thoughts on parenting part iii – the future
Children, enjoying the future 1
It’s the series that just refuses to die – yes, thoughts on parenting is back and I cannot promise you this won’t be the last one!
A great comment from IPM got me writing about what the future holds for young families over the next 10-20 years, and so I thought it was fair to expand this into post.
IPM’s family are much older and so he (or she) has legitimate financial concerns about the cost of University, but for many reasons I am not really so bothered about it. I’ll get onto why in a bit but let’s whizz through some other things that came up before we dig into the real fun stuff.
expanding budgets as kids get older
This seemed like a common theme and it’s obvious when you think about it. I’ve waxed on about how baby TFS didn’t really cost us much for the first year but that is because she eats about 30 ounces of food a day and has no opinions on toys, entertainment, or what she wants to see and do or where she wants to go. This will undoubtedly change as she gets older and so we’ll be hit, potentially big time, in the following categories:
- Holidays – If we want to keep having 15 bajillion holidays a year it is going to cost us a lot more when she gets over first of 2 years old and then even more when she becomes an “adult” in the eyes of the travel industry which is apparently the age of 12 I’ve been led to believe. The likelyhood is that we’ll cut down on the amount of holidays we have or keep them less extravagant affairs but either way I can’t say for certain that this expense area will not balloon.
- School costs – Uniforms, materials for projects, dress up days, and the big one, school trips. It all adds up pretty quickly!
- Hobbies – I guess you can gently prod kids into certain hobbies and if anything is outright too expensive 2 just say “NO” but you can’t make them want to do purely free things all the time and it wouldn’t be fair to restrict opportunities. So the budget must make way or increase to accommodate such things.
- Food – I think after about the age of 2 most kids seem to eat more than their parents, being the rapidly growing lifeforms that they are. My already destroyed grocery budget is looking like it is going to take another pounding in 2018+!
I guess the main point to remember here though is that all financial plans are liquid, baby!
I can change my mind at any time and if I have to keep working (part time still or freelancing… hopefully!) until I’m, say, 55 or 60 rather than 50, which is roughly what we’re on for right now… then so be it. I know this doesn’t chime so well with the “march quickly to FI then down tools forever” brigade but this was always my strategy from the offset, having realised that I started too late, didn’t earn enough money and most importantly do not have the impetus to climb the ladder 3 to earn such money any more. So if the ER date moves away from me for a few years to accommodate having some awesome family holidays and providing for the family, nada muchos dealos… si?
the big and scary future
Now that’s the personal budgeting stuff which we are somewhat in control of, but what of the bigger questions of the future: Jobs, education, government, society. What is going to change over the next 20 years as TFS Jr becomes an adult?
A BIG FUCKING LOT
That’s the short answer. Just think briefly back to 1997 and how much has changed since then, and we’re only just getting started with massively disruptive technologies like robotics, AI, nano technology, 3D printing and space travel (again).
Education – I have a sneaky suspicion that (traditional) Universities will be increasingly irrelevant over the next 20 years for actually getting a job. There are so many good online courses already with far more up to date information than then behemoth physical schools and Uni’s can put together, who are so slow moving that by the time they complete their curriculums they’re woefully out of date already.
Look, I’m not saying they’ll disappear and it’s likely that if you want to be a Doctor or a Lawyer then you will still have to go to Uni (although maybe robot brain surgery will be a thing by 2037!) but I think 90% of Uni degrees will be totally useless by the time little T gets to Uni age.
Entrepreneurial streak – If TFS Jr is a chip of the old block then I’m not sure the whole, School, Uni, Job working for the man path will be the best one for her in the first place, so I will do my best to open up other routes for her to “work” and earn money. The gig economy is much maligned right now but for some types of people this would suit them well. Look… again maybe I’m totally wrong about this one and she will be a square peg that fits right into the square holes that society kindly makes for us, but genetics says the chances she won’t be… The key is to make sure all options, even ones I cannot conceive of right now, are open and not to push her down any one route just because that is what everyone else’s kids are doing.
It’s also worth noting entrepreneurship for example may have start up costs and I’m not against providing the money for that (or indeed part paying for going to Uni if she really wants to) so we will be starting up a Junior ISA and saving into that very soon, so it’s not like I’m just sticking my head in the sand and going “la la la this will not cost me any money in the future” 🙂
Robots, AI, and UBI 4 – The results are in and it’s unanimous – The robots are coming for your jobs. They’ll even be coming for my job eventually, it can’t be that long before AI can easily design and write the code necessary to build a website can it?! Society needs to find a way to solve the problem of millions of underworked individuals. They need some sort of money to survive and they need something to keep them out of trouble. I don’t have to worry about the second one for TFS Jr because again, if she is anything like Dad, she will more than a lifetimes worth of ideas and creative juices buzzing around her head to keep her busy.
I’m hoping society and/or the government or whatever can sort their shit out enough to solve the money problem for the most part. Something similar to UBI seems to be the most likely solution, which would mean the pressure to save tonnes of money up for her education (or whatever) would be massively off. There is no way I’m banking on this or suggesting people should be, but it’s definitely something worth considering if the alternative is to work 5 extra years to get your SWR down from 4% to 3% just to “be on the safe side”. It seems most people err on the side of caution in the FI world but I think that wasting your life working a job is the more risky strategy and so would advise you get some freedom back as soon as you can, and if bumps in the road appear later on you can just change your strategy, being the adaptable intelligent human/chameleon hybrid that you are 5
Jobs – The job market has changed a lot over the last 20 years and even more dramatically quickly over the last 5, what with Uber and all of that lot shaking things up. I can only see disruption continuing and who knows what it will be like by the time TFS Jr gets to working age. Maybe “kids” will be in education until they’re 30 by that time as there are so few jobs about? But if so surely the cost of this would have to come down? Maybe there will be a huge boon of new jobs created out of new technology that we can’t even fathom yet? This is one that is not worth worrying too much about but is actually kind of fun to think about, it will make a big impact on what our young children grow up into doing with their lives, obviously, but there is not really much we can do about it, so just sit back and enjoy the ride and as always remain adaptable!
final thoughts – optimist or pessimist?
I guess it all depends on whether you are an optimist of a pessimist about the future, both your own and for the wider world?
I tend to be an optimist, not an outrageous one, but definitely a semi rational one, I would like to think at least 🙂
It is a fair stance to take that you should do everything in your power to provide for and protect your kids and so many people turn themselves into pessimists, thinking of all of the worst scenarios that could happen and trying to guard against them. I think being too over the top in this regard means you end up missing much of life, and could even turn your mini you into a bit of a psychological mess in the process!
We all know that just giving kids exactly what they want whenever they want it is not the recipe to bring up a well adjusted 6 human being. They must go through their own struggles to grow, learn and build resilience, as Mrs BITA eloquently points out.
I get the feeling through reading Jim’s blog he considers himself to be a bit of a pessimist, but he has gone for the parenting thing and I would suggest that simply having kids in the first place is one of the most optimistic things a human being can do. Think about it… You are basically betting that the human race will survive for at least another 100 years without trashing the planet or destroying ourselves, otherwise why oh why would you be so cruel as to bring a little babe into the world?
Once you frame it like that, maybe you can get over your pessimistic side as a parent as well and start to enjoy life as a parent a bit more without worrying too much about the big scary future?
Let me know what you think!?
Massive caveat: I realise I am still very new to this game and so don’t want to come across as a know it all a-hole! I am just spewing out my thoughts and welcome a healthy discussion on the points raised, so feel free to shoot me down in flames peeps! 🙂
Notes:
- The one on the right is not actually a robot child (although that would have been cool) but my nephew, whose face I didn’t feel like plastering over the internet! ↩
- Horse riding/owning a horse is way out of the question, for example! Unless she promises to become a champion Jockey of course, haha! ↩
- In laymen’s terms: I just cannot be arsed ↩
- Universal Basic Income ↩
- Lizard people ruling the earth… now that is one future prediction too far! 🙂 ↩
- Hate that term but couldn’t think of anything better in this context… sorry! ↩
Kids cost more when they grow older.
In Belgium, school is free to a certain degree: we have a monthly bill ofaround 30eur per month.
They like to swim: hard to do that for free in the Belgian climate. And we want them to beat ease in the water.
We foresee around 130 per month per child for activity and clothing.
The travel budget now has almost doubled. And we look for places we that are kid friendly. Croatia will be the next test we take.
As for the robots: yes, they are coming. Did we just saw the beginning of the end?
Around a £100/month for that sort of thing seems more than reasonable I think! I bet there are people out there spending £500/month or far more if private education is the favoured method of schooling.
Travel is something we are at least totally in control of where we go and what we spend, although “sorry no holiday this year” is clearly not going to be an option 🙂
I didn’t go abroad till I was 10 and even then that was a school trip, and I loved every one of my family holidays (although it’s often cheaper to go abroad nowadays when considering total cost of trip!)
Croatia is awesome and I can’t imagine the kids won’t love it. I think it’s still pretty cheap over there once you get there as well.
Yesterday, i watched my 1 year old son flip the washing basket up side down, scramble on top of it, precariously stand then wobble the basket with a huge grin on his face.
I looked at the ominous hard stone hearth next to the basket, took a deep breath and thought of the FC Kahuna lyrics “Dont think about all those things you fear, just be glad to be”.
I resisted the urge to rush over and save him, enjoyed watching him having a blast for the next couple of minutes before he clambered down safely.
I’m trying to adopt an approach of enjoying my children enjoy themselves without “saving” them from the disasters in my head. So far, its been much more fun for everyone.
I’m now struggling to relate this a lesson about kids budgeting, robots or university. Straight after reading the post, it seemed relevant though….
Enjoyed the post TFS, ta.
Haha, brilliant skills from SG Jr there!
Yes I’ve been much more chilled out having become a father than I was around babies/young children beforehand, I always thought they were total morons just minutes from serious injury. Turns out they can surprise you and even when they do fall, they are pretty hardy little things and tend to just bounce of hard surfaces anyway and so small knocks are forgotten about in seconds or minutes at worse.
Glad you enjoyed the post and yes I guess there is an analogy to all the fears we think about for the future of our kids as well!
Enjoy your weekend with the family 🙂
Re holidays – the biggest hit comes in a few years time, when you have to take them in school holidays/peak season – truly painful. Even something that seems modest like camping in France or a cottage at the British seaside is ridiculously expensive in August – you start to see why people go on all inclusive packages to Mediterranean resorts…
The other issue with kids is social norms, particularly around stuff like birthday parties. Yes you can avoid the worst excesses, but I’m sure you’ll spend far more than you thought possible/sensible on party bags, plastic tat and the like, just because no one wants to be thought of as mean/tight, or (even worse!) some kind of non-conformist weirdo parents. Though now I have teenagers I think the latter is inevitable, or so they like to tell me!
‘Activities’ is also a tough one. Looking back, there were certainly things I stumped up for, especially when they were still rather little, that were a total waste of time/money. But the problem is you can’t know in advance what will light their fire, and one of the things I thought important to provide for my kids is the chance to learn and develop from a range of different experiences/opportunities , so that they have interests in their lives that can spark their creativity and sustain them in the long term. So, ok, football and tennis turned out to be short lived, but how was I to know that first born would enjoy coxing and second born would love drama?
Anyway, it’s a great journey, as you’re finding out! Love hearing about your reflections.
“The other issue with kids is social norms” – Yep this is what worries me the most. Having felt like I’ve only had a few years enjoying being totally free from all of that shit, I know it’s going to hit me again vicariously through TFS Jr. It already is to a certain extent with the 1st round of birthday parties we’ve been too. We did manage to keep her birthday party to a sensible level (mainly by not inviting that many people… erm I guess that makes us unsociable weirdos haha?!). Once she gets a bit older and has the school age parties I guess I’ll just come to peace with that party bags etc are a thing, but I think there are other potentially bigger battles to be won and it’s not worth obsessing over little things like that as long as they are the exception rather than the norm. We’ll see how well this holds up over the next 3-4 years I guess though 🙂
Agreed that spending on activities is not a waste of money, and they should be encouraged to find their passion. I’m hoping that TFS Jr will enjoy coding gaming apps or something like that and be a millionaire by age 10… haha 🙂
As per @Redkite re activities, my friends talk about their kids’ football, rugby, ballet, gymnastics, piano, tennis, swimming, art and craft lessons to name a few. And it’s not just the cost of these activities, it’s the huge amount of time taken driving the kids to and from all these lessons, ie Mum/Dad’s taxis!
Still, TFS Jr will no doubt to learning all about personal finance from an early age, which will develop her entrepreneurial streak if she takes after you, so perhaps there, an opportunity to develop money-making hobbies/activities!
Yes I will no doubt become a DadTaxi in just a few short years, although I will push as hard as I can to keep things local so we can walk down to wherever the activity is together. There is plenty of stuff going on within walking distance of where we live so see no reason why we can’t do that, maybe apart from swimming.
Haha yes I am hoping so… see my comment reply above! 🙂
Hi FS,
Great post as usual. I think you are going to make a real success of parenthood and keeping on the right financial track. I only really seriously woke up to the concept of FIRE about 4 years ago and by then I’d already got 2 kids (then aged 10 and 8), but I was overpaying the mortgage and saving into ISAs for the kids.
So then I knuckled down a bit and started to pay a much higher rate into my SIPP and it’s been remarkable to see my net worth grow so much. I reckon I will now have the option to FIRE at 57 which may seem ancient to many but for me something of a miracle when I look at my peers situations. All this with a not “unspendy” family 🙂
So I feel with all your careful planning from a much earlier beginning you will be just fine.
I have saved up for my kids regularly but that money will be given to then on the basis that “that’s it”, there will be no more coming from that particular direction – and I’d like to fell that the way they are shaping up that they will understand and appreciate the sentiment. The oldest at 15 has already done a few jobs apart from the usual paper round and always looks to pay me back if she needs emergency money whether I accept her gesture or not. In short, she does seem to have the concept of the value of money. As for activities, every Saturday and Sunday morning whilst walking my dog on the local rec, I see a young dad with his two boys. They’ll start with Hockey, then move on to play tennis, football or cricket for a good few hours. He has all the gear and puts out practice cones for them. But he is doing a great job and saving money on organised sport for his kids, plus he gets to spend time with them. A win, win!
I have girls of course and one of them does love the dreaded horses. But we found a local horse rescue riding school where you can go for the whole day to help out and also get to ride for an hour. It’s £25 and still pricey, but as an occasional treat not too bad, and again the kids learn that horses need looking after.
One final thought, I listened to a financial guy on a podcast the other day and he likened kids finances to what happens when you are on an aeroplane and the oxygen masks drop down. “Take care of yourself first!”
Hi IPM,
First of all sorry for the delayed reply! I saw your long and considered comment and didn’t want to rush a reply then kinda forgot about it for a while.
Thanks for the encouraging words. 57 is still very early as you say, compared to at least 90% of people, even high earners.
Thanks for the reminder to start up an ISA for the little one! We’ve been a bit slow off the mark with that one.
Sounds like you’ve instilled a good sense of the value of money for sure. There is nothing worse than a spoilt brat who thinks money just comes effortlessly from the bank of mum and dad – see my latest post for some examples of those! 🙂
£25 for a whole day, an hour of riding and a lesson that looking after horses ain’t all that easy seems like a good deal for me. I wonder what TFS Jr will be into, it will be fun to find out.
Great final piece of advice there, I have seen a few examples of friends/acquaintances over the years where their parents have always put the kids first, in the most extreme sense. This sounds like great parenting on paper but going into debt to buy your kids their 67th birthday present because, well, they really wanted it and couldn’t do with just the 66, is not the best way to run your finances or bring up a child IMO.
Cheers!