Dear all,
Is FI of a family with kids realistic? I believe that it could be possible when kids have finished their education and are on their own… but before?
Currently both in the early 50s, 2 teenagers at school… saving to pay off the house as soon as possible (mortgage free in 5 years). Additionally twice 3a and one 3b.
Any comments?
B
It depends on the savings rate. In my case I’m supporting with my good IT salary my non-working wife and a one year old. Expenses for a small baby aren’t that big, and in my case my savings rate even increased because I’m travelling less than before. I guess the major expenses will be day care but on the other hand then my wife will start working and contributing to our savings, and hopefully we will increase it to 60-70%. I hope to get to FI before my son will be a teenager actually - in 10-15 years perhaps. But since we’re planning a second baby, it might be slower than I initially planned. Or maybe we will get better at increasing savings and we will achieve it even earlier - who knows?
It is hard to find the balance between the fully selfish personal FI and the other extreme which is working as much as possible for the financial security of the kids. Soft factors like worklife balance and Quality time with the family are hard to quantify…
In my situation, we are both working 100% which allows us to put apart a decent sum per year, the question is to find the right moment to reduce the workload….
I would spend more time with small boy rather than with a growing teenager (IMHO)
I don’t have kids, but for what I know Switzerland gives you a lot of help raising kids. Someone might show you some numbers…
@baffo66, I had similar doubts and thoguhts last year when I was considering moving from 100% to 80%. Here’s the thread:
In my case, one of my goals in reaching FI was to spend more time with my family and enjoy my hobbies, so I started working 80% this year to have a little bit of FI-like life here and now. I don’t regret it, even if it will extend my way to FI for a couple of years. It’s a great experience. I don’t know if I’ll ever move back to 100% - probably only if my son will go to school and I’ll find a job more interesting than my hobbies, or I’ll want to pump up my savings rate - but it’s very unlikely. I’ll rather switch to self-employed consulting and only take projects from time to time eventually.
I believe we should focus on living a little bit “like FI” before we reach the number. Postponing all our plans and dreams for years on a way to FI is a very counterproductive strategy. Like in traditional retirement, many people actually reach the number (or retirement age) and they have no clue what to do with their life because they weren’t prepared for it - they only focused on the number, not the essence.
PS. Mad Fientist wrote about this in his"First year of freedom".
I disagree!
Mothers only get like 3 months maternity leave, father 1 day, public child care is non existing until kindergarten, and since my child was born I receive 200 CHF/month allowance. Not really “a lot of help” from my point of view.
I agree with that. On the other hand, I earn so much here that I can afford additional leave, non-working wife or even full time kinderkrippe, so I don’t care too much about the state support. I prefer this way, rather than additional state care with lower salary (and/or much higher taxes).
I agree here as well. If these are all benefits that the Swiss law provides, then indeed it is not much. But that’s very good! Why should the state provide help for people to raise kids? Or if you transform the question: why people without kids should support people with kids? I don’t care about future generations supporting my retirement, I will take care of that on my own.
I had a quick look into tax calculator for canton Zurich and I see that there is a 9000 deduction of taxable income per kid, which should result in 2000-3000 lower tax per year. If anything, I would maybe increase this deduction instead of giving free money to parents.
You earning that much might not represent much of the population though. I think longer parental leaves would be very beneficial for the family: a 4/5 months old baby having to go 5 full days a week at the krippe feels plain cruel to me. Women who take additional time off after giving birth might have a hard time returning to the same position.
Sometimes I am shocked by the selfishness I read in the FIRE community. People without kids might need doctors and nurses taking care of them when they are sick and old, fire brigades, police, taxpayers. Even from a selfish point of view (at least in developed countries), it makes sense that the state helps couples with children, who are replenishing the amount of citizens.
I also share your opinion.
Are 2500-3000 CHF/month (or more in some areas) costs for a kid until he’s going to the Kindergarten REALLY fair ? After that, if your kid is in the public system and both parents work full-time (without grandparents to support), daycare (lunch, afternoon, holidays) still costs around 1300-1500 CHF/month until he is a teenager (what most people still ignore)
So what is the consequence of such high daycare costs in Switzerland?
The lowest-income earner of the couple (not even talking about single parents…) will mostly not be able to cover these costs with the salary, especially in case of 2+ kids (2 kids = 5000 bucks/month minimum. So 60+k per year with a tax deduction of 4000-6000 CHF for Zurich). And she/he will have to stay at home for a while - even if it is not a real choice. And believe me, after a certain time, I see a lot of mothers who desperately want to come back and work, whether full-time or part-time, and who struggle like hell to find a job due to discrimination and “inactivity” on the CV for some years. And get very frustrated about the situation. Financially ? A disaster on a long-term view, unless you stay married to a rich guy forever (without any “life accident” - divorce, health issues, job loss etc).
Of course it can be a choice to stay at home, but looking at the level of the daycare costs, I doubt that there is a deliberate choice for the lowest incomes.
So I definitely think parental leave shall be longer (16 weeks are way too short!), and shared between mum and dads.
I think there is a compromise to find between fully funding daycare and not supporting it at all, isn’t it ?
I wonder why Kita / Kindergarten is so expensive in the first place. If you subsidise it, the total cost will get even higher. I agree that with 2-3 kids it often makes more economic sense for one of the parents to stay at home, even if that’s not what they want.
I’m surprised you call me selfish, since people usually have kids out of their personal interest, and not out of some patriotic duty. I also wouldn’t worry about too few doctors or firefighters in the future. If only they are paid a market rate, people will flock to professions where they are needed the most. You want me to pay money for your kids, how is that not selfish of you?
By the way, families which own a house, where both parents are working, hire a full time babysitter, usually a girl in her early 20s, who lives with them and also cooks for them, and gets 1000-1500 CHF per month for this.
Please add few hundreds of francs for the extra room in the house, food, insurances, and pocket money as I think it is quite unfair to pay a person 1500 CHF for a full-time job, which I assume is far more than 40 hours a week if this poor young lady has to take care of the kids from the morning until the evening and cook for the whole family (so working from 6-7 AM until 7-8 PM, I hope including some breaks). If I understand correctly what you mean, this looks like slavery.
That’s the socialist mindset right there. You know what’s better for the people than themselves. Slavery… please. These are young adults, often without proper education, who will not get a good job in their countries of origin. Here they get free accomodation, free food, and still as much money, as they would get for a full time job in their home countries. Allow people to make their own choices. Don’t forbid them for their own (!?) sake.
Btw I’m not saying this is a solution for the problem, it was just a side note. My opinion here is not set in stone. I just feel like paying people money for having kids is wrong.
To add a bit of a different perspective on this topic. If you don´t like how it is, there are a least a few options available: vote (if you can), use family as help (if you have any), move to a neighbouring country (pay the extra tax) etc.
What Switzerland is smart about it that it keeps the taxes and government lean and exposes the (sometimes high) costs and let its citizens participate in that cost. It is also no overpromising or handing out money everywhere. Other European countries think differently and are overpromising in many areas (retirement benefits, future quality of public services etc.) which will leave many disappointend in the next 10-20 years. Just check the ratio between retired and working people and you see where it will end…
I´m a father in CH and we as a family are so far very happy with the limited support and the high quality of the services received. It is a privilege to live in this small and stable island surrounded by stormy clouds.
Thanks for your opinion! That’s how it is. In Switzerland you have a competitive economy with social care that is not overblown. And that attracts people who want to earn well and spend on what they need to, instead of having a huge chunk taken away by the government and then the opportunity to use stuff they might not even need.
Well good point, you convinced me on that one. People are free to choose
I however still personnally feel uncomfy to take advantage of (abuse ?) that situation, and I prefered to hire professionnals for my kids when they were babies. A Tagesmutter costs 4-5k for a 40 hours week, everything has a price and fortunately everyone is free to choose and take the risks.
I however admit that I also heard good experiences from friends with young au pairs, not only bad ones where parents spent a lot of time and efforts (so money) to find a suitable person. And same with Tagesmütter and Krippen.
The fertility rate in Switzerland is 1.5. That is way bellow the replacement rate and poses a pretty big problem for the pension system es well as the economy.
For the whole country it may make sense to ask if it makes sense to support families as children will become tax payers at some point and pay for themselves. Programs that help to pay childcare have also the more direct benefit of incentivize the would be stay at home parent to work. That generates tax income and has some economic benefit that way. I wouldn’t be so quick to assume that it is a net negative for the average tax payer.
Even if you don’t have children, you rely on it that some other people have them. Companies can’t generate returns without a continuing supply of workers. Someone has to produce all the stuff that you need.
No problemo, they just import people from EU like everything else
Well we did put a limit to that.