Advantages of Early Retirement With Kids

Not having a full time job was very convenient the past few months.  Here in North Carolina, when it snows, everything shuts down.  Including the schools.  It snowed a few inches and schools were closed for four days.  Back when I was working, it was always a scramble to figure out who was going to take care of the kids and how we could get to work with icy roads.  During these snow days, all the kids were able to stay at home and enjoy playing in the snow.  What a difference from the working days!

In my previous article, I discussed whether kids will be okay when their parents retire early.  In this article I present the advantages of retiring early with kids.


Free Time

Some parents want to home school their children, but can’t find the time because they have to work all day.  Although I don’t think we will home school our children, that’s a great option to have if it ever makes sense.  We have the free time, so it is a possibility if the kids (and us parents!) ever want to give it a try.  So far they are happy in public school.

If you have been paying attention to our posts lately, you’ll know that we hope to do some extensive travel with our kids this summer.  I’ve been following a few other bloggers like Buck at Bucking The Trend who is planning some serious travel.  Much more ambitious than us, he’s moving to Spain for a year with his wife and two kids.  We could potentially do the same thing, and enroll the kids in school overseas or try out home schooling for a year.  Another great option to have if life in the States gets too mundane and we feel like a really long adventure.  It would be hard to not learn the local language of wherever we end up.  Immersion in a foreign language is a great way to gain rapid fluency.

Whether we travel for a month or a year, I’m definitely looking forward to the “slow travel” lifestyle instead of the action packed week long vacation more common for those working full time jobs.  No longer will we rush from shuttle bus to plane to another plane to shuttle bus to hotel to attractions to restaurants.  We’ll have the time to take it easy, relax, and live a little more local.  We can rent a lakeside house for a week or two, explore an area, do some hiking or boating, and make our own authentic adventure.

The biggest benefit of retiring early with kids is that you get to spend lots of time with your kids.  You get to actually know and interact with them as other human beings seven days per week instead of only seeing them for a few hours each day during the work week.  Working tends to cause stress and exhaustion, and that interferes with the ability to establish high quality deep relationships with your kids.


After they colored all over themselves with markers, us responsible parents told them we would make a sign that said "We Are Princesses" and then we could take a fun picture.  Except we replaced "princesses" with another word.
After they colored all over themselves with markers, us responsible parents told them we would make a sign that said “We Are Princesses” and then we could take a fun picture. Except we replaced “princesses” with another word.  This also motivated them to learn how to read.


I know when I was working, I needed time each day to decompress from the workday.  During the week I wasn’t really “there” one hundred percent in the evenings after work.  Now I’m able to walk to their school and take a nice stroll back home with them, and they get to chat with their friends on the walk back.

I also have way more time to help out at my kids’ school.  I recently visited their school on two different days to help out with their engineering projects.  It’s nice to have the leisure time to pass a few hours with your kids and their classmates and pass on a little wisdom while you’re at it.  And I’m always up for chaperoning field trips.  I love seeing how all the kids are wowed by the different museums and sites they visit!  No more telling my kids “oh, I’m out of town for business that day.  Sorry, can’t be there for your field trip!”.


Retire early and cut kid costs?

You can save a lot of money on kid-related expenses if you aren’t working.  The biggest savings come from being your own daycare and preschool.  With monthly prices often exceeding $1,000 for one child, a family with multiple young children can easily spend $25,000 per year on childcare.  As the kids get older, costs usually go down (if you can find a good free public school), but before- or after-school care and summertime care can still cost a small fortune.

Other than day care, there are still more savings to be had from retiring with kids still in the house.  You will have way more time to do things yourself instead of outsourcing to others.  For example, instead of dropping a few hundred dollars on a birthday party at a local entertainment spot, you can spend $50-100 on pizzas and party favors and bake a cake yourself.  You might even have more fun, since you can entertain guests all afternoon instead of rushing through the two hours at the skating rink or jumpy house places (or Chucky Cheese!).


A self portrait rendered in cake and icing.
A self portrait rendered in cake and icing.


There are lots of free activities during the weekdays that I’m now able to take advantage of since I’m no longer working.  Our local library just up the street offers story time for different age groups two or three times per week.  The community center next door to the library offers two hours of free open play for kids up to age five twice per week.  The community parks, hiking trails, greenways, and pools are also great free (or almost free) places to take young kids during the week.  These places are like ghost towns when all the other parents are at work.

Cooking at home can save a ton of money and tends to lead to healthier cuisine.  These cost savings are available to the early retiree whether they have kids or not, but the savings are multiplied when you have more than two mouths to feed.  You can spend $10 on great ingredients and make your own awesome dinner instead of dropping $40 on take out for you and your kids.  With more hungry fridge raiders, leftovers are less likely to go to waste.  Yesterday’s dinner might make a great snack the next afternoon.

All of these savings are available to any stay at home parent taking care of the kids, just like they are to an early retiree who is also a stay at home parent.  If you are thinking about having one income earner stay at home with the kids, these cost savings are part of the equation.  The loss of income might not be as bad as you think after accounting for these cost savings and other costs avoided by not working.


Tax Savings

I wrote about our $150 income tax bill on our $150,000 incomes, and in that article I noted that our three children knocked $5,500 off our tax bill.  The tax savings from kids really add up.  For each kid, you get a $3,950 personal exemption deduction (in 2014) and a $1,000 child tax credit.  If you are still working, you can contribute to a child care flexible spending account pre-tax.

If you plan to pay for part of your kid’s college expenses, then contributing to a 529 college savings plan can lead to state tax advantages.  Our state of North Carolina used to allow up to a $5,000 deduction for contributions to the North Carolina 529 plan.  They eliminated this deduction in 2014, however.


Changes in spending patterns with kids: Some expenses go up, others go down

After you have kids, your kid-related expenses go up while your other non-kid expenditures might drop.  When we had kids, we noticed our restaurant expenses dropped.  Instead of packing three kids into the car and trying to keep them under control at a restaurant, dining at home makes meal time much simpler.

Without kids, we would probably take more expensive vacations out of town. With kids, we can’t easily pop off for a quick weekend trip or overseas vacation with long flights.  This summer, we had to tame down our long term travel plans a bit since we have a 2 year old (and a 7 and 8 year old). Thailand and Central America fell out of the plans in favor of a five week trip up the east coast and into Canada.

We won’t be flying this summer, but on other trips, plane tickets for five can add up.  So far we have been able to get free plane tickets through credit card rewards and sign up bonuses.

The kids’ school schedule constrains our travel budget, making it hard to travel nine months out of the year.  We also tend to travel a little slower.  For our trip this summer, we are planning to rent an apartment for a week at a time instead of a hotel room by the night.  The cost difference between a one bedroom apartment and a two bedroom apartment (to accommodate our three kids) is negligible.

Kids tend to consume a lot of time, so we don’t have as much vacant space in our schedules to fill with other activities or hobbies that might cost money.  This may sound like a complaint, but it isn’t, since we generally enjoy spending time with our kids.

I may have painted an overly gloomy picture of the radical lifestyle alterations caused by kids.  But I don’t think it is necessarily a bad thing.  You just have to take life at a slower pace when they are young and admit that you can’t do everything as easily as you could when you didn’t have kids.  It’s a temporary phase of life, and worth the sacrifices in my opinion.  Sure, you’ll spend more money on your kids, but you’ll spend less in other parts of your life.



Do you see any cost savings related to having kids?



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  1. Justin Time ( Again )!

    I’m currently paying north of $1000 for a quality pre-school in leiu of daycare where someone may or may not hold your child with a cigarette hanging from their mouth. 🙂 My goal is to be able to be 100% available for her once she hits public school in 2.5 years. Great article once again R.O.G.!

    1. Hey, as long as they have an ashtray nearby and don’t let the toddlers take a drag every once in a while, what’s the big deal, right? 🙂

      Best of luck reaching your goal over the next 2.5 years!

  2. I think kiddos are definitely an overall cost negative. But they don’t need to be as cost negative as most parents make it.

    My 3 year-old daughter wants my time and attention. Not more junk. The best toy is most fun if I (or a friend) am actively playing with it with her. If I’m distracted by the blasted iPhone, she notices and reminds me to PLAY!

    One perk of children is it tends to direct your evening life into something more subdued. Eating out is hard, so eating at home is natural. And cheaper. Going out for drinks is already expensive….and getting a babysitter makes it even more expensive! Therefore, we invite friends over for drinks & deserts for a fraction of the cost.

    Another example:
    We used to have a YMCA membership. When we had our daughter, we hated the thought of leaving her in the Y childcare. So we cancelled. Now we go on walks or runs with her in the BoB stroller. Or I pull her in the bike trailer. Monthly savings = $60/mo.

    1. Thanks for the comments, Kevin! The two examples of changes in spending you mention are exactly what I’m talking about in the last section of the article. Restaurants aren’t necessarily more convenient than dining at home, and I have found other families with kids are also interested in hanging out at someone’s house instead of at a restaurant (when kids are involved). They just can’t sit still for that long!

      The gym membership is another example. Kids force you to be active, and mine seem to have an almost limitless energy source. I get 2+ miles of walking done each day just to get them to and from their schools, so it’s like a built in (free) exercise routine!

  3. “The biggest benefit of retiring early with kids is that you get to spend lots of time with your kids.”

    Without question, the biggest beneficiaries of those of us with our financial houses in order are (and will be) our kids.

    With the rate at which my boys are “growing up”, I’m all too eager to stop working now. It dawned on me that I really only have about 9 more years while they are still living under our roof. That means only 9 more summers, spring breaks, sets of holidays, chances to coach their little league, etc.

    1. My oldest is the same age. She’s half way through her childhood. 9 more years of experiences before she moves into adulthood. I’m very glad that I have way more free time to be there during the second half of her childhood.

  4. Very true about eating out and traveling. Even though we only have one 8 month old, but he gets very fussy in the evenings so we don’t go out to eat. Lunch maybe…but it’s just easier to eat at home most of the time. And while I have friends with kids who still travel a lot…I don’t want to deal with that stress. We’ll keep it local. Quality time is one thing that is definitely tough to find when I drop him off at his grandparents in the morning and pick him up in the evening only to have to feed him, get him ready for bed…only to do it again the next day.

    1. That’s the way I feel most of the time about restaurants and kids. It’s easier at home, and I spare other diners the displeasure of a kid being kid in a very loud manner.

  5. My kids definitely are economic cost negative (particularly b/c my wife left a good-paying job to stay home with them). But having them wasn’t an economic decision. I totally agree with the notion that you’ll gain way more than they will cost and early retirement or semi-retirement is an amazing way to “cash in” on that investment.

    1. A stay at home parent is a definite economic cost. We chose to have 2 parents working, and it certainly let us pile up the money. Our jobs were mostly 40 hours/wk so the schedule wasn’t horrible, but it was challenging at times. I guess our choice to work only 40 hours also stinted our income potential, since we could have worked a lot harder and advanced in our careers more. Although things turned out just fine for us financially.

  6. Love your article . . . this is what I am dreaming about when I retire. Our little guy is 16 months old, and his babyhood went by so fast. I am trying to spend more time enjoying his toddlerhood years. My goal is to retire by the time he is in Kindergarten, so I can do what you are doing . . . walk him to school, spend time with him, enjoy the mid-week activities that I have no clue exist since we are such a routined family right now – Get up at 6 AM and get ready for Work/Daycare, Work, Pick up by 6 PM then feed dinner, bath, story time, and Bed! Over and over. By the time the weekend gets here, we are worn out and then we have Laundry, shopping, and well I am wearing myself just thinking about it all. Just to be able to slow down sounds like a dream!

    1. That’s almost our former routine as well, although I managed to sleep in past 7 am and still get home by 5:30 most of the time (= short commute). It’s kind of crazy to think that lifestyle is accepted without question by the vast majority of Americans. It’s just what you do. Even though you’re rushing through the days today, at least you know sometime soon you’ll be set to slow the pace down a bit. And that’s awesome – congrats on challenging the status quo. Best of luck!

  7. I would love to be able to take our daughter to the local playgroups and library sessions during the week. Especially now that she’s talking and can ask questions and tell me what she likes to do. I’m hoping that we can arrange our work schedules to not have to deal with before/after school care when she starts public school, but that’s still a few years in the future!

    We have spent a *lot* less than we used to before she was born in some areas, but not in others. We used to eat out a lot, and we don’t any more. However, we all get a little stir crazy in the house, and in the winter that practically requires that we drive somewhere – using that much more gas. I also want to show her the world, so I tend to spend more money on her than we ever did on “us”: shows, activities, etc.

    1. When I was still working, we were fortunate to be able to shape our work schedules around the kids school schedule. I went in a little later, and dropped the kids off at school, and Mrs. RoG went to work early and managed to pick up the kids by 3:15. We tended to work around 40 hours per week, and stuck with jobs that didn’t require much more.

  8. Having sufficient time to spend with my family is one of my primary motivators of pursuing Financial Independence. Unfortunately, my work is more demanding than yours was (50+hrs / wk) and studying for a professional qualification, leave little time for play.

    Your article is a great motivator of how things should be, once you get your financial life in order. Thanks!

  9. Kids definitely = NPV negative undertaking. That’s why no one in a modern society ever (nor should they) have kids for economic reasons. I know I bring my mom a lot of joy and pride, but I’m probably the biggest NPV-negative decision she has ever made in her life. Education, lost career opportunities, extracurricular activities are all costs that add up. Thank goodness she loves me.

    1. From a strictly financial perspective, ours are at least slightly NPV negative. But I’m not sure how to value the “joy and pride” and entertainment value of kids. Of course then I would have to assign a cost to my labor to care for them. 🙂

  10. I’m afraid of how expensive kids are, but my decision to have them or not will definitely not be based primarily on finances. We will likely have children before we reach financial independence, but I’d like to at least work at home like I do now. It’s such a scary thing to think about though — an 18+ year commitment is pretty serious stuff!

    1. It’s a big step for sure. And I think the “go/no-go” decision on kids comes down to primarily non-financial concerns. It’s a huge lifestyle question and money is really secondary. There’s always a way to avoid spending money when you have kids, but the 18 year commitment can’t be avoided as easily.

    1. Hey, nothing wrong with the kid free lifestyle! I have a post coming out tomorrow on a kid free couple and the high adventure lifestyle they enjoy. I feel like my last two posts on early retirement and kids could be complemented with a “retire early and child-free?” post to provide some balance to the kids vs. no kids question.

  11. I love this post! Although both my wife and I work still we have never had to pay for child care, which has been a big savings for us, of course to do that we also had to miss out on some career opportunities. It’s amazing how much daycare can cost, especially with multiple kids! In the early days we worked opposite schedules, and over time my employment turned into seasonal work and she developed her job to the point where she has flexible scheduling. In the months I do work, she drops her hours down to spend more time with the kids, and in the months I don’t work she picks up more hours. It’s MUCH easier now that all our kids are in school. We both essentially work “part time” and are able to spend more time with our kids than most parents.

    1. Sounds pretty ideal. We relied on Mrs. RoG’s mom for childcare when the kids were too young for school. Even though she’s family, we still paid her for helping out.

      Glad to hear your schedules were flexible enough to avoid childcare. A few kids in daycare can equal the salary at some jobs when you factor in taxes and work-related costs.

  12. Love the idea of “slow travel”. We hope to do a bit of that once we have kids. My wife and I are not really into the 1 week Disney adventure. More the 1 month in a small town in Italy adventure. (Or maybe Buck has the right idea and we’ll do Spain!)

    1. Sounds like a plan! We almost chose Spain for our summer trip with the kids. I think the one week in Disney blitzkrieg with our 3 kids would be pretty rough. For the kids and adults.

  13. I am an older Dad. I have a lot more freedom to be my son’s father, to give to him everything that I never had when I was a kid. There is something very special about living your second childhood through your son. You and he are one, of the same flesh, of the same body. The love grows enormously. There is no limit. You can’t buy love. It cannot be manufactured except by time and effort filled with true devotion. But I waited until I had financial independence and wherewithal before I had kids. I realize this may not be available to others who made various commitments earlier in life.

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