Episode 059 – How to maximize savings with children | Matthias

Episode 059 – How to maximize savings with children | Matthias

Hello everybody! It’s Sunday morning and Alvar and Matthias address some questions from the community: the main theme is ‘how can you maximize your savings while raising kids?’ and Matthias will become our case study. We will review how he manages many aspects of his life to achieve an optimal balance between saving and using money. Enjoy!

We also talk about:

  • Subsidies and tax savings for children in Europe
  • Children and career
  • Relationship costs!
  • Frugal holidays with kids
  • Single parents
  • Side hustles

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Maximizing savings while having kids in an FI perspective

Matthias has a 5 year old son and a little daughter 9 months old: he breaks down for us the money movements that have kids involved, typical daily expenses. Childcare, transportation, food, clothing, diapers… In Germany the government supplies subsidies depending on the economical situation of the family, relatives can contribute, and this all adds to define a monthly quote for raising children, that can be taken into account for an accurate planning. A minimalist style of living can definitely help, identifying unnecessary expenses and making the most of available assets.

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Saving for children in the long run

Every month Matthias keeps a part of what he receives from the government for each children and invests it in stocks or ITFs, so that they will have some funds for college or other needs when they turn 18. Something to be aware in Germany is that if the investment is done under the kid’s name, that money actually becomes kid’s property. Again, frugality can help increase the overall saving rate.

Planning a family trajectory for FI

Many FI topics can come in here: geoarbitrage, remote working, homeschooling, all the tools that people on the movement have at disposal to build an optimal life trajectory to reach financial independence can be modulated in order to include children. Again, saving percentage is the key factor, but always keep in mind that a balance between saving and enjoying life is definitely more important.

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5 thoughts on “Episode 059 – How to maximize savings with children | Matthias

    1. Which sounds so logical but I can imagine is pretty tough for a lot of parents. do you have any specific things you do yourself? If you happen to have kids 🙂

  1. We choose to stay in the same appartment. I started a stock savings account for both off them and try to teach them about value of money and how to set goals for investing. We bought a lot off used stuff for them and try to sell it as fast as possible when they don use it anymore.

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