We’re Expecting – Our Early Christmas Gift

We're expecting

I have managed to hold on to a little secret in the past few months, but I simply cannot keep it for myself any longer.

My wife and I are expecting a baby in June next year and we are beyond excited and happy to meet our new family member! ๐Ÿ™‚

While we had not planned for it just now, we didn’t really do anything to avoid it either. However, we were still caught by surprise when the two lines on the pregnancy test showed up.

Our first reaction was that something must be wrong with the test… but somehow the second, third and fourth test all agreed on one thing. My wife was indeed pregnant.

Having followed my wife and the beginning of the pregnancy has been a wild experience.ย  It is an absolute miracle that a future citizen of this world can live inside her. It has also been a time filled with many different emotions and thoughts:

  • Are we too young?
  • Who should we tell and when?
  • How do you actually do this parenting thing?
  • What kind of parents do we want to be?
  • How will he/she look like?
  • How should we prepare?
  • … and of course, as a personal finance blogger: what will it cost and what will happen to our FI journey?!

So far, we have taken it pretty chill and we have learned from friends and family that most of the questions above will have a very natural answer once our baby arrives.

We’re sure we will figure things out on the way, but being fans of planning we have also bought an extensive amount of parenting literature to consume during our mini-retirement.

Financial independence and kids

Now, this wouldn’t be a personal finance blog if I didn’t briefly touch upon our financial independence journey and the way kids will impact it.

We all know that kids cost money. We have always planned on having kids, but have only to some extent included this in our financial independence goals and calculations.

Even before our child is born, there are costs like preparing our baby room, buying baby gear and baby literature.

I assume this will rise exponentially as we start having expenses for food, clothing, child care (subsidized), vacations, activities, baptism party, birthday parties, transportation etc.

Luckily I am born in the welfare state of Denmark, so healthcare and education is 100% free from the child’s entire life (hello +50% income tax). We even get a small allowance per kid (~$200 per month), although it’s probably not going to cover all the costs.

Nonetheless, we are budgeting for our child expenses to be around $10,000 per year (slightly below the average American family’s expenses). We’ll see whether this is totally off or not, but I believe it seems fair. We expect to buy most of our things second-hand and will rather focus on a few, quality items than many items of poor quality.

As a couple pursuing FIRE, we are naturally focused on the opportunity cost of getting kids. However, there’s no doubt in our mind we want to have kids above anything else – also at the cost of financial independence.

The opportunity cost of getting a kid is roughly $350,000 ($10,000 per year for 18 years with a 6% return), so that is obviously a serious cost to consider, but obviously some things in life are bigger than numbers in a bank account.

We expect to have more kids over time, so I guess that number can be multiplied with number of kids (perhaps at a slight discount for additional kids due to economies of scale).

We might delay our time to financial independence a bit and have to re-adjust our goals and timeline on the way, but as long as we continue building our net worth, I am sure we will be just fine ๐Ÿ™‚

Merry Christmas everyone – I hope you will have an amazing time with your loved ones!

Your turn: Do you have kids? How did it impact your finances? Is our budget totally off?



Loui Lam December 28, 2018 - 00:02


I feel bad about reading this post a week after you have posted it!

Can’t wait to here all about your kid.. <3

Carl December 28, 2018 - 22:32

Thanks so much, Loui ๐Ÿ™‚ We are super excited to meet her. Happy New Year!

Tim December 23, 2018 - 21:01

Hey Carl, UK reader here who has been following your journey from the beginning but this is my first comment. I just wanted to say a huge congratulations! Although unplanned I’m confident this will be the best experience of your life, just think of all those amazing Christmases you have ahead. Make sure to enjoy your mini retirement and spoil your wife, remember she is going to give you something so special all the money in the world can’t buy.

Carl December 25, 2018 - 19:54

Hey Tim. I’m very happy to hear you have been around for a while. And thanks a lot, we are very excited about the news of expecting a baby, but obviously don’t have a clue about what to expect ๐Ÿ™‚ I’ll make sure to spoil her and I’m trying my best to take care of her as the pregnancy already now starts being quite demanding. Merry Christmas!

Mikael December 21, 2018 - 09:57

Big congrats – I have said it before, but our lives are somewhat identical. I had a baby in june 2016. Be prepared to have all your priorities and thoughts about love an life reinvented.
A kid is just a great way to remember, why it is important to enjoy the journey towards FIRE.
We can put fewer money into savings due the costs of daycare, but personally I use fewer money on dining out, parties and personal hobbies – not missing any of them (reinvented priorities) ๐Ÿ™‚

Carl December 21, 2018 - 11:57

I love that we have identical lives! I am really looking forward to it, but I’m also fully aware that I know nothing about what’s going to hit me. I guess I’m a few years behind you, so I should probably leverage your learnings more ๐Ÿ™‚

Nick @ TotalBalance.blog December 20, 2018 - 23:09

Nooo! But you were so close?! ๐Ÿ˜›

It’s good to be prepared! I would like to make a prediction right now, though that might comfort you a little!
I predict that the first year of the babys life, you are going to spend LESS money than you do now ๐Ÿ˜‰
1. They eat for free and 2. You don’t go out for drinks with friends anymore
It then evens out over time, as they get more and more expensive. You’ll then find yourself looking for vacation spots with kids clubs, kids pools and children-friendly buffet restaurants – so you might save a little on the 5-star vacations too.

Enjoy your mini-retirement! Come June, you’d wish you had FIRED already I’m sure!

It’s good that you plan to buy everything 2nd hand (go for new diapers though! ๐Ÿ˜› ), we hardly buy any new stuff for our kid. She’s probably gonna grow up hating us for that. Luckily her grandparents spoil her often with new clothes. I assume it’ll be the same scenario for your kid ๐Ÿ˜‰

On the plus side, you get to manage a new savings-pot (bรธrneopsparing)! And also, life tend to get a new perspective once you realize that you are now in charge of the future for another human being. It’s scary as hell!

Enjoy those Mai Tais while you can! ๐Ÿ˜›

Carl December 21, 2018 - 11:56

Haha, yes. I’m really curious to see what will happen to our budget – I hope I can still go out for a drink once in a while though ๐Ÿ™‚

I also think our mini-retirement was great timing considering we soon will have to change our priorities a bit.

Uh, I hadn’t even thought about “bรธrneopsparing”. I know nothing about the regulation – that’ll be some nice Christmas reading with a Singapore Sling! ๐Ÿ˜‰

Lasse December 20, 2018 - 19:34

Congratulations !
FIRE wise having kids is the worst idea ever, but life-wise, it’s the best thing I have done.

If we have not had kids, I’m sure we would have retired now (I’m 41), but we are still 6-7 years from our FI “live-rich-die-poor” goal.
The normal saying in Denmark is that kids cost approximately 1m DKK (see for example https://www.al-bank.dk/media/2036/18-aars-budget-for-dit-barn.pdf), but the derivated costs have in our case been much higher because we decided that we needed more space. We spend 1.8 million to extend our house so the kids could have a room each and their own living room, so we didn’t need to fill “our” living room up with toys. Of cause these money come back once we sell the house, but we don’t see ourselves selling the house neither in near or semi far future.

Carl December 21, 2018 - 11:51

Very interesting, Lasse. Yes, I’m not sure about the 1 MDKK either if you count in everything (such as the need for a bigger house etc.), but it’ll be interesting to see what changes and what doesn’t in our budget.

Nonetheless, I know I will always put establishing a family sooner above becoming FI sooner ๐Ÿ™‚ I like the “live-rich-die-poor” goal. That resonates a lot with what we are trying to do too.


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