“You’re selfish for not having kids.”
“You couldn’t do this with a family.”
“Once you have children, this whole plan won’t work.”
I’ve lost count of how many times I’ve been accused of being self-centered and/or a terrible person, as well as had everything I say dismissed because I don’t have kids and therefore “don’t understand what it’s like.” Historically, my response to those people has been something along the lines of, “Fuck off, I don’t judge you for your reproductive decisions so don’t judge me for mine.”
That being said, I’ve come to understand why people say things like this to us. They are worried that because they’ve decided to have kids (which, as we all know, are super expensive), FIRE (Financial Independence Retire Early) doesn’t apply to them and therefore they’ll never be able to quit their job and travel the world—or even just pay off their mortgage. These people are, by the way, wrong. Having kids does not exclude you from implementing my approach and living your best, most liberated life.
I’m acutely aware that there’s nothing as irritating to parents as someone without children giving parenting advice. That’s why I decided to reach out to some people with bona fide expertise. The first part of this chapter, which deals with the true cost of having kids, is a collaboration with Pete Adeney from the blog MrMoneyMustache.com, Jeremy Jacobson from the blog GoCurryCracker.com and Justin McCurry from RootofGood.com. All three are fellow finance bloggers whom I respect tremendously and who have become financially independent and retired early—with kids (Justin has three of them!).
The second part of this chapter deals with how to travel with school-age kids, so I collaborated with two people who have successfully done it: Jennifer Sutherland-Miller, an education consultant from the blog EdventureProject.com, and Lainie Liberti, a leader in the movement of mobile educators known as world schoolers.
Ready to start busting some myths? I know I am.
In 2015, the USDA reported that it costs, on average, $233,610 to raise a child to the age of eighteen in America. But that’s not the whole story. The problem is, the media often relays this number like a price tag. If we dig deeper, we’ll see holes in the methodology.
The first clue is that the USDA reports different numbers based on how much a family earns. In 2015, the national average annual cost per child was $12,306 if the family earned less than $59,200, but that cost doubled to $25,108 if the family earned more than $107,400.1 The reason for this disparity is that much of that cost is variable—based on choice rather than necessity. Higher-earning families tend to choose to spend more on their kids and that’s why their per-child costs are higher. It’s possible to raise a child on far less by making savvier choices.
Western capitalist societies operate under the assumption that if you want a good life, you have to spend a lot of money. I’ve discovered that this isn’t true. Travel and location-independent living, for example, reduce your costs while increasing your quality of life. A similar assumption exists in child-rearing: in order for a kid to grow up happy and healthy, you have to spend a lot of money.
What if the opposite were true? What if it were possible to raise a child for far below average, while at the same time giving them a high quality of life?
I reached out to early retirees doing exactly that. The Jacobsons, the McCurrys, and Pete Adeney (aka Mr. Money Mustache) are friends we met through the FIRE community who retired in their thirties with kids. Jeremy travels the world with his son and wife. Justin has three kids and lives with his family in Raleigh, North Carolina. Pete has a son and lives in Longmont, Colorado. I wanted to learn about their experiences, how much it costs, and the kind of life they’re able to give their families. Their answers were surprising, to say the least.
The USDA breaks down the cost of child-rearing into seven categories: housing, food, child care, transportation, health care, clothing, and miscellaneous. Let’s see how our early-retired parents deal with each.
As always, housing is the biggest category, taking up 29 percent of total expenses, or $67,746.90 per child until the age of eighteen. This means housing costs an extra $313 per month per child. It’s also the category I approach with the most skepticism. The USDA reports that these expenses include mortgage payments, property taxes, insurance, home maintenance, etc. In other words, home ownership costs. These increased costs are driven by the fact that many couples rent while they’re childless and then decide to buy a home when they have a child. So the additional housing costs are driven by the dramatically higher costs of owning a home rather than renting.
According to Justin, he paid just $18,000 for an additional six hundred square feet of living space to accommodate his three kids in Raleigh. That added approximately $1,500 per year, or $500 per year per kid. Extrapolated over eighteen years, that’s a total of $15,000 per kid. Jeremy, an American expat and self-proclaimed “renter for life,” rents a one-bedroom apartment in Taiwan for $1,323 per month and co-sleeps. However, when the kid gets older and needs his own bedroom, Jeremy plans to move to a two-bedroom rental, which would add about $350 to their monthly living expenses. He is spending around the 2015 USDA average. Pete thinks the cost of kids depends on where and how you choose to live. He lives in expensive Colorado, where an extra bedroom adds approximately 200 square feet to a house, translating to $60,000 increase in housing prices. At his 4 percent mortgage rate, this means an increase of $200/month or $2,400/year. He thinks the USDA estimate is high but not exorbitant. To keep housing costs down, Pete says, “You can always live in a smaller house, start with a serious fixer-upper, and learn to do your own high-end renovations in order to more than offset any housing costs.”
Food is the next-biggest item, taking up 18 percent of total per-child expenses, or $42,049.80. Because this is over eighteen years, this equals about $200 per child each month.
You would think food is the most difficult cost to optimize away, but all three of our early-retired parents report dramatically lower costs than what the USDA predicts. Justin says that by taking advantage of discount stores like Aldi, Lidl, and Walmart Supercenters, his total grocery bill per kid amounts to only about $100 per month, or half of what the USDA predicted. Pete estimates a frugal family cooking plan (using Costco-style bulk groceries) costs only $4.00/person per day or about $122/person per month. Even though that total seems low, Pete has never compromised on quality or his health, because as a self-proclaimed “lifelong health and fitness nut,” he only buys fresh, natural ingredients—never junk food, desserts, or sodas. However, if you’re someone who can’t live without Friday take-outs and/or buying groceries from Whole Foods, it’s easy to quadruple his estimate.
You hear it over and over again: child care is expensive! Day care and preschool consistently rank as one of the biggest line items in new parents’ budgets, especially if they live in major cities. According to the USDA, child care costs eat up 16 percent of the cost of raising kids, or $37,377.60, and you can’t not have this, right? After all, someone has to watch the kid when the parents are at work.
Here’s the thing that Justin, Jeremy, and Pete reminded us about: if you retire, you actually don’t need day care or preschool anymore. This cost drops to zero, since you no longer have to go to work. Pete recommends getting your spending, living, and work situations sorted out before starting a family.
Transportation makes up 15 percent of the cost of raising a kid, or $35,041.50, and this one is especially baffling. But when you dig into what the USDA considers transport costs, the reasoning becomes obvious. According to them, this covers car payments, gas, insurance, maintenance, and repairs. In other words, it supposes a family buys a car just to drive the baby around. If you want to do that, fine, but let’s not pretend a shiny new station wagon is a necessity. Used vehicles, car sharing, public transportation, and biking are options other early retirees have used to bring down their kid transportation costs. Amazingly, the USDA also includes the cost of buying the kid their own car when they turn sixteen as a necessary expense! No wonder this category is so high!
My experts confirmed that this number is bogus. Justin did all the things the USDA assumed: he bought a bigger car to accommodate his larger family, and he even plans to buy his daughter her own car when she turns sixteen, which the siblings can share once they are old enough to drive. But their used minivan cost just $8,000, and gas and maintenance work out to roughly $300 per year. He’ll buy a used car for their daughter for around $5,000, plus $2,000 a year for gas and extra insurance. All told, Justin is expecting to spend around $14,000 on their family’s two cars.
Jeremy, a car-free bike enthusiast, scoffed at my question, saying his so-called transportation costs totaled something like $150—for a stroller. He does not intend to buy his son a car, since he doesn’t feel the need to own one either. He prefers to take public transit and bike around Taipei with his son. Pete estimates it costs around 50 cents per mile, on average, to drive, but you can cut this cost in half by driving a fuel-efficient hatchback, bought used with cash. You can cut this even further by designing your life to require less driving. Walking, cycling, or using a scooter are the preferred methods Pete’s son, Simon, uses to get to school. Pete strategically chose a home within a mile of Simon’s school to avoid the need to drive. When I asked Pete whether he was planning to buy his son a car, he said, “Nobody’s going to ruin this great situation by buying this boy a car when he’s a teenager—what kind of cruel punishment is that?”
Again with the health care. Yes, health care in America is expensive, but as we discussed in chapter 18, it doesn’t have to be. In retirement, those costs plummet due to the ACA, and even if they don’t, there’s always the option of traveling and relying on expat insurance. The USDA reports the average cost of health care for a child to be $1,500 a year, but adding a dependent to an expat insurance policy with worldwide coverage outside the United States is just $400. Jeremy travels the world with his family and pays less than $100/month for travel insurance for the entire family.
Justin has an even better solution. According to him, the ACA actually costs less as you have more kids due to how the federal subsidies are calculated. A couple with no kids, for example, would pay $3,200 per year at an adjusted gross income of $40,000 per year (the cost threshold they would have to hit before getting the subsidy). The same couple with three kids would see their health insurance costs drop to $1,400 per year—a savings of $1,800 per year.
Kids can actually save you money in health insurance costs. Who knew? If you’re not eligible for ACA subsidies in retirement because you make a high income like Pete, he believes adding a child to your insurance policy increases the monthly cost by about $100 per month. His son recently broke his arm while playing in the park and Pete ended up with a $5,000 out-of-pocket expense. The good news is that his income earned in retirement can be used to cover this cost.
The USDA projects $18,000 of clothing costs per child, which is hilarious since I don’t even spend that much on clothing for myself. Justin spends $1,000 a year to clothe his family of five, total, or $3,600 per kid for eighteen years. Jeremy joked that he’s barely spent $18,000 on clothing in his life. Pete says the secret to clothing your kids is that there is a never-ending stream of hand-me-downs from other older parents, just “begging to be given away” so the parents can feel better when their kids grow out of everything. The only exception are shoes, which Pete prefers buying new. Even then, he estimates the cost of clothing Simon to be only $500 per year, half of the USDA’s estimate.
“Miscellaneous” includes personal care expenses (haircuts, toothbrushes), entertainment (portable media players, sports equipment, televisions, computers), and reading materials (nonschool books, magazines). This is just 8 percent of the total projected costs, and at $18,000 over eighteen years, not that unreasonable compared to the other categories. In fact, our experts agreed with that estimate, having spent between $9,000 and $18,000 themselves.
So according to the USDA, having a kid costs $233,610. This is what our experts’ actual costs have been: Justin’s total is around $2,600 per kid per year, or $46,800 total, less than a quarter of the USDA estimate. As he pointed out, if he were to factor in the tax credits he gets back from the government, his net cost is closer to $500 per child. In fact, Jeremy reported that after taxes, he actually made a profit from his kid! Pete estimates the cost of raising a kid to be $8,340 per year or $100,080 total, less than half the USDA estimate.
So there you have it, from three financially independent parents who have kids on their own—by being strategic with your spending and not making hugely wasteful decisions, the cost of raising kids can vary wildly, from half of the USDA estimate all the way down to a quarter, depending on where you live.
Justin, Jeremy, and Pete all write fantastic, detailed blogs that break down all of these expenses, and they can be found at RootofGood.com, GoCurryCracker.com, and MrMoneyMustache.com, respectively. Check them out if you want to know more.
Now that we’ve busted a few myths on how much it costs to raise kids, let’s deal with the other elephant in the room: education. Traveling with little ones might be well and good when they’re infants or toddlers, but once you need to enroll them in school, you’ll have to stop traveling, right?
Honestly, we thought so too. Like everyone else, we believed that all fun stops once you have kids, which is part of what prompted us to travel the world in the first place. Better get it out of our system before we have to settle down. We were shocked to discover this isn’t true! There’s an entire community of people who have bucked this convention and not only continue to travel but raise their kids on the road.
We were staying in Tulum, Mexico, a few years ago and in between diving in cenotes and playing with sea turtles, we got to know the other guests at our Airbnb. One of them was a mother from Australia traveling with her son.
“Wow, it’s so great you two are traveling together,” I told her. “So, his school let you take him out in the middle of the school year?”
“No,” she replied. “He doesn’t go to a traditional school. We’re world schoolers.”
I blinked. “Come again?”
Meet the world schoolers. The world is their classroom. While the catchy name can be traced back to around 2012, the practice itself seems to have originated in the early 2000s, when a community of alternative education advocates began comingling with the so-called digital nomad crowd—location-independent travelers who work remotely online. They began experimenting with ways to adapt nontraditional education methods to a nomadic lifestyle, and world schooling was born.
This first wave of world-schooled kids has recently come of age, attracting media attention over the fact that rather than being weird, antisocial, and poorly adjusted people, these young adults are intelligent, sociable, entrepreneurial, and in many ways better developed than their traditionally schooled counterparts.
I reached out to the leaders of this movement to learn more. By combining what they’ve done with nomadic education with what we’ve done on financial independence and early retirement, we can find innovative answers to the problem of how to retire and travel with school-age kids.
Lainie Liberti, cofounder of the We Are Worldschoolers Facebook group, and Jennifer Sutherland-Miller, alternative education consultant and founder of the blog EdventureProject.com, were gracious enough to provide their valuable input here. Both have brought up their own children in a world-schooling environment and now help other families do the same.
Apparently, this is the first question anyone in the world-schooling community gets asked. Everyone’s always wondering: does world schooling make kids weird and antisocial?
The answer is, of course, no. In the past, moving around and changing schools every few years may have interfered with a kid’s ability to make and maintain friendships, but these days it’s so easy to connect with people online that it’s not a significant problem. World schoolers have their own community that continuously organizes meet-ups all over. The kids use these events to mingle and form friendships and use social media to stay in touch. Some groups of families even travel together for a period of time—in an RV or a caravan around the United States or Australia, for example.
In many ways, world schooling provides an elegant solution to the social problems that traditionally schooled kids deal with on a day-to-day basis. World-schooled kids can choose their social circle, and their parents are deeply involved in their education. Thus, gangs, bullying, cliques, and online harassment are far less of a problem. Parent and child have control over who they spend time with because the family is not locked into one area or school zone.
To take an extreme example, think about how much fear and frustration surrounds the issue of school shootings in America. Now try to apply the idea of a school shooting to a family of world schoolers who do most of their education online.
Doesn’t really work, does it? World schooling is a perfect defense against school shootings since there’s no physical school to shoot.
This is a big and complicated question since there’s no one “correct” way to world school, so we’ll try to introduce the core concepts to give you a taste.
World-schooling styles range from student-driven “unschooling”—similar to the Montessori approach—to a more traditional classroom-based style known as “classical.” In between are methods such as Charlotte Mason, which emphasizes the environment and storytelling over dry textbooks, and third-culture kid, or TCK, which emphasizes cultural immersion and international schools. However, all methods have one thing in common: the world is a student’s most active learning tool.
For example, rather than learning about the Vietnam War in a textbook, a world schooler might travel to Vietnam to visit the sites where major battles took place and interview people who participated in the war. They learn languages by immersing themselves in other cultures and speaking to locals. They learn math by calculating exchange rates, geography by climbing the mountains they study, and astronomy by navigating with the stars.
In short, world schoolers learn by doing, rather than by sitting in a classroom.
If you went to a school like mine, you’re familiar with the experience of taking a test, having it marked, and being handed back a grade or score. In world schooling, it works a bit differently. Keeping in mind that there are many different styles, generally assignments and tests aren’t designed to be assigned a numerical score. Rather, they’re intended to ensure that the student learns the content.
So when an assignment or test is completed by a student, rather than their performance being used as a metric to compare their worthiness against the rest of the class, their correct answers are applauded while their incorrect answers are used as teaching tools and learning experiences. Rather than punishing students for answering incorrectly, parents use the test to guide the student’s learning experience and fill in any knowledge gaps they have. They can take the test as many times as they like to solidify their knowledge.
To a curious parent, world schooling might sound interesting, but the idea of taking on your child’s education is daunting, especially if you don’t have any teaching background. And to be honest, a large part of the world-schooling parent community does have some kind of teaching background. That’s because the movement can be traced back to the early 2000s, when there was little certainty that these ideas would work. So of course, the early adopters were specifically trained in education. They had the skills (and courage) necessary to guide their kids through a brand-new path of learning and come out thriving.
Twenty years later, those early adopters have seen their kids successfully integrate into the postsecondary school system and are explaining just how they did it. They’re writing blogs and publishing books, and their movement has grown from just two hundred people to more than fifty thousand.
It’s always been my approach: You don’t have to trailblaze. Others have already done it. Just copy their moves!
People are taught the “waterfall” model of schooling, where they believe that a child’s performance in grade one determines their admission to grade two, which determines their admission to grade three, and so on. Any screwup at any point in the waterfall cascades downward, disrupting their kid’s education and their life, until they’re rejected from Harvard and living under a bridge.
But the truth is, kids experience schooling disruptions all the time. Sometimes a family needs to relocate because of a job. Sometimes a family relocates across borders (like mine did when we immigrated to Canada). Sometimes a family’s home country doesn’t even have schools that are recognized by their host country, like in refugee or asylum situations.
We long ago figured out ways to incorporate students who come from a nonstandard educational background into the traditional school system. What this means is that world schooling is not a one-way decision. If you try it and realize it’s not for you (or your child), you can reenter the traditional school system at any time. All you have to do is go through the same process a transfer student moving into a new city would go through.
College and university admission officers are increasingly looking for applicants with unique experiences. After all, there are only so many applications from straight-A students in debate club they can read in a day. As a result, none of the world-schooled kids we spoke to had any problems getting into higher ed. Hannah Miller (world-schooled daughter of Jennifer Sutherland-Miller), for example, enrolled in Oregon State University’s Ecampus program and then transferred to Queen’s University in Kingston, Ontario, to study geography, when she was ready to put roots down.
Colleges are looking for students who can successfully complete their programs, and what better way to measure that than to see students complete a college-level class before they get to college? Enrolling your child in an online Advanced Placement (AP) class is a popular approach because AP classes could potentially award college credits or enable your child to skip college intro classes. Even in the high school down the street, AP classes are considered a great way to stand out, and doing well in an AP class from, say, the highlands of Guatemala would erase any doubts about the efficacy of world schooling. After all, results speak for themselves.
Remember, there’s always the option of transferring your child back into traditional school for the final few years of high school. That way, they would apply to university like everyone else.
Absolutely. Just not by that name. No government currently recognizes the term “world schooling,” but they do recognize homeschooling, and the same well-established rules and regulations that govern homeschooling apply to world schooling, too. Some states require you to register and check in every year with progress reports and standardized testing results. Other states are hands-off. Others even pay you a subsidy, since you’re not taking up a spot in the state school system.
As long as homeschooling is allowed and recognized, world schooling will be allowed as well. Make sure you’re in compliance with any rules and regulations that apply in your state or province of residence, and you’re good to go.
This was just a brief introduction to early retirement with kids and the world-schooling approach. Each of our experts, namely Pete Adeney, Justin McCurry, Jeremy Jacobson, Jennifer Sutherland-Miller, and Lainie Liberti, could fill tomes with the breadth and depth of their knowledge on the specific topic they’re experts in. Fortunately for you, all of them have, writing extensively in their blogs and Facebook group about how to retire with kids or educate those kids on the road. To learn more, start by going to their websites, listed on the following page.
CHAPTER 19 SUMMARY
Kids don’t have to be as expensive as people make them out to be.
Also, many expenses, like day care, drop away once you retire.
Pete Adeney retired in Colorado with his son. Justin McCurry retired in North Carolina with three kids. Jeremy Jacobson retired and now lives nomadically with his son. All three raised kids on a fraction of the cost that normal parents pay.
Check out their blogs MrMoneyMustache.com, RootofGood.com, and GoCurryCracker.com for more details.
There’s also a group of parents that travel permanently with their kids and educate them on the road, called the world schoolers.
Check out the blog EdventureProject.com or the Facebook group www.facebook.com/groups/worldschoolers for more details.