In my experience the main cost of having a kid is not the stuff but the childcare. We’ve bought pretty much nothing. Switzerland has loads of awesome services. In our neighbourhood there’s even a toy library (ludotheque) where for 30CHF a year you can have borrow things as many times as you like. Occaisonally we buy something second hand from a facebook group and normally sell it again once that phase has passed. kids change really quickly.
Where it has made a massive difference is that my wife took 10 months off, five of which were unpaid. Which certainly put a dent in this year’s finances. At the moment our daughter is a public creche 2.5 days a week at a cost of over 1000CHF per month and both of us are working 80% to cover the remaining 2 days per week. From the end of August creche will go up to 1600CHF per month for 4 days per week. The cost of sacrificing earnings so we can do our own childcare or paying for someone else to do it is orders of magnitude greater than anything else we might have spent on them.
Very good question.
Before the baby my wife was working only 20%, teaching music one day a week in a private school.
Now that the baby is here, she agreed with the school to terminate her contract because she wants to take care of the child herself (being myself raised by a stay-at-home mum, i definitely see the appeal of this).
However she will start again in september giving drums private lessons on saturdays. The hourly rate is good enough so that having only a few students should compensate for her previous 20% job.
So, if everything goes smoothly, we should not be impacted too much revenue-wise by the arrival of the baby. we aknowledge that we could earn more money if both of us were working full time but we prefer to raise our child ourselves.
This is also the reason why I myself switched to 80% work time equivalent and my wife will start looking for 50% job from 2019. Eventually, when closer to FI, both of us will move to 50% working time. The beauty of FI is that you can raise your children yourself instead of seeing them only over the weekend.
Julianek, Great that you can continue to keep your savings rate up while one of you is at home to look after the baby. I found it difficult to save much while my wife was on unpaid leave. We have two quite average and roughly equal salaries so our 50% savings rate turned into a 0% savings rate when one half of the income disappeared. With both of us on 80% it seems to give a good balance of time at home, ability to save and remaining engaged at work.
1000000CHF, I’ve only been on 80% for the last couple of months but it’s has really improved my quality of life. I’m still a long way from FI but can definitely see the case for gradually ramping down rather than trying to earn as much as possible then retiring all at once.
Try to find out whether you can get subsidies from the village administration. In Zurich I think we should get a pretty nice amount of money for working 80/60 and having the kid 2 days at Kita. Here’s the calculator:
Good point. I think we will probably get a reduction in creche fees next year. In Geneva you submit your salary certificates and they charge you between 6-9% of your income according to where you sit on a sliding scale (see link). Because we were both working full time last year our fees are based on a high level of earnings, with unpaid leave and now reduced hours this year we’re getting stung for high fees just as our incomes have reduced.
Next year this will all be reversed so it’ll even out in the end.
I thought so too, but I am LONG behind with my tax declaration. So it would NOT even out in my case in the end (once my kid is in school, I don’t get any money from them any more). So they allow you to send the salary statement from last month and then they calculate with actual data.
Yes, I have one in my village, although truth be told most of the toys there are, let’s say … rustic.
Once you have a kindergarten aged kid, he wont be interested in wooden puppets, he’ll want a Spiderman figure, a radio controlled Bugatti Veyron and a light saber, because that’s what his friend have.
Coming back to childcare, we also have the tariffs calculated proportionally to “Nettoeinkommen”.
The formula used to calculate it is based on “Total family income plus 5% of capital assets (as on tax declaration) minus fixed deduction based on family size”. Good to have mortgage, as it helps to keep the capital low (or negative). We were paying approx. 50% of the full rate for “Kindertagesstätte”, waiting for the “Tagesschule” calculation now.
Because it costs 125 CHF per day and is not in our village (and in the other direction of my work) so I have to take the bus which only goes there twice per hour. I think it will be easier if we have someone in our village where I can walk to get the child.
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