Is Financial Independence Possible with Kids?

While it’s definitely more challenging to FIRE with kids, don’t count it out. There are plenty of families who’ve reached their early retirement and financial independence goals.

Below are some tips and tricks to make financial independence a reality, even with children.

Is FIRE with Kids Realistic?

Before we dive in, one of the more common pitfalls for prospective parents is to become discouraged by the projected costs of raising a child.

The thing is, these common figures are not representative of most families. They’re generic estimates for a standard American lifestyle. The numbers don’t reflect differences in living standards, priorities, or cost of living variations.

Your outlook on material goods, budgeting, and quality of life will contribute a good deal to financial freedom success. 

The road to financial independence takes extreme dedication. If you don’t have a healthy relationship with money, it could jeopardize your journey.

How Much Do Kids Cost?

The answer to this question is far from standard or straightforward. There are as many figures as there are families. However, these generic numbers can provide helpful estimates for prospective parents.

So how much does it cost to raise a child?

A simple answer (though not representative of most), according to the USDA, is almost $13,000 per year. This amounts to over $233,000 from birth to age 18 per kid. 

This cost includes:

  • $4,500 for the birth (unlikely if you have insurance)
  • Costs for fertility treatments or adoption if there’s difficulty conceiving
  • Almost $4,000 per year for an extra bedroom to house a child
  • Assumes almost $40,000 in total childcare costs per kid
  • A $2,000 per year increase for a bigger car (and expenses that come with that)
  • Around $3,000 per year for health care, clothing, entertainment, and necessity basics

In my opinion, several of those are inflated or unnecessary living expenses. I’ve raised four kids and was a stay-at-home mom, so I know a thing or two about avoiding some of those costs.

Obviously, the necessities of healthcare, food, shelter, basic supplies, and some transportation costs are a given. But do you truly need a giant house, a fancy new minivan, or three activities per kid to feel content as a family?

This is where a different money mindset plays a huge part in your ability to reach financial independence with kids. It is doable if you live a more simple lifestyle than those USDA numbers are based on. 

How to Calculate the Cost of Raising a Child

Now that we know the standard cost of raising kids, let’s look at what’s really necessary, and what you can tweak if you want to reach financial independence with kids. 

Plan for the basics:

  • Formula and food
  • Healthcare expenses and health insurance
  • Childcare—if benefits outweigh costs
  • Fees for hobbies and sports—if you choose to spend on these.
  • Clothing (young kids don’t need new clothes, by the way)
  • Transportation—gas, insurance, repairs (used cars without payments are ideal)
  • Bed, stroller, diapers, high chair, wipes, and other essentials
  • Future education costs—if you plan to foot that bill

Most of the above expenses are non-negotiables except for what you choose to do about childcare, entertainment/hobby spending, and future education. 

Childcare may only make sense if a second income is well above daycare costs in your area. Also, factor in commute/gas spending and other expenses such as work clothing, lunches, etc. 

Entertainment, hobbies, and sports can eat up a huge chunk of your budget. Do some soul-searching about whether kids need to do 3 activities each. 

College and private education costs are very personal decisions. There’s no right or wrong answer. But what you choose can affect financial independence timetables. 

If you’re sure that paying for college for your kids is right for you, then part of your income should be allocated to a college savings account early on. These are funds that won’t go toward your financial independence goal, so budget accordingly.

As you can see, there are several personal and unique variables that can affect the costs of having a family. With some of the necessary elements figured out, you can better incorporate kids into your roadmap for financial independence.

How Having Kids Impacts Financial Independence 

Obviously, it’s harder to reach financial independence when you have more people to support. Couples with no kids and dual incomes normally reach this goal faster.

Once you start a family, the road to becoming financially independent takes more planning and sacrifice, but it’s still possible.

The impact of children on financial independence:

  • Income will be spread thinner when there are more mouths to feed.
  • If childcare costs are too high, a dual-income household may no longer be practical.
  • Having a family requires more energy which could drain your ability to add more income sources (not true for everyone). 
  • Financial goals and planning for financial independence must be adapted for child-rearing costs.
  • The timeline for financial independence and/or early retirement can be significantly longer after having kids.
  • The temptation to spend more after starting a family is real; your saving capability and willpower may be challenged. 

Related articles: 

Importance of Financial Stability Before Kids

One of the most important things you can do if you’d like to have total financial freedom with kids is to become financially stable ahead of time. This may mean sticking to a budget religiously, having a decent income, and being a regular investor from the start.

Essential financial stability factors:

  • Little to no debt
  • Adequate housing that’s within your budget
  • Stable income with room to grow
  • Steady budgeting and regular adherence
  • Investment strategies that grow your wealth on autopilot
  • Having passive income

Get Out of Debt

Eliminate as much or all of your debt as possible before having kids. Or if you already have one or two, make this a priority. Most people will have housing debt, but wipe out things like credit card debt and student loan debt pronto.

Housing Costs

If you can secure housing that doesn’t eat up most of your income, that’s a huge bonus for being financially stable ahead of kids. Try to plan for at least one extra bedroom when choosing a place. Then you’ll be set for one or two kids.


Make the most of your income potential. If you need a little more training to move up a notch, do it—before you have a child. It may be wise to evaluate whether a change of career or location is warranted if you’re not able to save much after payday.

Or if taking on a side income or hustle is possible before time and energy go to child-rearing, that will only add to your stash of cash.


The sooner you’re used to budgeting and going without extravagant purchases, the better your savings and financial health will be before kids come along.

Being on the same budget page as your significant other ahead of time will put you light years ahead of those who can’t come to an agreement on how to spend and save.

Smart Investing

This step could set you up for major gains if you start early. Before income extends to more people, sink as much cash as you can spare into retirement and wealth-building assets. 

Time is on your side in a big way if you can invest early and steadily throughout many decades. When you choose to jumpstart investing in your 20s, that sweet compound interest will reward you handsomely and make financial independence and/or early retirement easier. 

Your Money Mindset Before and After Kids

Having a healthy money mindset before having kids can be incredibly helpful if you want to become financially independent on your desired timeline.

Money mindsets are often a result of how we’re raised. But if you put in the work and invest in getting financially fit and educated, it’s totally possible to incorporate healthier attitudes about money.

Oftentimes, a person’s mindset about money changes over time as they learn and grow.  So your money mindset may look a little different after you have kids than before. The key is to be mindful of any financial hang-ups or negative habits—and continue to work on them before and after having kids.

Set a Positive Money Attitude Before Having Kids

If you already have problems discussing finances or managing money, now’s the time to work on getting comfortable talking honestly about financial matters with your partner.  

Reaching financial independence can be hard enough without negative money thoughts coming into play. If you and your significant other aren’t on the same page, or have extremely different views of money, a financial counselor may help. 

Find ways to meet each other in the middle, discuss things more openly, and ask questions about the other’s money fears in a nonjudgmental way. 

Making mindset adjustments ahead of time will make your household run more smoothly and provide financial harmony before the kids come along.

What Is a Healthy Attitude toward Money After Having Kids? 

It’s easy to fall into the trap of wanting tons of fancy things for your baby. There are millions of cute and convenient products. It’s hard not to want all of it.

A healthy money mindset after having children is realizing they don’t need all of the new things. It doesn’t have to cost an arm and a leg to raise kids. 

Adopt a happiness-over-things mindset and you’ll be more content, provide a good example for your kids, and become financially independent sooner.

  • Babies don’t need everything.
  • Simple products are the best and cheapest.
  • Kids don’t know the difference between name brands and generic stuff.
  • Train kids to appreciate quality time more than possessions. 
  • Model for them that you don’t need a lot of things to enjoy life. 
  • Practice open and honest communication about money with and in front of your children.

What Are Some Negative Money Mindsets Parents Can Develop?

The stress of raising kids—and unexpected costs—may lead to money mindset snags with parents. Find ways to reconnect and lower stress on a regular basis.

If one partner changes their mind about the financial independence plan, resentment and disagreements can easily follow. It’s possible for one parent to totally trash the budget in order to provide the kids with stuff they never had.

Try to avoid this major mindset trap after having kids—the urge to provide them with a higher lifestyle standard to make up for feelings of being deprived as a child. 

Do allow for some flexibility in your timeline or financial goals if you hit a speed bump with your partner. It happens . . . and you’re new to this kid stuff anyway.

Your financial independence plan won’t die if you make adjustments to the budget and timeline to allow for differences of opinion. Working together for solutions is the top priority.

How to Become Financially Independent with Kids

Despite the naysayers and scary child-raising numbers above, there are definitely ways to cut corners and costs with a family. Just because you have a couple of kids doesn’t rule you out of the early retirement club.

Having kids definitely puts a strain on your budget if you don’t plan well. However, careful number crunching and making important decisions ahead of time can offset many unexpected expenses when starting a family.

Tips for Planning Kids into Your Budget

First of all, have a consistent budget and income that’s been set for a while so you have some predictable numbers to work with.

Next, you might want to meet with new parents who have similar lifestyle standards and ask what their budget entails. This helps with planning and how to cut costs.

If you don’t have access to a family with like-minded standards, try putting together a hypothetical budget that incorporates family necessities. 

This will take some time and homework, but it’s worth it to have actual numbers based on the costs in your area. 

  • Call around to find local childcare costs. 
  • Figure in extra health insurance costs for adding a kid or two. 
  • Account for more money in your food budget for children. 
  • If you’ll need an extra bedroom, add the price of changing houses to your budget. 
  • Include necessary equipment, products, and clothes a baby will need into your budget—keep in mind there’s plenty of really nice used stuff.

Frequently Asked Questions

Is It Possible to Retire Early with Kids?

There’s an excellent financial independence Reddit thread I came across with some great advice from families who are either financially independent or very close to their financial goals. 

Two trains of thought seemed to emerge in the discussion:

1. Start your family early while you have more energy

This seems logical since you’d likely have the stamina to take on a side job for extra income to stash away.

The other good point was if you start on the financial journey young with kids, you may already be used to living on a tight budget and can easily maintain that.

On the other hand, if you’re a dual-income young couple with a higher standard of living, it’s probably harder to downgrade when you have kids.

2. Delay having kids for a while and give your financial independence plan all you’ve got

Work like crazy, have some side hustles and invest, invest, invest. Build up those retirement and brokerage accounts. It’s definitely not a bad idea.

Invest in more education and building extra skills to raise your income, if possible. Budget, time, and energy constraints could make this difficult post-kids. 

How Can I Save Money While Raising a Family?

It’s possible to save money while raising a family. Here is some advice from parents who have achieved financial independence despite raising kids.

  • On Reddit, one financially independent parent pointed out that having two kids is the sweet spot—I’d never thought of it, but the cutoff to needing a bigger car is when you go over two kids. Smart.
  • The two-kid thing could also apply to larger housing. Two kids can share a bedroom. More than that, and it’s a tight squeeze.
  • If childcare is absolutely necessary, shop around for cheaper in-home daycare options if you can find them.
  • Speaking of daycare, some partners stay home with their kids and run a small care business in their home for extra cash. 
  • Figure out your desired contribution for future college expenses. If it’s partial help, you’ll be allocating less money to a college fund than if you’re footing the whole bill. 
  • Several parents recommend for used clothing and supplies. 
  • And for DIY projects around the house, you can save big by shopping at your local Habitat for Humanity ReStore.

Early Retirement is Possible with Kids

No matter which strategies you choose to implement on the journey to financial freedom with a family, just know that it is possible. 

Keep in mind that the successful parents on this journey all have one thing in common: their standard of living is lower than the majority of Americans.

Being willing to go without fancy vacations, expensive cars, and large houses enables them to save more. Just remember that kids don’t need a lot of stuff.

Family time, connections, and togetherness builds more memories than mountains of material possessions ever will. When you’re able to stop that 9-to-5 job and spend more time with your kids, all the sacrifices will be worth it.

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