My wife and I are relatively early in our financial journey (no kids yet, saving towards a house). We've talked about FI, and would plan for it in theory, but we have no idea what our expenses will look like in the future. Does anyone have any thoughts/advice/resources for how to think about it?

Here are a few points to start thinking about! 1. Start by understanding your current expenses: Track your current spending habits to understand where your money is going. This will give you a baseline for your current lifestyle. 2. Plan for major future expenses: While it’s impossible to predict all future expenses, you can anticipate some major ones like buying a house, having children, their education, and healthcare. You can research or seek advice to get an estimate of these costs. Many people on the group here would be happy to help you estimate. 3. Create a flexible financial plan: Your financial plan should be flexible enough to accommodate changes in your life. This is where tools like Monte Carlo simulations can be useful. They provide a range of possible outcomes based on your current situation and allow you to adjust your plans as your life changes. 4. Start saving and investing: The earlier you start, the more time your money has to grow. Even if you’re not sure about your future expenses, starting to save and invest early can give you a financial cushion. 5. Regularly review and adjust your plan: As your life changes, so will your financial needs. Regularly reviewing and adjusting your financial plan can help you stay on track towards FI. 6. Involve your spouse in financial planning: It’s important that both of you are on the same page when it comes to financial planning. Discuss your financial goals and make decisions together. Remember, the journey to FI is not just about reaching a certain number in your bank account. It’s also about living a fulfilling and purposeful life. So, while you’re planning for FI, don’t forget to live and enjoy your life now.

Thank you so much! I think our biggest issue is #2, particularly the cost of kids. I have no sense of what it costs to have kids, and I've seen scary numbers, e.g. someone saying that it's a struggle to get by with $350k/year. I'm assuming that's inaccurate and/or is for a family with a large number of kids, but I don't have a sense of the ballpark cost.

I wouldn't recommend spending too much time planning for kids. Plan for everything else and update your plan as you get each kid is my normal recommendation. Hashem brings brachos at each matziv

It makes a difference to other things, e.g. career planning. It has a direct impact on what companies I'd consider applying to when I look for a new job, for instance

Agreed. The software will help with all that. Then as you add kids and kids goals the calculations will redo and give you updated estimates for planning

Oh interesting! I'll try it out

I personally don't add children into people's plans that aren't born yet, but feel free to if you are comfortable with it.

Hey @freezing-artist-98583 this is great that you are being proactive. Basic question but are you budgeting and keeping track of your expenses like Baruch suggested?

Yup! We have a budget, we track our monthly expenses, we have a healthy savings rate, et cetera. If we weren't expecting our expenses to change significantly in the next few years, we'd have a very clear path to FI

Yeah it sounds like running a simulator will be the best bet you have to easily play around with different possibilities.

That makes sense. Thank you! 😄

Also, the whole "struggling to get by on $X" is often an absurd statement. Everyone has a different definition of "struggling." Most people tend to "move the goalpost" (to borrow a phrase from The Psychology of Money—great book), meaning that as they earn more, the bar for "normal expenses" increases. Not moving the goalpost (or moving minimally) is a huge, huge win. If you can advance your career without upgrading your lifestyle, you are waaay ahead of the game.

Agreed. I haven't changed my budget even as my salary has gone up by multiples.