A comment I read a lot on the intertubes, when it comes to financial independence, is that only DINK (dual income, no kid) couples can make enough money and save enough to ever reach financial independence.
Although I’ve claimed in the past that kids might save you more than what they cost, it’s probably clear to most people that raising kids has a cost. Not only in the amount you spend to feed them and educate them, but also in lost opportunities: you’ll have a hard time maintaining a full time job, taking care of your kids, and having a side gig in the meantime.
One of the bloggers I love to read, Steve at ThinksaveRetire, is part of the “DINK” clan. Steve is in general pretty humble about his situation and often acknowledges that being DINKS has helped him and his wife reaching financial independence faster.
Mister Money Mustache, the guru of frugality as the main vector to financial independence, also blogged on the subject of DINKs in a post entitled “Great news, you’re allowed to have only one kid“. In that post he also discusses the costs of having kids.
Alright, so, no surprise here, kids cost money, so if you want to retire early, it’s probably easier if you don’t have kids.
But does that close the door of financial independence to the rest of us? Definitely not, but it just means the road might be a tad bit longer for us.
If I look at my own financial path, I realize that my side gig was mostly built at a time my wife and I were DINKs. The amount of free time we had back then, in hindsight, was huge, which is one of the reasons I cringe when I read Sam at financialSamurai telling people they don’t make more money out of pride.
Making extra money is reasonably straightforward, when you have the time to hustle. It’s not, however, with 2 kids. Today, I reap the benefits of the work I put on my side gig more than 5 years ago, when my kids weren’t born. I remember in those days that my wife wasn’t happy to see me spending thousands (yes, thousands) of hours on my hobby each year instead of spending time with her, and I can’t even imagine what her reaction would be today if I was starting the whole thing from scratch, now that we have two kids. She would probably leave me. But now that the business has proven to be a great source of side income for our family, she complains less about it, plus I also have to spend less crazy amounts of time on it, in general.
It’s also helping us dramatically that my wife is a stay at home mom. We spare the costs of daycare for the baby, and we don’t have to pay for a nanny for the other kid when he doesn’t go to school. The choice here has to be logical: if your significant one could bring in more money than it would cost to take care of the kids full time, then maybe the two of you can pursue their careers. In our case, though, the choice wasn’t based on money: my wife wanted to spend as much time as possible with the kids while they were young. I initially didn’t like the idea as it made us look like an old-school conservative couple (which is really not in my family’s genes), but I think from a financial perspective it turned out to be the right choice for us. I am the high income earner in our couple.
Reaching financial independence when you have kids is definitely a possibility, and I am a prime example of this. I am close to reaching that goal, and I have two kids. In our case, this is happening because of several things, some of which I have mentioned above:
- I planted the seeds of my side business a long time ago, when I didn’t have kids. It was hard work, and I am rewarded for it 5 years later, with less work to put in the side business and significant income from it. This is increasing my income without costing me all my time with the kids.
- My wife quit her job to be a stay at home mom. We save lots of money this way, and this makes financial sense for us given the kind of income she could expect based on her field.
- We save a lot and are very careful with our expenses. This is not news and independent to your family situation: people who want to reach financial independence need to increase their savings. As parents though, the categories in which we need to save, and the discussions we need to have as parents, are a bit different than the ones you would see in a DINK household.
An important point I’m trying to make with my side gig is that if you plan to have kids, it’s probably an important point to start making a lot of money and save while you’re in DINK mode, typically in your twenties and early thirties (Also refer to Mr Money Mustache’s excellent article: if you’re not getting rich in your 20s, you’re doing it wrong). This is the time of your life where you’ll have the most free time and opportunities to grow a side business, work hard to get promoted at your job, or hustle in general. If you can’t do that in your twenties, why would you expect to be able to do it later on, once you have kids and more responsibilities? It’s reasonably easy to keep your level of income or your position at work while you have kids, but climbing the ladder or increase your side gig’s revenue will be much more difficult in my opinion.