Early Retirement’s Biggest Obstacles #1 – baby on board

my biggest obstacle to retiring retire
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The baby on board is now my #1 obstacle to retiring before 40. I found a baby calculator online and it said the kid will cost $355,906 to raise including college.  Seriously? Are you kidding me????  That’s a whole lot of dough.

I’m not putting much stock in this crazy number though.  Why does a kid have to cost so much?  We are going to stay put at our 1,000 sq ft, 2-bedroom condo in the city.  The kid will just have to deal with it.  My family of 5 had one bedroom when I was in grade school and I turned out all right. 😉  We don’t need a 2,500 sq foot house.  There is a park right downstairs, playgrounds around the neighborhood, and other children in the building.  What else does a kid need?

*We moved to our duplex in 2019. We live in one unit and rent the other unit out. A backyard was extremely useful during the pandemic lockdown.

Anyway, the kid is screwing up my retirement calculation and I don’t really know how to incorporate the baby into the formula. I’m open to suggestions so send me some ideas.  I’ll have to add a baby category to my monthly cash flow report.  I still have 3 years to retire by 40 so I can see firsthand how much the baby will really cost and adjust my plan accordingly.  I am 100% sure we can raise a good kid without having to spend so much money.  Brandon, my college buddy with two little girls, said there is no way I can retire by 40.  Is that true?  I’ll post my goals and progress this month and you can help judge my prospect.

Parents, are kids preventing you from retiring?  How much do they really cost?

*I retired when I was 38! That was in 2012. See my 10 years retirement update here. 

Bonus: gratuitous penis shot below..

penis on the internet
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Woohoo!!! I’m going to be a dad in 3 months!!  I can’t wait.

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.
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34 thoughts on “Early Retirement’s Biggest Obstacles #1 – baby on board”

  1. We bought a bigger house due to having a kid. Not right away but eventually.

    If you travel, once the kid hits two, your plane ticket expenses will go up 50%. Actually ours went up immediately because we started making extra trips each year to visit our families.

    You can get almost everything used. The only thing I wouldn’t get used is a car seat. I would only accept a car seat from someone I would literally trust with my life. It’s not enough to just “look ok” – it could have been in an accident that did non-obvious damage.

    On the other end of the scale, there is absolutely no reason to buy clothes for $6 – $10 per item when you can get those items for $0.50 to $1. And gifts and trades/hand-me-downs are free. People will tell you “you’ll get lots of gifts” and it is 100% true. People came out of the woodwork to give us gifts.

    Babies are pretty cheap, but I kind of suspect it goes up as the child ages, culminating in a few hundred thousand in college expenses.

    • We’ll try our best to stay at our 2 bedroom condo. I don’t think we need much more space than that. I had two brothers and we lived in a 2 bedroom apartment until I was almost out of high school. We probably will travel in the US more and drive while he is still young. I don’t think he will appreciate international travel until he is a bit older.
      I got a used car seat, but it’s gone now. We got a brand new one and I’m much more at ease.
      We got a lot of gifts and hand-me-downs too. This summer we’ll go look at garage sales and craigslist more. 🙂
      The most expensive thing so far is the daycare. If we can get rid of that, we’d be set.

  2. Kids are NOT expensive. Until they are at least 7 (the age of my oldest) they are practically free. We have a minivan because we have 3.5 kids, and we have a bigger house than we might normally have, but day to day operating expenses are hardly more at all. In fact, they might even be less because now we do camping vacations and spending time in the neighbourhood with bikerides and playing when we might have been out spending money. We have exactly the same goal as you: retire by 40, and we’re pretty much there already (I’m 37).

    • We live in a 2 bedroom condo and it’ll be fine with one kid. I don’t think kids cost that much money either! My parents raised 3 kids and they were never wealthy. You’re right about the kid cost canceling out “fun” money. We are too exhausted to go out and spend money these days. 😉 I’m also 37! Just 3 years left to reach our goals.

  3. Congrats! I like how you’re sticking to your guns. Same place for now, upping FSA, using every means neccessary to reduce expenses… Initial goal might take a hit, but I’m sure you’ll compensate for it. Plus, aren’t you supposed to aim high? Congrats again, look forward to more baby posts. Might need the advice one day.

    • We are in our late 30s so we are doing ok financially. It would have been a lot harder if we had a baby in our 20s like so many people. Our saving will go down a bit, but I’m trying to increase revenue streams so hopefully it’ll make up the baby cose. 🙂

  4. Pingback: Weekly Favorites, Gratitude, and Giveaways! « Budgeting In the Fun Stuff
  5. At the least, I know adding a kid onto your health insurance plan at work can cost several hundred a month. (I cost my parents $300 in health insurance premiums before I got my own insurance through work.)

    Sending your kid to extra curricular classes can be pretty expensive too, and these days, it helps to have a bunch of extra curriculars to get into college.

    Although, if you get a kid who is very diligent in school, they may save you a bunch of money on colleges in the future thanks to scholarships… (Also, my parents told us early on that we were only going to be attending public universities.)

    • The extra health insurance will be one of the first bill we see. We’ll deal with extra curricular activities in 10 years or so. 🙂
      Maybe it’ll be cheaper then. heh heh..
      Nothing wrong with public Universities right? We went to a public university and it was great.

  6. Love the ultrasound theme music — I may have to play that at our first ultrasound — my husband will love it! :))
    Congrats on the baby! I love all the frugal baby ideas on here. I am planning to purchase secondhand baby clothes and make baby food, like my mom did. She was a huge fan of pure applesauce and pearsauce made from our apple and pear trees, and she pureed everything else. My brothers, sister and I are all (somewhat) normal (I think) despite growing up on homemade baby foods.

  7. One of my friend send his two kids to private school and it cost $10,000/year each. That is so much money. I doubt our kid will go to private school. We live in the city, but our district is one of the best in the area so I think we are ok there. Thank you for your input.

  8. Wonderful news!

    We used a service-years ago- and it was cheaper than plastic diapers.

    Be careful of the “travel systems”- many have been recalled. Car seats should never be used (unless you know the person who used it and can assure yourself that they never dropped the seat).
    Invest in a good baby wearing sling.
    My daughter never used the crib- the baby slept in an Arm’s reach bed and then on the floor next to their bed. She also went from breast to “real food”. No baby food in their house.
    Find a good coop for childcare. That is also a good place to “trade clothes”.
    My daughter lives near a store that takes old clothes and resales them for less than $5 in the DC area. Our grandson doesn’t like new. “itchy”.

    Our children cost??? we have no idea. They are the driving force, sometimes, to do things that we never expected to do- just to experience it with them.
    Our benefit- priceless—and we have retired on and off for years:>)

    • I just found out that infant car seat has an expiration date and the one we got is still good for another year. It looks ok and we are going to minimize driving the baby around. Thank you for your input, we’ll get a brand new car seat as soon as the baby outgrow the infant seat.
      That Arm’s reach bed looks really neat. I’m afraid it will be difficult to get the baby out of our room later on though. I’ll research more.

  9. Well, I’ve got an 11 month old. It really hasn’t been near as expensive as I was planning.

    1. Make sure you have good health insurance. Both the pregnancy AND new baby care will cost you an arm and a leg otherwise. This is NOT the time to do HD plans. And if theirs complications and you don’t have insurance…you’ll be in the poor house (one week in the NICU can cost upwards of 10 grand).

    2. Breastfeeding and cloth diapers are your best friends. Not only are they better and healthier for your baby all around…but you’ll save a serious chunk of change over the first few years. Our cloth diapers paid for themselves in 2 months…we are now hundred of dollars ahead. Baby formula is extremely expensive..if you can breast feed…do it as long as possible…start on solids at 6 months so the transition requires little to no formula.

    3. DON’T SPEND MONEY ON NEW BABY clothes. bug friends and family who recently had kids for clothes. Shop used and at cosignment sales. You’ll save a mint.

    4. The only things you REALLY need are a crib and a car seat at first. Everything else is not needed. The one other thing we go was a power swing chair…just wait…these things are magic at 3 in the morning with your arms are falling off trying to rock the baby.

    5. PLAN. the true expenses are later. If you are having a daughter, plan on it getting really expensive in the tween years…for boys…its more in the teenage years. Be ready for it. Start a college plan now (529s are ok but make sure you state’s financial health is good before you invest in one. Good luck getting that money back if you live in a state like CA or IL).

    6. ENJOY!. It truly will be the best of times and the worst of times. But there is no other way in life to reach the highs you will get with a baby (without using drugs). Take the good with the bad…its a rollercoaster ride.

    • Thank you for the tips, Michelle appreciates it too.
      We got a second hand crib and stroller system so far. We’ll see what else we need later. She has insurance, but I think we’ll up her FSA to a bigger amount to cover the hospital stay. I like cloth diapers too, but I think we’ll need to use a service since we use the common laundry room.

  10. RB40, don’t stress too much about baby finances, I got twins in 1 shot 🙂
    The first 12 months might be costly because of diapers and formula. if your wife breast feeds you would lower your formula expense. Following 12 – 18 months your baby will slowly start eating food you can prepare at home, again very little expense here.

    You might have some tax deductions because you have a child now which could offset some of the costs (in Canada we have 2400$ per child If I am not mistaken).

    All in all, you will love being a dad, especially if you get a girl. Her mom will be jealous of how much love your daughter will give you (in the first few years at least ;))

  11. I’ve got 2 kids and they well are truely screwed up the retirement plans – I mean working is the only way I can escape from them (JOKING!). Seriously, kids are the best, and while they might temporarily muck up the retirement calcs, they intangible benefits are out of this world.
    Also, I think the $355k is seriously underestimating the amount is ‘actually’ costs. But whether its $10 or $10million it doesn’t matter, its well worth it.
    Anyway – you’ve just opened up a new blogging challenge for yourself. A “mommy” blog, or “what happened to my life with lots of useful tips” blog.

  12. Congratulations! Great pictures, BTW. A very exciting and different time is coming for you. Even if you cannot retire by 40, having a baby will be all worth it. (I know what you think – look who is talking, the one who doesn’t want children. LOL) I am excited for you…

  13. Thank you! It is very exciting, I’m glad we waited a bit though. We are much better off financially than even 5 years ago. I think we’re going to be done with one, we are both 36 and one is going to keep us plenty busy.

  14. Congratulations RB40! A baby is a scary and an exciting thought! Don’t have much of advice since I’m a new dad as well, but I can tell you these little people will cost you a handful! Cuteness ain’t cheap! 🙂


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