How to Reach Financial Independence with Kids: Our FIRE Journey
Does the FIRE journey change with kids—and how much does it really matter? In this post, I share what actually changed for us after becoming a family of five. Photo by Josh Willink on Pexels.
Reading time: 8 minutes
Can you achieve financial independence with kids?
Quick answer: Yes—but expect the path to substantially change. In our experience, one child had little impact on our Financial Independence trajectory, while three significantly increased housing costs and lowered our savings rate. FIRE (Financial Independence, Retire Early) remained achievable, but flexibility—working fewer hours, adjusting timelines, and redefining success—suddenly mattered far more than retiring as early as possible.
In short, kids didn’t break our FIRE plan—they changed the levers that mattered most, shifting the focus from speed to flexibility.
What you’ll get from this article
✔ A real family case study of pursuing FIRE before and after kids
✔ How our savings rate and FI timeline changed in practice
✔ Which kid-related costs mattered most—and which didn’t
✔ Why housing and work flexibility mattered more than daily expenses
✔ When Coast FIRE could become more realistic than early retirement
✔ What surprised me most about pursuing FI as a parent
TL;DR — FIRE with kids 🔥
👶 Kids don’t make FIRE impossible—but they do change how you get there
🏠 One child barely moved the needle; three reshaped housing, work, and savings
💸 The biggest cost increases were structural (housing, hours worked), not diapers and toys
📉 Savings rates fell, but financial resilience and flexibility increased
🧭 FIRE mindset shifted from “retire early” to “choose work more freely”
🌱 Coast FIRE often fits family life better than pursuing a rigid early retirement
Below, I break down exactly where kids changed our FIRE math—and where they surprisingly didn’t.
Can You Really Achieve Financial Independence with Kids?
Yes—but not in the same way as you think, and usually not on the same timeline.
This article is a real-world case study of how raising children changed our path to Financial Independence (FI): what shifted in our savings rate, which expenses actually mattered, and how our priorities evolved as we moved from being a dual-income couple without kids (DINKs) to a family of five.
Financial Independence, as we use the term in this blog, is not primarily about escaping work. It’s about building enough financial security to regain control over time, risk, and life choices. Reaching FI allows you to work less, choose better projects, or step away temporarily when life demands it—something that becomes especially valuable when raising children.
Having kids does not automatically make Financial Independence unrealistic. In our experience, the impact is highly nonlinear: one child had little effect on our FIRE trajectory, while three significantly reshaped our housing needs, savings rate, and expectations around our careers. In the end, the biggest changes did not come from everyday child-related spending, but from structural decisions—where and how we live, how much we work, and how much flexibility we value now over reaching FI as fast as possible.
What follows in this post is a look at how those tradeoffs played out for us over the past six years, including the transition from DINKs to parents, the cost categories that mattered most, and how our definition of “success” on the FIRE path has quietly evolved along the way.
What Changes When You Pursue FIRE With Kids
Our Journey to FIRE: From DINKs to DIWKs in Europe
Our household started pursuing Financial Independence (FI) in earnest towards the beginning of 2019, although I was vaguely aware of the FIRE concept (Financial Independence, Retire Early) several years earlier. I live in Europe, where it is not uncommon for university students to graduate in their mid-to-late twenties. I have a post-graduate degree, and, after a couple years of work, decided to pursue a PhD in Germany. Needless to say, I transitioned to the job market very late, even for European standards. Most of my circle of friends would have been earning salaries for a full 5 years by then.
We're now into our sixth year of actively pursuing Financial Independence, a journey we “officially” began in 2019. Before that, I spent two years working in Switzerland—where generous salaries allowed me to save a decent amount early on, even though I wasn’t yet familiar with the FIRE movement. Our first child was born in late 2020, and today, we’re raising three little ones. Looking back, our path to FI so far can be split into two distinct phases: 2-4 years as DINKs (double income, no kids), and the past 4 years as DIWKs (double income, with kids).
As further background, we are both professionals with above-average salaries, but none of us works in a leadership role or owns a business that would merit unusually high incomes. My partner works in a public sector ministry and I used to work as a consultant. Over the last three years, we have chosen to reduce our working hours to achieve a healthier work-life balance with family. This decision has been largely enabled as a result of following the principles of Financial Independence.
Photo by José Carrillo on Unsplash.
Raising Kids in Germany: Childcare Costs, Benefits, and the Real FI Impact
For me, the motivation to pursue FI did not change when kids came into the picture. I still focus on maximizing savings, building investments, monitoring our savings rate, and making decisions with the FI framework in mind. I’m also grateful that raising kids in Germany is more affordable compared to neighboring countries in the region. For families pursuing FIRE in Europe, Germany sits somewhere between the US and Nordic countries—relatively high taxes, but unusually low marginal costs for education and healthcare.
We enjoy high quality public schools for free; kindergartens are heavily subsidized (the cost depends on your income, but it’s capped at around €250 per month per kid); health insurance is very affordable; and public transportation offers extensive coverage and is cheap.
On top of that, everyone receives Kindergeld, a child benefit provided by the German government to help cover the costs of raising children. This represents roughly a flat €250 per month per kid until the child reaches adulthood or completes their education. Of course, I am aware that none of these benefits are really free, but come from a relatively high taxation system. In a future post, I intend to expand on this and also to cover in more detail different aspects you should be aware of when pursuing FI in Germany.
Smart Strategies for Keeping Kids' Expenses Low
The first year of expenses after our first son was born felt very manageable. During this time, we would spend substantially more time at home than we would have otherwise. In our experience, some increasing baby care expenses—including food and health-related costs—were largely offset by spending more time at home. This is a very family-focused time of your life, where you don’t feel the need of rushing around doing things. With our first born, we also had sufficient space in our flat, so there was no need to move yet.
Other typical expenses people tend to report for this age are baby-related furniture, gadgets, and clothes. Thankfully, Germany's robust second-hand market culture offers affordable children's clothing, often priced between €0.5 and €3 per item. It is fairly common to see kids in completely miss-matched, second hand clothes here.
Nobody will raise an eyebrow or blink at kids dressed in this manner, which likely makes it easier to go down the frugal route than it would be in other countries. When I visit friends in southern Europe, I notice kids are generally dressed more formally—it may be trickier to pull off this frugal tactic in such countries.
By combining second-hand clothing with hand-me-downs from friends and family, you can significantly reduce these costs. Here it definitely helps to be organized—we regularly check local flea market schedules to plan second-hand purchases in advance. We rarely buy new clothes for our kids, and we try to apply the same principles to other baby gadgets and furniture. In Germany, popular platforms like Kleinanzeigen and Vinted are excellent for finding second-hand deals.
Photo by Ilya Pavlov on Unsplash.
FIRE With a Family: Hidden Costs That Affect Your Financial Timeline
With one kid and until this point, I would say that, if planned smartly, kids don’t have a significant effect on your timeline to reaching Financial Independence. However, this did change substantially for us now that we have three… The largest expense increase was having to search for larger living arrangements—we simply felt it was getting crowded fast and needed more space. Resulting from our move, our rental costs went up overnight by around 40%, which of course is very substantial.
Renting a larger space naturally increases your expenses, though in our case a significant part of this increase also had to do with the timing of our move, which took place when inflation had strongly affected rental prices in our city. It’s also a reminder of how lifestyle inflation often creeps in through housing upgrades—sometimes out of necessity, sometimes by habit.
As expected, the decision to upgrade to a larger apartment is also compounded by other accompanying expenses—for example, a higher heating and electricity bill or “needing” more furniture to accommodate a larger space.
Another important expense increase I’ve noticed in our post-kids phase relates to insurance. When you become a parent, your perception on the importance of insurance changes fast! At least it did for us. Our childless selves didn’t consider too many insurances beyond the basics, for example, health and liability insurance.
Fast forward to today, though, and we’ve added a few others—including life insurance (not too bad cost-wise) and occupational disability insurance (very expensive). The latter is known in German as Berufsunfähigkeitsversicherung. We should have known that such a long insurance name was never going to be cheap.
A final important expense that has also changed is holidays. A big component of travelling cheaply is proper planning, but headspace is exactly what you lack with 3 toddlers running around. This is something we are working on to improve, but at the same time the nature of the holiday also changes. It can go fast from lower-cost adventurous travel to all-inclusive hotels—you now value convenience and service differently.
Frankly, our past selves might frown on us but actually our present selves are really tired—so just give us a break! When you’re sleep-deprived with toddlers you may feel less inclined to cook during your vacation.
In spite of the increased costs related to housing, insurance, and travel, I still feel like we are making smart(ish) choices, at least if we compare with those around us. At this stage of life, many friends and social peers didn’t just upgrade to a larger apartment rental, but decided to take on a mortgage to buy a house, including its accompanying expenses.
Some readers (e.g., US-based) may be nodding their heads in agreement (“of course, buying a house is the natural thing to do”), but, as we discussed in a previous post, real estate near major German (and European) cities often has high price tags compared to renting costs, and owning a home can substantially delay your path to FI.
Otherwise, we’ve managed to stay relatively frugal. We drive occasionally but don’t own a car, we are careful with our food bill, and generally very intentional with our day-to-day spending. Alright, let’s see how our savings rate has changed during these years.
Our Savings Rate Before and After Kids (and What Changed Most)
Since the beginning of 2021, I have consistently tracked our monthly income and expenses, spanning nearly four years. Looking at our data, I can clearly see two distinct periods. With one child, between 2021 and mid-2023, we maintained consistent income and expenses and averaged a 50% savings rate during this period. Today, we are making a concerted effort to sustain a 35% savings rate.
Our gross salaries have grown substantially in relation to 2021, but at the same time we both decided to reduce our working hours to balance out our family responsibilities. We are very grateful to be in a position to do so and still aim for a reasonable FI timeline.
Our FI number—the amount of money invested in our portfolio where we’d be comfortable with potentially leaving our jobs—has increased by around 38% in relation to early 2021 (and probably a bit more in relation to 2019, though I don’t keep those records). While most of it is related to family expenses, larger accommodation, and other factors mentioned earlier, there has certainly also been some degree of lifestyle inflation taking place in the last 6 years.
I think this should be a clear warning to younger readers pursuing FI that are open to starting a family—consider whether it’s realistic to project your current savings rate consistently over time or whether it makes sense to consider a more adaptive and conservative financial planning scenario, i.e., a decreasing your savings rate over time.
Another option for families is to pursue Coast FIRE—where you save aggressively early on until you’ve built up enough investments that will grow on their own, allowing you to reduce income or work part-time later while still staying on track for full Financial Independence at a reasonable retirement age. This can be especially helpful for families looking to downshift during child-rearing years without sacrificing long-term goals.
Photo by Yan Krukau on Pexels.
Our FIRE Progress Today: Balancing Family Life and Financial Freedom
Overall, I am grateful to be in the position we are in. We feel secure and our pathway to FI still looks clear, despite experiencing some bumps and changed expectations along the way. To answer the question of today’s post, I think it is safe to say that kids—especially more than one—had a meaningful impact on our Financial Independence projections. One child barely moved the needle for us, while three significantly reshaped our housing costs, savings rate, and FI timeline. Without kids we’d likely be working more hours, taking home a larger income, and spending less.
Still, I estimate we are approximately 6-7 years from reaching our target number, based on a 5% safe withdrawal rate (SWR). Before you throw your hands up in the air when reading about our SWR, please take a look at the dynamic, Guardrail Withdrawal Strategy we’d pursue in the event of both of us dropping our jobs. But, importantly, I feel that this is a very unrealistic scenario—it is highly likely that one or both of us will continue to bring in some form of income.
My partner doesn’t really share the Retire Early part of the FIRE acronym, so she may continue to work on a part-time basis, and I will likely take on carefully-selected consultancy opportunities here and there or try to scale the blog. In addition, we are open to the idea of pursuing other unconventional business ventures that we both find fun and meaningful.
If you enjoyed today’s post, consider the next steps:
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🌿 Thanks for reading The Good Life Journey. I share weekly insights on personal finance, financial independence (FIRE), and long-term investing—with work, health, and philosophy explored through the FI lens.
Disclaimer: I am not a financial adviser, and this content is for informational and educational purposes only. Please consult a qualified financial adviser for personalized advice tailored to your situation.
About the author:
Written by David, a former academic scientist with a PhD and over a decade of experience in data analysis, modeling, and market-based financial systems, including work related to carbon markets. I apply a research-driven, evidence-based approach to personal finance and FIRE, focusing on long-term investing, retirement planning, and financial decision-making under uncertainty.
This site documents my own journey toward financial independence, with related topics like work, health, and philosophy explored through a financial independence lens, as they influence saving, investing, and retirement planning decisions.
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Frequently Asked Questions (FAQs)
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Yes, but it may require more planning and flexibility. While kids do increase household expenses, many families—like ours—still reach FIRE by adjusting spending, increasing income, and staying intentional with financial decisions.
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The largest costs we’ve experienced are housing upgrades, insurance (like disability and life), and more expensive travel. Everyday costs like clothing and gear can be minimized with second-hand options and frugal habits.
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Our savings rate dropped from 50% (with one child) to around 35% after having three kids. While expenses increase, especially with housing, being mindful of lifestyle inflation and budgeting still makes a high savings rate achievable.
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Yes. Public benefits like free schooling, subsidized childcare, Kindergeld, and affordable healthcare make Germany one of the more family-friendly places to pursue financial independence—especially compared to many other countries.
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We rely on second-hand markets, limit unnecessary purchases, and borrow or reuse items. Germany’s strong flea market culture and platforms like Vinted or Kleinanzeigen help reduce clothing and gear costs significantly.
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Not necessarily. We’ve used financial independence to reduce working hours, improve work-life balance, and feel more secure. Even if we never “retire early,” the flexibility and options that FIRE provides are already life-changing.
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Planning becomes more conservative and adaptive. Expenses are less predictable, and priorities shift—like valuing stability and time over aggressive saving. We recommend regularly updating your FIRE number and planning for lifestyle changes.
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There’s no single number, but the impact is often nonlinear. In our case, one child barely changed our FIRE timeline, while three significantly increased housing costs and lowered our savings rate. The biggest driver wasn’t everyday kid expenses, but larger structural decisions—especially housing and reduced working hours. FIRE remained achievable, but with adjusted expectations.
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For many families, yes. Coast FIRE allows you to save aggressively early, then reduce work intensity during child-rearing years while compounding does much of the heavy lifting. It can provide psychological safety rather than a strict endpoint, making flexibility and time more valuable than hitting a specific “retire early” date.
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What surprised me most was that flexibility on the path to FI suddenly mattered much more than net worth. The biggest changes weren’t diapers or toys, but how quickly financial security reduced our fear of cutting back work. FIRE shifted from a goal of stopping work to a framework for choosing better work and taking more control over time during an intense life stage.
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