As part of planning my kids’ financial education, I’ve been asking myself a series of questions. 

A paradox about family finances is the most financially qualified family members often need the least help. I can take pride in not asking others for help so I fool myself when looking backwards. I have had to think very carefully about the nature of financial support in my life.

At 44, I ask myself, “What level of financial support made a difference at various stages of my life?”

17-20 years old (late 80s) – I had an academic scholarship and worked as a teaching assistant so my core university expenses were covered. Over and above that, $12,500 per annum made a big difference to cover living expenses. That’s about $25,000 in today’s dollars.

21-28 years old – (90s) – I learned how to “live cheap” in university and could survive, quite comfortably, in my early career on $25,000 per annum (2012 equivalent). It was easy for me to hit this minimum once I found a job. So the main support that helped was introductions, rather than financial.

Thinking about my early career, any level of day-to-day financial support would have held me back as there were a number of times that I considered leaving my job. 

By 28 years old, I saved five years worth of core living expenses and considered leaving my first career. Learning to save was a habit from early childhood and reinforced by being standalone in my finances. A key calculation, for me, was knowing that I could live very cheaply and follow my passion for triathlon training.

32-40 years old – this covered my career as an elite athlete and I was able to live comfortably on $50,000 per annum. When I spent more, it was driven by either non-essential (luxury) expenditure or travel related to my work in financial consulting.

Several things that I failed to anticipate in my 20s, and 30s:

• I wasn’t going to work in a high-paying field forever
• I was likely to take on dependents in my 40s
• I would value time with my family
• End of life care

With three young kids in the house, the ability to work part-time and invest in them is precious. Equally valuable, is the ability to fund preschool and childcare so that I can have time away from the kids. I value these two points at $25,000 per kid. I have friends that are double that number as well as less than half that number. My point, there will be some number that’s appropriate for your family. Working less and childcare are the big numbers with regard to young kids and I never considered them in my pre-fatherhood budgets.