utility bills how the usage has gone down as kids have left full-time residence at home. I know they use siginificant amounts of fuel because I see the change in fuel usage when they leave.

I know they eat a lot because I see how the food bill changes when they leave. I know how having a teenager on our auto insurance policy costs multiple thousands of dollars a year more, because I've paid it.

And, I'm sure your Honda Civic is fine with 3 small children in the back. Come back and talk to me when they are 3 teenagers. Is it possible? Sure. But we did a lot of road vacations with our kids going in a car of that size with 5 people teenage and up would have been painful (and we wouldn't have much luggage).

My kids didn't have furniture from the places you mentioned. We went to budget stores...but it wasn't free. My point is not that people can't try to economize (which they can) but that this is an expense that people don't usually consider in thinking about the expenses of kids.

As for health - the point is that you don't know what will happen. Even the healthiest of kids can have serious issues. Sometimes a kid needs an expensive medication (one of mine does). In the last 30 days, my daughter incurred medical bills in excess of $20k. Her share of it won't be that since there will be discounts and such which reducing the ultimate out of pocket cost. But, once processed we will have blown right through the in network out of pocket limit. Stuff happens. It is easy to think that kids will never have a health issue, but life doesn't work that way.

+1 I have to agree with Katmeows assessment. I had no idea starting out just how expensive kids can be. I also have seen some fairly significant reductions in heating, cooling, water costs as mine left the house and became "independent, not to mention gas usage for cars, being on my homeowners with car insurances, being on my health care, activities with their friends dental and orthodontic and vision, allergy shots, ALL of the birthday parties starting around PreK4 and continuing thru, activity cost at a YMCA and then high school, etc. Until they are a bit older one may not know what sorts of things their children will need.
I felt like I got a huge raise when they became financially responsible for themselves!!

 

[FUEGO]

Any insight on what's driving the heating and cooling cost reductions when kids leave the house? "Close the damn door!" is standard practice at your houses, right?

Hey, maybe I'm in line for a nice fat cost under run on the heating/cooling budget line item once the kids start leaving the house in another 8 years...

The other important thing to keep in mind is that it's only a 18-22 year cost duration and not "forever" like other living expenses a 30-something retiree must budget for. And as for the much higher costs some say you experience once the kids enter the teen years, that's only 5 years (age 13-18) plus whatever you provide during college. I don't say that to minimize the reality of the burden, but rather to put it in the right context.

It's almost better to budget the $400/mo like OP suggests, then add in a big fat lump sum to cover "high costs during teen years" and "college assistance" to the extent that is also in your plans.

Let's say high cost teen years add $10k/yr for 5 years (braces one year, some crazy med expense 1 year, new-ish car 1 year, insurance 2 years, plus misc stuff). All the OP needs to set aside is $25k if retiring around when the kid is born. Let that $ sit for 13 years at 5% real returns and you have the $50k at age 13. $25k represents 2% of the OP's current investment portfolio (minus the $200k house purchase). Not a big deal, but a slight bit more than rounding error.

Our oldest is entering the double digits in under one month (which is hard to believe). We have yet to see any huge costs related to kids. Right now the oldest two are at a friend's house playing Rock Band. I spent $0.20 on gas to pick up another friend of theirs and drop them all off. I'll probably walk to retrieve them assuming sidewalks are ice-free by then. I'll spend another $0.30 on gas later tonight to drop them off at grandma's house.

 

[Walt34]

Any insight on what's driving the heating and cooling cost reductions when kids leave the house? "Close the damn door!" is standard practice at your houses, right?

It was at our house but I still remember Dad complaining loudly about a $30 gas bill. At the time (~1967) the only gas appliance we had was a water heater. The way he acted you'd have thought we were letting the hot water run all day. Well, with three teenagers we probably just about did.

And I remember both parents being astonished at the size of a Jerry's 24" packed sub sandwich I brought home from a local shop for lunch, I ate all of it, and was hungry by dinnertime. This was from the original shop, not the cheap little franchise ones they make now.

I have little doubt that as we moved out the grocery bill grew considerably lighter.

 

[Bestwifeever]

Moneysaving tip for raising children: guide them into a sport in a facility that has showers. The water and energy to heat same savings are enormous.

 

[FUEGO]

I took a look at my water bill. $56/month variable usage costs (the rest is fixed price for a water/sewer connection, trash, recycling, watershed impact and stormwater runoff).

Natural gas for hot water is $15/month.

Heating and cooling run a combined $1000/yr (plus another $800 or so including usage and the fixed connection fees).

That's with 3 kids, washing tons of clothes, cooking 98% of the time at home and running the dishwasher all the time.

Splitting up the variable utility costs five ways, each kid uses about $28/month. I'm still having a hard time getting from $400/month per kid to $1000.

Of course, "Close the damn door!" and "Did you secretly buy a few shares in the power company?" are occasional refrains at my house.

So many of our expenses are fixed costs. Cars, houses, etc. have huge fixed costs and much smaller variable costs.

 

[Walt34]

..."Did you secretly buy a few shares in the power company?" are occasional refrains at my house.

In our case it was true- Dad worked for the power company! That still didn't placate him. Some people are just impossible to please.