Saving for FIRE with young kids

A lot of the blogs I read about FIRE are for people who don’t have kids.  We have two of them, a boy of 4 and a girl less than 1yo.  Now they bring a lot of joy to my wife and I (plus a lot of headaches!) and like every parent we want the best for them, but there is no denying that they do add to our living costs which slows down our savings rate.  They need feeding, they need shoes and clothes, they need to learn to swim, they need extra seats on the plane if you’re travelling, the list goes on and on. 

There are plenty of articles like this one about how many hundreds of thousands of dollars it will cost you per child to raise them from babies to age 18.  These articles also don’t tend to take into account the cost of wanting/needing a bigger house or living in the right school district etc so there’s that as well.  As with most things though, there are plenty of ways to cut those costs.  I can’t claim any real expertise for older children, but for kids age 0 to 5 I feel like we’re doing a pretty decent job of keeping the costs down.   These are some of the things that we do to try and spend as little as possible while still making sure that they’re not missing out because of our desire for FIRE.

First and foremost, young kids don’t need brand name stuff.  This applies whether you are talking about clothes, shoes, food or pretty much anything else.  We buy clothes and shoes almost exclusively from the big department stores like Target, Kmart and Big W.  We also tend to try and buy when they are on sale, typically at the end of the season.  What this means is that you’re buying clothes a year in advance, but it’s at least half the regular no name price, which is probably at least half the brand name price so all up you’re paying a quarter of the brand price.  Do you know which young kids really care about brand names?  None of them. 

If you’re worried about whether or not the kids clothes are going to be in fashion, every year I have looked at this stuff it has been dinosaurs and trucks and animals and ballerinas and fairies and such forth.  Sure they’re probably not getting the gear from whatever the latest Disney movie is or it’ll be a year out of date but trust me, they will survive.  When it comes to shoes, my son gets through a pair of running shoes every few months.  He has no idea whether they are $50 shoes from Nike or Adidas or $10 from Big W or Kmart.  He still seems to run around just fine.  If you wanted to cut costs further you could buy the clothes from your local op shop.  We don’t but we do buy some toys from there which have yet to produce any protests from anyone so far.

Secondly, food and groceries from ALDI and the store brand stuff from Coles and Woolies are perfectly good for almost everything.  In particular for young kids I can buy Mamia nappies from Aldi (I must admit I don’t like the store brand ones from Coles or Woolies) for 20 cents a nappy, or 65 cents a nappy for Huggies from Coles.  A baby is pretty much guaranteed to go through at least half a dozen nappies a day and it can easily be more.  At a price differential of 45 cents a nappy multiplied by 6 a day multiplied by 365 days a year, that’s just shy of a thousand dollars. 

Things like wet wipes are much the same, the generic stuff is pretty much the same as the brand name stuff.  Save your money!  Buying in bulk is also great as you can normally save a decent amount by doing so.  Coles and Woolies both tend to have rotating specials on groceries every two weeks as well, so time your purchases around that and you can easily save a lot of money compared to just buying the same things every week regardless of price.  Also, there are no treats just for behaving when they go to the shops.  Sure there is the occasional chocolate bar but it is a special treat rather than being an every time thing.  I don’t think there has ever been a toy bought just to keep them quiet.

If you’re eating out with kids, the kids meals are a huge trap.  Chances are that they are just unhealthy pizza or nuggets and chips, and your child is only going to eat the chips anyway.  So you’re paying $10 a pop at a lot of places for your kid to eat chips.  Great deal right?  Most of our eating out tends to be at pubs or family restaurants, so we just order our own meals and our son can have some of that.  Meals at these places tend to be huge anyway so there are plenty of spare chips and we just have him eat some of whatever the main meal is.  Saves money, saves our waistlines, it’s two birds with one stone essentially.

And while we’re still talking about food, if you’re going to be out and about somewhere with the kids take food with you unless having a meal out is part of the outing or you’re going to be near a supermarket where you can get food rather than paying the markup at a café or bakery or restaurant.  If it’s just for a snack then they’ll be fine with fruit or a muesli bar, if it’s for a meal then sandwiches or pretty much anything prepared at home will be a hell of a lot cheaper than eating out.  

One of the joys of children is occasional poo-splosions when you’re out and about.  If you’re lucky this will be contained by the nappy, but this is by no means guaranteed.  Kids also have an amazing ability to find mud or some other way to get their clothes dirty.  Whatever the cause you always need a change of clothes with you as well so that you don’t have to buy an emergency set of clothes if it all goes pear shaped.  Same deal for having plenty of nappies and wet wipes in the car or pram so you don’t have to buy some tiny pack at a huge markup to what you would normally pay. 

Last but not least, one of the really big expenses with kids is childcare.  There are government subsidies but it’s still likely to cost a lot of money.   We’re in the fortunate position where we can live off my income pretty comfortably and so my wife can look after both kids which saves us that expense (although there is the opportunity cost of the wages she would have earned otherwise), but we realise that we’re extremely lucky in that regard.  It obviously helps that we keep our spending under control (as per the rest of this post and future ones!) but for some people that’s just not possible, particularly single parents. 

When we moved back to Australia a few years ago we deliberately moved to a place that was close to family so that our one kid at the time and the planned future kid would be able to grow up with them around.  One of the bonuses of this is that we can have family help out with looking after my son which although it doesn’t help out much financially (although they do feed him when he is at their house and also pay for any outings they go on with him) it gives my wife a break from looking after two screaming kids.

In the future he will be off to school but presumably my Mum will be keen on having my daughter a couple of days a week at that stage.  Again not everyone has this option and a lot of grandparents might find it too tiring or not what they want to do at this point in their lives, but my Mum absolutely loves it which is fantastic for all involved.  So to the extent that it’s possible, seeing if your parents can help out with baby sitting can be a big help financially as well as hopefully bringing your family closer together!

What do you do to help cut the costs of kids?  If you liked this post and would like to read more like it then please subscribe!