Welcome to interview #6 in the FIRE With Kids interview series!
Meet Finn and Fiona, a 37 year-old couple, living in a major city in Israel with their two young children and dog.
The Fionist family is balancing frugality with intentional spending on an average income, with plans to semi-retire by their 50’s. They’re also blogging about their journey.
I’m grateful for the opportunity to get to the know the Fionists better through this interview. I hope that you enjoy learning about their financial independence journey as much as I did!
About the FIRE with Kids interview series
I designed this interview series to connect with and share the stories of other families with kids (or dependents) who are pursuing financial independence, with or without early retirement.
Reaching financial independence is a huge feat regardless of your circumstances. However, adding kids into the mix provides another layer of nuance and additional challenges.
I hope that by sharing different stories and voices, more people will find an example that they can connect with and feel empowered to begin their own FIRE journey.
We believe that families come in all different shapes and sizes, and all are welcome here. If you’d like to share your family’s story, please read my interview series intro post for further details and contact me.
Now on to the Fionist’s interview…
BACKGROUND
Tell us about your family
We are a family of four humans and a big black rescue mutt living in a tiny apartment in a major city in Israel. We are both 37 and our kids are in first grade and the two-year old class at daycare. Additionally, we adopted a puppy shortly after getting married who is now eight years old.
Our favorite things to do as a family is travel, both in Israel and abroad. We also like to bake, as well as sing and dance along to music videos.
Finn is a bookkeeper by trade and an amateur photographer by passion. Fiona works in marketing and loves planning vacations and obsessing about Eurovision. We were both born in the US, lived there as children and are American citizens, but neither of us ever lived there as an adult. We purchased our apartment in 2019 with a 70% mortgage, but with real estate prices soaring the value of our home has gone way up and we now own more than half of it. Israel is an extremely expensive county, which makes FIRE here even harder, but we are confident that it’s possible.
FINANCES
Do you budget and/or regularly track your expenses?
We track our expenses on a regular basis on a Google Sheet that we can both access and update in real time.
Besides income taxes, where do you typically spend the most money each year?
We are proud to share that we have gotten to the point that the most expensive line item on our monthly budget tracker is our investments.
Although if you add up all of the costs associated with living in our home (mortgage, utilities, city taxes, repairs, etc.) it totals about the same amount.
Our third biggest expense is daycare tuition. Luckily for us that will end in September as public school starts at age three here.
We love “value-spending” … what do you happily splurge on?
Splurge is a big word. We love traveling and make sure to have a family vacation each year. Since getting married in 2014, we have been to seven countries and four continents together. Our six-year-old has been to Europe once and the US three times, which is pretty impressive considering that we didn’t leave the country for the first two years of COVID. We have tickets to travel to the US again this spring.
We have also spent a considerable amount of money on private therapy. While we have excellent universal health care here, the coverage and accessibility for mental healthcare lags far behind that of physical health care.
What’s your annual household income and/or typical savings rate?
When we talk about our savings rate on our blog, we always specify whether we are talking about savings from our net or our total savings rate.
We are blessed that Israeli law requires employers not only to match our pension deposits, but to deposit twice as much as we employees do. Many employers also offer a Keren Hishtalmut, which is an additional investment plan that allows you to deposit 2.5% of your gross salary while your employer deposits an additional 7.5% (totaling 10% of your salary).
While we invest 30% of our monthly net income each month, all of the employer contributions bring us to about 50%. This means that each month we are spending and saving/investing about the same amount.
Do you have any income streams in addition to your primary job?
Other than dividends we do not have any consistent income streams. We love doing paid surveys, but we consider that fun money and not an extra income stream. It’s about $20-$50 per month. We use it for online shopping, eating out and recently saved up and bought a fancy mixer.
We each have skills that could earn us extra income (Finn does photography and Fiona does translation) but we don’t have the time or energy for side hustles at this time.
Do you have any debt? If so, what is your paydown strategy?
We have a mortgage. Originally, we were all about paying down the mortgage ASAP. However, that is until we realized that we could (on average – not this year) gain more in the stock market than we pay on our mortgage.
What’s your current investment strategy?
In addition to our pensions and other employer provided savings plans, our private investments are currently divided between P2P loans (30%) and US domiciled ETFs (70%).
We keep talking about getting into real estate, but don’t have the time or head space for that right now. We talk about buying an investment property when our kids are older and more independent.
Financial Independence / Retire Early (FIRE) with Kids
When did you discover the FIRE Movement, and why did it appeal to you?
Finn has been talking FIRE for years, but Fiona thought it unrealistic.
Neither of us has ever been in love with our jobs and never were particularly ambitious about climbing the corporate ladder. After Fiona experienced a rather unpleasant situation at her then-job and quit in a huff in 2021, she realized that she didn’t want to stay in the rat race forever and got on board.
Where are you currently at on your financial independence journey?
As of the lower markets of December 2022, we have 19% of our FIRE number.
Is there a target “FIRE Number” or safe withdrawal rate you are working towards?
We have a targeted number using the 4% rate. However, we don’t plan on fully retiring upon hitting FI.
After FI, we plan on working part time and withdrawing only our dividends and P2P interest, both of which are currently being reinvested. We plan on letting our investments compound for another ten years after that before we start withdrawing from our portfolio.
Are you planning to retire early? If so, what do you envision early retirement will look like?
We plan to semi-retire at age 50 when we hit our FI number and possibly fully retire at age 60. Fiona plans to get back into writing and translating, while Finn can’t wait to spend more of his time doing photography. All of these things will take place in various countries of course because we love to travel. Our kids will be teens at that point, so we’ll see how that works into our plans.
Do you plan on working after reaching financial independence? If so, will you make any changes?
See above.
Did you make any changes to how you manage your money after discovering the FIRE movement?
Our mindset changed. We went from saving 10% of our net income to saving 30% in less than a year, with only a small increase in salary. To do this, we eliminated our takeout budget almost entirely, cut down unnecessary purchases and trips to the mall, and tried our best to live on less.
We were pretty low earners when we got married. Having our first baby required us to go into super frugal mode to avoid debt. We re-adopted the tricks from that period of time that we liked and avoided the ones we didn’t. Living frugally out of choice is much different than living frugally out of necessity.
What’s the worst financial mistake you’ve made?
We regret not buying our apartment sooner or not starting our journey to FI sooner. We also froze our mortgage for three months at the start of COVID and regret that. Our mortgage payments are higher now because of it.
What additional challenges does having kids add to the pursuit of financial independence and early retirement?
Kids cost money! Obviously supporting four people costs more than two, but we’ve found plenty of ways to save.
As we stated above, we spend a lot on daycare tuition, but thankfully that will end in September when our son starts (public) nursery school.
An additional challenge is explaining it all to our children. Their friends have bigger homes than we do and most of them have cars, while we have a small apartment and take public transportation. We CAN afford all of those things. We even had a car and got rid of it since public transportation here is always improving. However, we choose to live modestly instead and invest our money.
Our six-year-old daughter is just starting to get it. She thought we were poor for the longest time. We talk a lot about being intentional with our money. She’s probably the only kid in her class who knows what compound interest is 🙂
In your opinion, are there any negatives to pursuing FIRE with kids?
No.
How do you plan to teach your kids about money?
During the first COVID lockdown in spring 2020, our daughter (then three – and an only child) started pretending to go shopping in our pantry. We went along with it and put prices of 1, 2 or 3 shekels on all of the items and gave her money to “shop” with. She’d have to figure out what she could afford with her budget and not go over.
We also have the book If You Made a Million (Affiliate link), which was actually Fiona’s when she was a kid. We currently don’t give our kids money on a regular basis.
WRAPPING UP
What advice would you give to families just starting out on their FIRE journey?
You have to be in it for the long haul. If you don’t enjoy the journey, you won’t reach your destination. The journey to FIRE is a lifestyle, but that doesn’t mean you have to give up your other interests, hobbies or needs. Figure out how to budget them into your lifestyle.
We are all about experiences and take our kids traveling and for fun days out, but we’ve become masters at not paying full price for anything and have learned to stretch our shekels to the max. Invest in yourselves and in your relationship (therapy is great), since you’ll be spending lots of time together after you hit FIRE.
The FIRE journey is a marathon, not a sprint. It’s the snail’s way to getting rich.
Where can readers learn more about you and follow your journey?
You read our blog at www.fionistdream.com. We also have a Facebook page.
Is there anything else that you’d like to share?
It is all about priorities – what kind of a lifestyle you want, if you want to completely retire early, etc.
You need to know what you want and make sure to enjoy the journey or you’ll never make it to your goal. If you are in a relationship, working to maintain your relationship and communicate a ton will help you make it to FI in one piece!
Thank you so much for featuring us. We’re honored.
Thank you again Fionists for sharing your family’s FIRE story!
Are you ready to share YOUR family’s story?
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