Even though we’re trying to get pregnant, I didn’t consider any baby or child-rearing expenses in my 7-year FIRE projections.
That’s because built into my calculations, is our travel budget of 300 EUR per month, or 3600 EUR per year. I imagine if we have a child, we would no longer travel (far) while s/he is still young, so our travel budget could then be converted to baby expenses.
That, plus 184 EUR per month of Kindergeld (supplement from the German government for all kids until adulthood), would give us 484 EUR per month for raising a child.
In Germany, this is a decent amount as long as housing is already covered (which it is in our budget).
We are also both publicly health insured, so a child will go under one of our policies at no extra cost.
Having a child will change our savings rate though. For the first year, I would be on maternity leave and earning only 67% of my income.
Since Germany allows Elternzeit, or parental leave for the first 3 years of having a baby, that would also be 3 years of earning 67% of either mine or Mr. German’s income depending on who takes the leave.
While we don’t know yet, we have discussed that Mr. German should take Elternzeit for 2 years after my maternity leave, and I’ll go back to work. This is because Mr. German wants to look after our baby, plus I think he could do a better job at accessing services for the baby (doctors, etc…) since he’s the German speaker.
After the baby reaches toddlerhood and we are not able to take Elternzeit and still not financially independent, we could use the 484 EUR to find a Kindergarten (daycare) placement.
In my line of work, I can also switch to freelancing and earn more while working less (and working from home). Not that I think I could eliminate daycare costs entirely while also working full-time from home, but it could help expenses. I plan to freelance in a few years anyway, whether we have a baby or not.
So I’m optimistic that if we do have a baby, we will be able to raise the baby comfortably without getting off track on becoming financially independent in 7 years from now. Being a parenting n00b, I’m probably missing some major cost, but ahhh, what is life without surprises. 🙂