It is often quoted that it costs $250,000 to raise a child. That high number is meant to shock, to evoke outrage over the high cost of living in the United States. But how high is our cost of living really? This number is hard to track down given variables such as location, and it is true that the cost of living will vary depending on where you live. However, there are many examples from all over the country that show you can live easily, on $40,000 or less, given some flexibility.
My personal goal is to get my families spending below $35,000, and this includes a mortgage payment around $15,600 per year. Honestly, I don’t even notice how much *extra* Little Miss TJL costs us. In fact, if I truly thought that it would cost such an outrageous amount to raise her, couldn’t I just match what I spend on her in a low-fee index fund? Would I hardly notice that as well? It might end up being a great savings plan, and an extra $250,000 plus interest in my pocket.
Taking the step to actively secure a bright financial future is actually pretty easy once you get past the psychology of it all. I went all in, saving >50% of my take home pay, because I want it so badly. You might take it in baby steps. Try investing $50 per week, then $100. Look at places to cut wasteful spending in your budget, and invest the difference. Keep it simple and invest in low-fee index funds (Vanguard has some great low-fee options). You can even set this up automatically through an electronic bank transfer. The sooner you start, the sooner you can watch your net worth grow, like these folks in the Church of FI.
And now the Expense and Net worth Reports from the blogosphere!
The Jolly Ledger (expense report)
The Jolly Ledger (net worth report)
1500 days (August’s performance update – published end of September so I’ll include it here)
Retire Before Dad *new* reports investment income
Dividends Down Under (Dividend Update)
Dividends Down Under (Savings Update)
Money Commando (net worth)
Money Commando (Investment Income)
All Church of FI articles are archived in Featured Links on the Church of FI.