Financial Independence With Kids: Our Strategy for 3 Kids

In the previous article, we explained why our family chose semi-retirement instead of FIRE. But that raised an important question that challenged us:

How can we still achieve full financial independence if we stop investing earlier than most FIRE plans suggest — while our family is growing and future costs remain uncertain? How do we finance our lifestyle until we reach full financial independence? And what will change once we consider ourselves semi-retired?

In this article, we’ll share exactly how we approach financial independence with kids.

FIRE With Kids: Is It Still Realistic?

Many people assume that pursuing FIRE with kids is nearly impossible. Higher expenses, childcare or school costs, and less flexibility can make aggressive saving much harder.

But in reality, pursuing FIRE with kids doesn’t necessarily mean following the exact same strategy as someone without a family. It often means adapting the approach.

For some families, achieving financial independence with kids means increasing income through side hustles — like Our Rich Journey, a family of four from the US who retired around age 40 and moved to Portugal. For others, it means investing in real estate to scale income and grow their investment rate through rentals, like Road to FIRE, another family of four from the US.

For us, adapting the FIRE approach ultimately led to the idea of semi-retirement.

How Financial Independence With Kids Is Different

Back then, when we started our FIRE journey, we had only one child and maintained a high savings rate of over 65% without feeling like we were missing out on anything. Then we had our second baby, welcomed our third last summer, and at the same time inflation raised our costs in many areas by up to 50%, especially childcare and food expenses.

And that’s when we realized our situation had changed in several important ways:

• Our expenses have grown tremendously.
• Our priorities have shifted (we decided to pay for a private Montessori school for our oldest).
• And our schedule has become less flexible.

Our three kids bring us enormous joy and purpose in life, but they also introduce uncertainty when it comes to future costs like childcare and education, which has impacted our FIRE journey.

Because of this, we realized that pursuing financial independence with kids requires a slightly different strategy, especially because for us it’s not only about rising costs, but also about the following factors.

When Baby #3 Changed Our FIRE Plan

The birth of our third baby made something very clear to me: time is passing incredibly fast.

When I look at our oldest child, I sometimes feel like the early childhood years went by in the blink of an eye. Before you know it, they start school — here in Germany that’s usually around age six or seven — and suddenly they’re gone for most of the day. Life shifts from living together to more of a parallel routine.

And while I truly enjoy working and believe it’s important for our kids to learn, grow, and develop their character and skills, I also feel a strong desire to preserve these precious years of childhood. If possible, I’d even love to stretch them out a little longer — at least until they reach their teenage years.

Our third baby made it clear that I don’t want to wait another decade before stepping into semi-retirement.

We’ve already spent six years pursuing financial independence with kids. My hope is that over the next four or five years we’ll make enough progress to reach semi-retirement around age 45.

But that’s simply our current plan. If we reach 45 and decide to continue our Semi-FI journey until 50 instead, that’s perfectly fine too.

We’ll see where life takes us.

Our Family Strategy for Financial Independence

Instead of abandoning the goal of financial independence, we adjusted our approach. Our strategy for financial independence with kids is simple, and built around five core principles that guide almost every financial decision we make.

1. Consistent investing

Just because we decided on Semi-FI instead of traditional FIRE doesn’t mean we stop investing. We still prioritize investing consistently in diversified index funds and allow compound growth to work over the long term, helping our money continue growing over the next decades.

2. Maintaining a strong savings rate

While our savings rate has fluctuated depending on our life circumstances — for example during my two-year parental leave when our savings rate dropped to around 30% for one year — we have consistently aimed for a high savings rate. And it worked. Since starting our FIRE journey back in 2020, we have managed to maintain a savings rate between 50% and 65%.

Because of that experience, we believe financial independence with kids means prioritizing saving and investing. What helped me was creating The Ultimate FIRE Budget: A Frugal Values Based Budget.

A small example is our family car. Even as a family of five, we still drive an old, small car. Many people probably think we’re crazy, but for us it’s simply the result of prioritizing saving and investing a significant portion of our income to make our dream of early semi-retirement possible.

3. Avoiding lifestyle inflation

I truly can’t wait to start working again and see my salary hitting our bank account. During my two-year parental leave it sometimes felt like our FIRE journey was frozen. But even while living as a family of five on one income, we still managed to make progress.

Now that I’m returning to work, I’m excited to accelerate our progress again. At the same time, we plan to keep our lifestyle relatively stable so that the additional income strengthens our financial foundation for semi-retirement.

4. Prioritizing flexibility

One thing became very clear to us: instead of chasing the fastest possible path to early retirement — which would likely require both of us working full-time in our corporate jobs — we prefer gradually increasing our time freedom along the way.

For now, this means continuing to work part-time. In Germany, this currently means a maximum of 32 hours per week until our youngest child turns three.

And this mindset ultimately led us to choose semi-retirement and freedom along the way.

5. Growing our income in a sustainable way

While saving and investing remain the foundation of our strategy, increasing our income can also help accelerate our progress toward financial independence with kids. Over time, this may come from career development, new opportunities, or projects we enjoy — like this blog. The key for us is to grow our income without sacrificing family time or flexibility, so that any additional earnings strengthen our financial foundation while still supporting the life we want to live today.

Our Philosophy: Freedom Along the Way

One of the biggest lessons we learned during this journey is that financial independence with kids is not only about reaching a specific number.

It’s about designing a life that works for our priorities.

We still want to reach full financial independence. But we prefer building a path that allows us to enjoy more freedom along the way.

For our family, that means prioritizing:

• time with our kids and for ourselves
• meaningful work (like building this blog)
• financial security
• freedom over our schedule

What Will Change Once We Are Semi-Retired?

For us, semi-retirement is about changing how we work. We plan to focus on flexible work that allows us to control our schedule and spend more time with our family. Work becomes something we choose rather than something we depend on financially. This shift gives us the freedom to prioritize meaningful projects, family time, and personal growth while still maintaining financial stability.

And for us, that’s exactly what financial independence with kids should look like.

How We Plan to Finance Our Lifestyle Until Full FI

We plan to still earn a modest income through flexible work we enjoy in semi-retirement. This will cover part or all of our living expenses while our investments continue compounding in the background.

Maybe we’ll start withdrawing from our portfolio to cover the other part — or maybe not. It really depends on how the next few years turn out.

That said, Marc and I are still running the numbers and exploring different options. But there is one semi-retirement strategy that may work better for us than others. I’ll talk more about that in the next post.

The Risks We’re Aware Of

Pursuing semi-retirement also comes with risks, and we’re fully aware of them. High inflation, unexpected family expenses, or changes in income could slow down our progress toward full financial independence. That’s why we track our progress closely, so we can manage these risks.

Next in Our Journey: The Exact Semi-FI Path We Chose

Understanding how financial independence with kids works is one thing. But how do we actually turn that into a realistic financial plan? And which semi-retirement strategy works best for us?

In the next article, we’ll share our exact plan to semi-retire between ages 45 and 50 — and how we’re working toward that goal as a family of five on the path to financial independence.

Want to explore your own path to financial independence today? Start here with our “Financial Freedom Pathfinder” to compare different Semi-FI paths side by side.
And if you’d like to learn more about how we started our Semi-FI journey, check out our About Us page.