FIRE and kids

[Byb747]

DW and I are on our way to FIRE where I will "retire" in 5 years at the age of 50 and DW will work about 10 more years and retire at 55. We have two kids ages 4 and 5.

- How do you talk to young kids at this age about FIRE?
- How do you raise them to be mindful of spending and saving?
- What to say when the inevitable questions comes...how come you don't work when other parents work.. lol

Just looking for tips and shared experience from the people in this community!

Thanks!

 

[DawgMan]

DW and I are on our way to FIRE where I will "retire" in 5 years at the age of 50 and DW will work about 10 more years and retire at 55. We have two kids ages 4 and 5.

- How do you talk to young kids at this age about FIRE?
- How do you raise them to be mindful of spending and saving?
- What to say when the inevitable questions comes...how come you don't work when other parents work.. lol

Just looking for tips and shared experience from the people in this community!

Thanks!

I will give it a shot...

- How do you talk to young kids at this age about FIRE? It appears your kids will be 9 & 10/14 & 15 when you and your wife retire respectively so while the kids are still younger, I am not sure it really takes a specific conversation to keep them from being confused. I'm old school, so we had our kids baby sit/odds and ends type jobs when they were 14/15, get starter jobs when they were 16 thru college to cover some spending $$ as well as learn about $$.

- How do you raise them to be mindful of spending and saving? See above. Give them some responsibility/accountability with both earning/saving/spending $.

- What to say when the inevitable questions comes...how come you don't work when other parents workHonestly, you will most likely be filling your days somehow and managing your portfolio so perhaps you can tell them you are an Investment Manager?

Ok, don't take this the wrong way as I don't want to rain on your parade here, but coming from real experience, I think it is VERY risky to go cold turkey RE until kids are at least in or out of college.

I plan on launching end of 2019 when I am 55. I have 4 kids and my youngest graduates from college next year so my heavy lifting will be complete. Let me tell you what kids cost from age 4 and up (in my case X 4)... kid sports & travel, braces, cars/insurance/accidents, private school (sometimes a situation warrants it even if it wasn't in the plans), "unfortunate situations" that may require legal help, college/fraternities/sororities/study abroad, weddings (2 of my 4 married). Perhaps you have all of this accounted for? Don't get me wrong, I read about others on this site who have done it, but for me, particularly as the only income provider for the last 28 yrs, it would have been very difficult to plan for these costs at age 4/5. There were many things I "planned for" regarding kid's expenses in the early years and things I said I would/would not do, but life has away of playing out differently most of the time. Eg. I swore I would have only 1 or 2 extra cars when my kids were driving. Guess what, I had 6 cars in my driveway!

No wrong/right answer... good luck!

 

[tb001]

I will give it a shot...

- How do you talk to young kids at this age about FIRE? It appears your kids will be 9 & 10/14 & 15 when you and your wife retire respectively so while the kids are still younger, I am not sure it really takes a specific conversation to keep them from being confused. I'm old school, so we had our kids baby sit/odds and ends type jobs when they were 14/15, get starter jobs when they were 16 thru college to cover some spending $$ as well as learn about $$.

- How do you raise them to be mindful of spending and saving? See above. Give them some responsibility/accountability with both earning/saving/spending $.

- What to say when the inevitable questions comes...how come you don't work when other parents workHonestly, you will most likely be filling your days somehow and managing your portfolio so perhaps you can tell them you are an Investment Manager?

Ok, don't take this the wrong way as I don't want to rain on your parade here, but coming from real experience, I think it is VERY risky to go cold turkey RE until kids are at least in or out of college.

I plan on launching end of 2019 when I am 55. I have 4 kids and my youngest graduates from college next year so my heavy lifting will be complete. Let me tell you what kids cost from age 4 and up (in my case X 4)... kid sports & travel, braces, cars/insurance/accidents, private school (sometimes a situation warrants it even if it wasn't in the plans), "unfortunate situations" that may require legal help, college/fraternities/sororities/study abroad, weddings (2 of my 4 married). Perhaps you have all of this accounted for? Don't get me wrong, I read about others on this site who have done it, but for me, particularly as the only income provider for the last 28 yrs, it would have been very difficult to plan for these costs at age 4/5. There were many things I "planned for" regarding kid's expenses in the early years and things I said I would/would not do, but life has away of playing out differently most of the time. Eg. I swore I would have only 1 or 2 extra cars when my kids were driving. Guess what, I had 6 cars in my driveway!

No wrong/right answer... good luck!

DawgMan, curious what you would consider a reasonable annual 'slush fund' per child to manage these types of expenses and what ages. We'll be RE with younger kids and this is a big wild card for us. We've added in extra $ to the budget starting at age 10, basically transitioning what we pay for childcare now to this fund, but I know we don't know what we don't know! And while DH and I come from very modest backgrounds and are on the same page in terms of what we will/won't provide, I know it can be a slippery slope...

And byb, thanks for starting this thread. I'm curious to hear responses. It's something we haven't really thought about.

 

[DawgMan]

DawgMan, curious what you would consider a reasonable annual 'slush fund' per child to manage these types of expenses and what ages. We'll be RE with younger kids and this is a big wild card for us. We've added in extra $ to the budget starting at age 10, basically transitioning what we pay for childcare now to this fund, but I know we don't know what we don't know! And while DH and I come from very modest backgrounds and are on the same page in terms of what we will/won't provide, I know it can be a slippery slope...

And byb, thanks for starting this thread. I'm curious to hear responses. It's something we haven't really thought about.

Great question! Unfortunately, there is no 1 size fits all here. My kids are now 21, 23, 26, & 28 so costs today vs when they were 10 are relative. That said, I would suggest to you that where/how you all live (your standard of living/neighborhood/kid's friend's familys profiles) and perhaps how well you are able to "hold the line" on your pre-decided plan will have the most impact on where these costs fall. Some just are what they are and not really in your control while others are consciously/subconsciously affected by the Jones and general lifestyle creep. Uncontrollables would be things like braces, which today seems every kid needs... budget at least $6K/kid for those. Most other expenses you have SOME control over and become choices. In my case, my kids grew up in an affluent area in a nice house with nice things. I did not grow up like this (DW did) and I purposely tried to pull the reigns in relative to what many/most of our friends/neighbors did relative for their kids because I wanted to ground them the best I could. We did the travel sports which cost at least a few thousand a year, but frankly not as much as others. I bought used cars at $8K/per kid when the neighborhood kids were getting new BMWs. We had 1 kid who had some special needs develop who we sent to private school for a few yrs ($22K/yr) which was unexpected. All 4 of my kids went to in-state public universities which ran about $25K/kid/yr when you load up all the BS. Some "extracurricular activities" required some $$ to fix... not planned, but as I discovered, often common in the gauntlet of parenting.

Bottom line is it is hard to predict/plan for every possible kid expense. In my case, I have been the economic engine since kid 1 was born (almost 29 yrs) with a SAHM so I need to be comfortable that when I shut the machine down, my heavy lifting is complete. Others may feel they can do it with young kids, but I did not see it as an option and frankly would not recommend it to anyone with multiple kids unless they have some trust fund or financial solution to fall back on.

Hope that helps.

 

[RenoJay]

I'm 46. Kiddos are 10 and 8. I had a lot of similar concerns. Here are a few strategies I've employed:

1. I literally wrote my work / entrepreneurial story. When they're older I'll give it to them to read so they'll know Daddy didn't always sit around the house during weekdays.

2. I put them on an allowance starting around age 5 so they could start learning about saving/spending. Meanwhile, I gave them household responsibilities that are expected, not optional.

3. I don't talk about my net worth with them. Too easy for this information to end up around the schoolyard at this age. When they're in their 20's or 30's, and established in their own careers, I'll open up more.

4. I get all over them quickly if I hear anything that sounds entitled, spoiled, bratty, etc. out of their mouths. If they ask honest questions like, "Why don't the neighbor kids take a Disney Cruise" I'll use it as an opportunity to explain about earnings, work, priorities, choices, etc.

5. When they're teens, they'll be expected to get summer jobs and to start paying for more of their own wants.

6. I volunteer in their classrooms teaching Jr. Acheivement. When I'm in front of a room of their peers preaching no credit card debt, LBYM, etc. it hopefully has more impact then when I'm with them one on one.

7. Overall, I think kids learn more through osmosis and role-modeling than any other method. So I'm doing my best to present a relaxed, but frugal and careful way of living so that they're neither overly burdened and anxious about finances nor free-spending and wild. There's a happy middle ground of economic responsibility without anxiety that I'm wishing for them. Warren Buffett did a great job raising his kids to have good values, emotions, etc. while growing up fabulously wealthy. One trick he used was to announce publicly on many occasions that they wouldn't receive an inheritance. Then, when they were in their 50's and 60's, he "changed his mind" and agreed to give them more. I suspect he knew all along he'd do so, but wanted his kids to have enough fire in the belly to establish themselves independently in the real world.

Now the question I have: "How do I impart financial responsibility and independence to my ex wife?" As much as I feel I've gotten the kids on a good path, I feel the ex has become totally entitled, dependent on me and lost any inspiration to work and earn for herself. It's frustrating.

 

[kgtest]

I will give it a shot...

- How do you talk to young kids at this age about FIRE? It appears your kids will be 9 & 10/14 & 15 when you and your wife retire respectively so while the kids are still younger, I am not sure it really takes a specific conversation to keep them from being confused. I'm old school, so we had our kids baby sit/odds and ends type jobs when they were 14/15, get starter jobs when they were 16 thru college to cover some spending $$ as well as learn about $$.

- How do you raise them to be mindful of spending and saving? See above. Give them some responsibility/accountability with both earning/saving/spending $.

- What to say when the inevitable questions comes...how come you don't work when other parents workHonestly, you will most likely be filling your days somehow and managing your portfolio so perhaps you can tell them you are an Investment Manager?

Ok, don't take this the wrong way as I don't want to rain on your parade here, but coming from real experience, I think it is VERY risky to go cold turkey RE until kids are at least in or out of college.

I plan on launching end of 2019 when I am 55. I have 4 kids and my youngest graduates from college next year so my heavy lifting will be complete. Let me tell you what kids cost from age 4 and up (in my case X 4)... kid sports & travel, braces, cars/insurance/accidents, private school (sometimes a situation warrants it even if it wasn't in the plans), "unfortunate situations" that may require legal help, college/fraternities/sororities/study abroad, weddings (2 of my 4 married). Perhaps you have all of this accounted for? Don't get me wrong, I read about others on this site who have done it, but for me, particularly as the only income provider for the last 28 yrs, it would have been very difficult to plan for these costs at age 4/5. There were many things I "planned for" regarding kid's expenses in the early years and things I said I would/would not do, but life has away of playing out differently most of the time. Eg. I swore I would have only 1 or 2 extra cars when my kids were driving. Guess what, I had 6 cars in my driveway!

No wrong/right answer... good luck!

Helpful! I too plan ER@50 DS and DD would be 14 and 16. Now you have me rethinking. I don't want to live life with regret, nor be selfish, but making a decision to have kids pushes me to believe ER before I help with college would be selfish. Of course I plan to help, but I could probably pay off entirely if I worked a few more years.

Even working an extra 2-3years until that first year of college is all but complete with DD getting ready to decide.

And I was thinking of having three kids...
Travel Sports for 10years (x3 kids@1k): $30k
Braces for 3@6k+1k insurance: 20k
Private school @22k/yr for one kid: 220k
College 25k/yer per kid(x4): 300k

Grand Total: $570k (add 10% buffer ) and it's more like 600-650k if you have three kids.

SO basically half a million slush fund outta do it lol.

 

[rodi]

I retired when the kids were 11 and 13. Husband retired at a more normal age (62) and I retired shortly after.

I disagree strongly with the statement that one should never retire before the kids are out of college. It has been invaluable to have the time and emotional bandwidth to deal with the teen drama. We still have enough income to put us well above average.... Lots of families are able to survive in a lot less than we do. And my kids are very familiar with the word "NO" when the demand things that are unnecessary. For example, my son recently informed me that "all of his friends were given cars when they got their license". I laughed, said no, and listed all the friends whose parents pick them up after school even though they have licenses.

We buy them the necessities, but they have 'income earning opportunities' for the extras. Older son is re laying pavers in an area that has settled... Younger son is learning to do without because he won't weed, clean, or anything extra. When he gets broke enough, he'll work.

My sons would agree with me that I'm a mean mom. Badge of honor in my book.

 

[RE2Boys]

DW and I are on our way to FIRE where I will "retire" in 5 years at the age of 50 and DW will work about 10 more years and retire at 55. We have two kids ages 4 and 5.

- How do you talk to young kids at this age about FIRE?
- How do you raise them to be mindful of spending and saving?
- What to say when the inevitable questions comes...how come you don't work when other parents work.. lol ��

Just looking for tips and shared experience from the people in this community!

Thanks!

I retired from my career at the age of 50 (wife was 40 and had already left her career job when first son born). My sons were 3 and 1 years old.

1. Just because I retired from my career job doesn't mean I stayed at home in a life of luxury, and I avoided using the term of being retired. As far as the boys knew, I had changed jobs that allowed me to be home much more and that I had several jobs. Never mind that some of the "jobs" were for non-profits where my compensation was a few "perks." They learned that their father had "w*rk" to do at times. If necessary, I used the term "semi-retired" to describe my w*rk arrangements up to several months ago (now I use retired). For three months each year, I prepared income tax returns and was like most other Dad's, leave for the office regularly and home for dinner.

2. See RenoJay comments 2-5, and 7, I used the same approach. Only my wife has any idea of our financial position. And I believe your actions regarding lifestyle and how and what you spend money on will teach your children much more about LBYM than any lectures. Did start my sons on an allowance once in school and was consistent on when some "want" was their responsibility. They each had jobs since turning 13 so allowances stopped. Started out as youth soccer refs, moved to an ice cream stand, now one works summers at a plastics firm, other for IT department of local school district.
Insisted on a modest lifestyle, partly to insure didn't overspend in early years of retirement, partly to instill in the boys a sense of to quote RenoJay " So I'm doing my best to present a relaxed, but frugal and careful way of living so that they're neither overly burdened and anxious about finances nor free-spending and wild. There's a happy middle ground of economic responsibility without anxiety that I'm wishing for them."

Some approaches: we never had cable TV in the home, but were an early adopter of Netflix DVDs and streaming.
Never purchased a new or luxury car, always used and practical. (Soccer dad complete with minivan).
We took many vacations, but mostly driving and using our pop-up camper, even to Disney World.
We were always a step or two behind the technology curve. I'd wait a year or two to buy tech item (be it computers, cell phone, flat screen TV) as it would cost half versus buying current tech. My sons had flip cell phones for awhile, the upgrade to smart phones was on them as a "want", not a need. But one Christmas I did give each $300 toward their choice of upgrade.

Now, 18 years later, they are 21 and 19, in college, each has a Dad purchased vehicle (7&8 year old reliable but safe, Ford Escapes). I pay tuition, room, board, books, car maintenance and insurance. ALL else is their responsibility. I'm proud to say that since age 13, never once have they ever asked for spending money from me. They did learn something of our net worth (that we had over $1million) when filling out the FAFSA forms, but the form only shows a portion of our true wealth.

 

[Teacher Terry]

We had 3 boys and when the first could drive we gave him one of our old cars to drive. Then when 2nd could drive they shared the car. By the time the 3rd could drive no one was left at home. We did not believe in spoiling them and wanted them ready for the real world. Some kids have more and some had less. Ours are all between 38-45 now. As teens they had to work for wants. We paid for sports, braces, clothes, etc. We paid for college if they wanted to go. One son wanted to go to a technical school for a trade and we paid for that. We give each a modest amount towards a wedding. Up to them how to use it.

 

[LOL!]

I'm laughing because you don't have to talk to your kids about FIRE.

Also, they will think it is normal not to be working, so there will be no questions about why you are not working. Besides, you will be working on managing your money. The other parents could be financial advisors and managing money, too.

As for spending and saving, you would do the same things you would do if you were working. You would be saying
"Life is Not Fair."
"I'm not paying for that. If you want to buy it, get your own money."
"Get a job."
and all the other things that your parents told you.

Anyways, I can say you are worrying about nothing.

 

[retired1]

I've two kids.. both in teens. We've been trying to demonstrate that money doesn't grow on trees by questioning "Is it a want or a need ?", "Save and LBYM", and so on. It's not easy for parents because from kids's perspective, they've not gone through the "process". They have friends whose parents who dot expensive cars, shoes, clothing... etc etc. But kids do get hints. I'm glad to see that DD (now 16) has started to look for "Sales/Clearance", "Deals", "Treasure Hunts" and gets excited when she gets a good deal.

Idea is to keep kids "educated" and show "by example" by LBYM.

 

[catman2020]

Hi

I FIRE’d three years ago when our three kids were 11 14 and 17. Two points:

You didn’t talk a lot about your current situation financially but I would suggest you consider hanging on until you can fund their 529’s fully, which scarily means about 250k per kid if you think they might be going to a private school. Mentally I never included the 529’s as part of my assets so making withdrawal from them now feels like I’m getting a bonus.

Retiring while your kids are younger can have some awesome benefits. I was able to participate with school activities that I used to miss or rush to get to because of work obligations. Even just dropping them off at school can be fun. Not being totally stressed out about work and being more engaged with them is also a plus.

 

[ocean view]

DW and I are on our way to FIRE where I will "retire" in 5 years at the age of 50 and DW will work about 10 more years and retire at 55. We have two kids ages 4 and 5.

- How do you talk to young kids at this age about FIRE?
- How do you raise them to be mindful of spending and saving?
- What to say when the inevitable questions comes...how come you don't work when other parents work.. lol

Just looking for tips and shared experience from the people in this community!

Thanks!

I retired at 50, DH was 48 and DS was 12 at the time. DH was the SAHP so he got to retire with me.

How do you talk to young kids at this age about FIRE?: I don't think you need to talk to them at all about retirement. You just need to tell them that you will be able to spend more time with them and isn't that great. They will probably just say ok and leave it at that. Kids don't have any concept of normal vs unusual when it come their parents career. They know that you go away each day and it is called "work", they don't really know or care to know why you go, as long as you come back.

How do you teach them about saving and spending? The same way you teach them to be good people, you model this behavior. Talk to them casually about why you don't eat out every night or why hand-me-downs from your cousin are ok. Maybe give them a small allowance for simple chores around the house and tell them this is to be saved for something special. And then when there is some toy they request, you say, "well you have savings you can use, is that what you want to use it for?" And you let them decide. Sometimes that means letting them spend $8 on pencils that smell like watermelon Without really trying to ingrain this in my son, he is now quite conscious of spending and savings. As a small example, he'd rather take his own candy to the movie theater, than pay the big bucks to buy it there.

And what do you say when the inevitable questions comes...how come you don't work when other parents work? With my son and his friends (about to start Sr year in HS), they don't really pay attention or care about the parents work habits. When I ask my son's friends about their parents work, they'll reply "oh they work at xyz corp", I ask what they do there, and they say "I don't know, something with computers". They are totally oblivious to it all and that is fine. It is more likely that a parent will ask what you do. My response depends on who is asking. Sometimes I tell the truth, sometimes I say I work from home, sometimes I say I pretend my volunteer gig is my full time job.

Others have recommended to wait to retire until your kids are off to college for a host of reasons. I say, just think about what extraordinary costs may come up and plan for them. No need to put ER completely on hold. Open 529s now, investigate the cost of braces, wisdom teeth, etc and work it into the plan. We accelerated DS' braces a month or two, in order to utilize my COBRA health insurance.