I realized something important after writing about the best reason to retire early. Money doesn't buy everlasting happiness. However, having more money can reduce stress and anxiety.
The goal of achieving perpetual happiness is not realistic. Happiness ebbs and flows. It's more exciting to be an 8 out of 10 on the happiness scale because there's still upside. You're already happy enough. But the thought of experiencing even greater happiness gives you more reason for being.
Life gets complicated as we get older. The responsibility of taking care of a family, experiencing declining health, and worrying about the future can suppress the mood of even the happiest person.
Therefore, I thought it wise to highlight the top financial moves you can make to reduce stress and anxiety. With less stress and anxiety, not only will you feel happier, but you'll also be less envious, less angry, more patient, and more empathetic.
Top 10 Financial Moves To Reduce Stress And Anxiety
Here are the top 10 financial moves I've made that have brought me the greatest stress relief. I've ranked the financial moves in order of least to most impactful. I use just two variables to determine the order of the rankings:
- How easy the financial move is to do
- How much stress and anxiety relief each financial move provides
10) Saving up at least six months of living expenses
At the minimum, every household should have at least six months of living expenses in cash or risk-free investments like Treasury bonds. With interest rates so high, investing in 3-month-to-1-year Treasury bills makes a lot of sense today.
After you have about six months of living expenses saved up, the stress relief you feel may start to wane. Depending on economic conditions, investing FOMO might take over as you feel your cash could be making a greater return.
Once you've got a 6-month financial defensive shield up, you will feel more confident to tackle the world. A perpetual cash buffer should quickly be automatic.
9) Tracking your net worth in one place
Tracking your net worth in one place is like jotting down your to-do list or writing a grocery list before going shopping. Once it's written down, you feel less stress and anxiety about forgetting to do something.
I've been tracking my net worth with Personal Capital, now called Empower, since 2012. It feels great to link up and manually input all my accounts so that they are never lost. I have actually forgotten about financial accounts before.
Due to investing in multiple private funds, it's also hard to keep track of all the various contributions. It also feels good to delete financial accounts that are no longer applicable. For example, every time I pay off a mortgage, it feels wonderful to remove the debt account from my net worth.
8) Putting together a death file
As our lives get more complicated digitally, it's easy to lose access to online accounts. If we don't have an organized way to keep all our accounts, usernames, and passwords in one place, our loved ones will spend an unnecessary amount of time and stress trying to figure them out.
Once my wife and I created our digital death files, we felt a lot of relief. Ideally, you only store your death file on a USB drive that can be found. But you can also store one on your computer or in the cloud and accept that either could be hacked.
7) Creating a revocable living trust
After our son was born in 2017, we decided to create revocable living trusts for both my wife and me. This way, there are clear instructions and processes in place in case either or both of us pass prematurely.
The importance of living goes way up once you have children. At the very least, every parent wants to live long enough until their children are adults. The more complicated your net worth, the more important it is to create a trust.
Going through probate court because your family doesn't have a trust is both time-consuming and more expensive. Trusts are for all families who care about having an orderly passing of financial accounts.
It can take months to put together a revocable living trust because you need to get all our files in order. Then you need to visit an estate planning attorney to finalize the trust. But once you get everything done, you will feel tremendous relief.
6) Buying an affordable home.
Once you own an affordable home, life gets easier. No longer will you worry about a rent hike or be asked to move because the landlord wants to sell. If another pandemic ever comes, the value of your home will go way up because you'll spend even more time at home.
If you plan to start a family, consider buying a home before getting pregnant. Once you get pregnant, the nesting instinct goes into overdrive. As a result, you may end up spending more money on a home than you really should.
“Affordable” Is The Key Word
The beauty of following my 30/30/3 home buying rule is that you won't feel constantly stressed after purchase. Instead, you'll feel a good balance of leveraging your capital enough to live a better life while not risking financial ruin.
Home maintenance problems come up all the time. You will eventually have to change the water heater ($3,000), the roof ($10,000 – $50,000), the furnace ($1,500 – $5,000), and many more items. By being able to fix these problems without stressing the bank account, you will feel more at ease. Large expensive houses usually come with large expensive problems!
As your net worth grows, you may follow my net worth home buying guide to buy a home. Try to get your primary residence's value down to 30% of your net worth or less if you want to take take things easier.
Next Comes The Forever Home
The second level of anxiety and stress relief from shelter comes from buying a forever home. It is rare the first home you buy will be the one you end up living in forever. Hence, once you find that forever home, you will feel even more settled.
To never have to move again provides a tremendous amount of comfort. Not only can you more easily plan your life, but you will also likely benefit financially the longer you own the home. In ten years, owning your home will feel cheaper. At the same time, your home will have likely appreciated in value.
Finally Comes The Paid Off Forever Home
Even better than having a forever home is a paid off forever home. With no more mortgage payments, you no longer have to grind as hard to pay for life.
With shelter out of the way, we can focus on everything else that matters. The only problem is that it can easily take more than a decade to pay off your forever home.
Also be careful. If your life gets too easy, you might end up slacking off and doing nothing productive. Losing motivation was the biggest downside to paying off a rental property early.
5) Creating and sustaining a family business
Once you become a parent, you no longer think as much about yourself. Instead, the majority of your focus will be on your children's well-being. Without generational wealth, creating a sustainable family business may be the next best thing.
The harder your upbringing, the more you may worry your children might go through the same difficulties. When I was growing up I got into some fights. As a result, I was suspended a couple of times and almost got expelled. Then I experienced run-ins with the law while in high school. Due to my defiant nature, I could have easily ruined my life.
Given a mango never falls far from its tree, I suspect my kids may have similar defiant and rebellious attitudes that will get them in trouble as well. If my wife and I are not able to properly guide them, they might end up unemployed or underemployed.
In addition, hard work might no longer be good enough to get ahead anymore. As a result, your kids might be shut out from many opportunities despite being qualified.
Having career insurance by owning a family business provides stress relief. However, running a business takes hard work. And most businesses die or get sold within ten years.
4) Superfunding your children's 529 plans
Many people dread paying for college in the future. I'm even considering going back to work to help pay for a potential $750,000 all-in college tuition bill for one child in 15 years. I'm not bold enough to think my kids will be smart enough to get scholarships due to strong academic performance.
Despite the ability to learn everything for free online or through affordable books, college tuition keeps going up faster than the rate of inflation. Therefore, once you superfund each child's 529 plan, you will feel great knowing you've done the most you can do in a tax-efficient manner to pay for their college.
Even if you don't contribute another $1 to a college savings plan, a superfunded 529 plan with 10+ years of compounding should be able to pay for four years of public school tuition. If you want to have enough money to cover the cost of a private university, then you will likely have to contribute more.
Unfortunately, superfunding $80,000 is not easy for most families to do. But that's OK if you can't. You can always contribute annually to a 529 plan instead.
Another way to reduce the stress of saving for college is realizing you can always pay for college through your wages while your kids are in school. I didn't think about this method of paying for college because I don't plan on working 12-15 years from now. But once I did, I felt better because due to having another option.
3) Buying a safe car
I never thought much about car safety before we had children. If I did, I wouldn't have driven a Honda Civic, BMW M3, or a Honda Fit. But about halfway through my wife's pregnancy, I began noticing more car accidents and experiencing more close calls.
The stress of driving increased the closer my wife got to her due date. Therefore, I decided to buy a Range Rover Sport and return my Honda Fit once the three-year lease was over.
If I could have bought a tank, I would have. Alas, a large vehicle with thick doors and large crumple zones would have to do. Unfortunately, new luxury cars are outrageously expensive nowadays. As a result, I plan to drive our 2015 Range Rover until 2030, five years longer than expected.
Driving in a big city is chaotic and full of mishaps. You can be the safest driver on the road and still get into an accident due to someone else's reckless driving. Constantly feeling like you and your passengers could get injured or die in a car accident is stressful!
The best time to own the nicest car you can afford is when you have children. After your children are gone, you can buy whatever you please.
A cheaper automotive financial move you can make to reduce stress is buying new tires and brakes. Don't ride your tires until they are bald. And don't wait until your brakes are squeaking either. Get your maintenance done on time.
2) Generate enough passive income to cover your basic living expenses
Once you have enough passive income to cover your food, clothing, and shelter expenses, you're able to fully emerge from your shell. No longer do you have to pretend to be somebody you're not. You don't have to put up with things you don't like either.
As your portfolio's passive income grows, your courage to be yourself increases. The more you can be yourself, the more you will feel alive. You'll more easily be able to find your ikigai, which gives you the reason for being.
The only issue with having enough passive income to cover your basic living expenses is that it takes a long time. It took me 13 years of aggressive saving and investing to generate enough passive income to take care of myself. Then it took another seven years to accumulate enough to take care of a family of four. 20 years is a long time!
Further, your basic living expenses are likely a moving target. My basic living expenses have only grown due to the birth of two children, healthcare costs, and education costs.
I've relied heavily on investing in real estate and stocks to try and outperform overall inflation. Most years have worked. Some years, like in 2022, have not. Therefore, a diversified passive income portfolio is also a must.
1) Getting life insurance policies.
Finally, the number one financial move that reduces stress and anxiety is getting affordable life insurance. The more you think about your children, the greater the impact of getting life insurance.
Even if you are single and don't have children yet, I would strongly consider getting a 30-year term policy if you're around age 30. Life can get much more complicated in a hurry.
My wife and I recently got two, 20-year term life insurance policies during the pandemic. My 10-year term policy was coming due in January 2023 and my wife also had half the amount of coverage I had, which made no sense since we are equal caretakers.
As soon as I got my new policy, a significant amount of stress and anxiety melted away. I had been searching on and off for a new affordable life insurance policy since 2017 when our son was born. But I couldn't find anything affordable since I went to an overzealous sleep doctor who said I had severe sleep apnea, which I didn't.
I kept putting off my search until a year before my 10-year term was about to expire by getting multiple quotes online with Policygenius. I finally was able to get a $750,000 20-year term policy with no medical checkup for a reasonable $140/month. In comparison, my old carrier, USAA, quoted me at $840/month!
I made a strategic error when I was 35 years old by only getting a 10-year term policy. I felt dumb for improperly forecasting my future at the time. As a result, I felt like getting an affordable new policy was like getting a second chance.
I would gladly pay $500/month to feel the amount of relief I started feeling once my wife and I got new policies. Thankfully, getting affordable life insurance is easy to do.
Make The Financial Moves Now To Reduce Stress Later
Life is stressful. The more money you have, the more you can use it to reduce your stress and anxiety.
Looking at my top financial moves list, I realize that many of them are due to having children. Therefore, if you want less stress and anxiety, don't have children. Children are a tremendous joy, but also a tremendous amount of responsibility.
Without children, you don't have to buy a larger house, superfund a 529 plan, buy a safer car, create a revocable living trust, or get life insurance if you have no debt.
If you already have children, then another strategy to reduce stress and anxiety is to lower your expectations of them! If you keep expecting them to get into a top university and become the next CEO, then everyone will feel constant pressure.
For those who want to reduce stress and anxiety quickly, tackle the easiest financial moves first. They are saving at least six months of living expenses, tracking your net worth in one place, putting together a death file, and getting life insurance if you have debt.
Once you get the easy moves out of the way, start tackling the harder ones.
Money Should Help Make Life Easier As You Age
Circa 2015, one incident in particular awakened my appreciation for having money. I had gotten a $90 parking ticket because I didn't notice it was street cleaning on that side of the road. I just thought I was lucky to have found a parking spot so easily!
Although I was annoyed when I got the ticket, I didn't care as much like I did in college. Given I cared less about the $90 ticket, I felt less stressed and happier as a result. I just chalked up the $90 to having a good time playing softball with my buddies.
We can use money to hire housekeepers, cooks, coaches, au pairs, tutors, night doulas, and therapists to help reduce stress. The more strain we are under, the more we should use money to help lighten the load. Just be careful spending too much money.
More Knowledge Should Also Help Alleviate Stress
There is one last financial move worth mentioning that helps alleviate stress. Spending money to obtain financial knowledge or any practical knowledge. For example, you can buy my Wall Street Journal bestseller, Buy This Not That, to help improve your life and make better optimal decisions.
In many cases, you can learn inexpensively or for free online. The more knowledge you obtain, the better you may be able to deal with suboptimal situations.
Let's say you're losing money in a bear market. If you know the historical average duration of a bear market and the historical long-term return of the S&P 500, you may be less inclined to panic sell because you're not as stressed. You've set up your net worth asset allocation to match your risk tolerance.
Learn How To Do Things Yourself
Now let's say you're a super-handy person. Random plumbing and electrical problems don't bother you as much because you know how to fix them all. Getting a flat tire is also no big deal because you know how to operate a jack and change a tire. MacGyver doesn't get stressed out. Instead, he finds solutions.
Now let's say you are an expert in hand-to-hand combat. As a result, you're less afraid to walk around the city in the middle of the night. You've experienced combat many times before and know what to do.
Finally, let's say you obtained tremendous practical employment knowledge after reading How To Engineer Your Layoff. As a result, you may not feel as stressed during a rocky economy because you know all the severance negotiation strategies to maximize your exit.
Knowledge is power. Don't let a lack of knowledge limit your creativity in finding optimal solutions. The more you learn the greater the command you will have over your life!
Reader Questions About Top Financial Moves
What other financial moves relieve stress and anxiety for you? Was there a point in your life where you no longer felt as stressed about money and the future? How would you rank my top financial moves from 1 to 10?
Invest In Real Estate To Build More Wealth
Real estate is my favorite asset class to build wealth. It generates income, provides shelter, is tangible, and is less volatile. In my opinion, real estate is much more desirable than stocks. In fact, investing in real estate since 2003 was my top financial move.
To invest in private real estate, take a look at Fundrise, my favorite private real estate investing platform. Fundrise was founded in 2012 and manages over $3.3 billion with over 400,000 investors. The firm focuses on residential properties in the Sunbelt, where valuations are lower and cap rates are higher. For most investors, investing in a diversified private real estate fund makes the most sense.
Another great private real estate investing platform is Crowdstreet. Crowdstreet offers accredited investors individual deals run by sponsors that have been pre-vetted for strong track records. Many of their deals are in 18-hour cities where there is potentially greater upside. Crowdstreet is a solution where you can build your own select real estate portfolio.
Personally, I've invested $954,000 in private real estate since 2016 to diversify my exposure and earn more passive income. Both Fundrise and CrowdStreet are affiliate partners of Financial Samurai, and Financial Samurai is currently invested in Fundrise.Â
For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009.Â
Really enjoyed this article. I retired 10 years ago + dedicated 3 years to getting fit. I was able to lose 30 lbs, fix my blood pressure, reverse my pre-diabetes and get all my blood lipids in the normal range. Great for reducing stress!
Excellent job getting for after retirement Greg! You’ll probably live longer as well.
I could lose 10 pounds myself :)
Great list. Your input about real estate really sunk in a few years ago and we ended up buying rentals and became financially independent at 40. To do this, we found ways to increase our income, but I come from a profession with the mindset public servants are not money makers. I always believed there was a way to do both.
i’m still in my early 40’s, and get to decide what I want to do and how much time to invest in it. I just expanded into a life coaching business, where I get to bring the mental health and finance background together, (you may have nudged me in the business direction too) and there is zero pressure of how much to charge clients b/c fulfillment is the main focus. I seriously feel like a million bucks after meeting with the people I work with. The flexibility allows one to live follow their purpose simply because they want to, not because they have to.
Being 65, I have most of these covered as I have had time to work up to them. We will pay off our forever home mortgage next year, which will satisfy the last one still hanging out there.
I do not have a sustainable business in place. I do have a consulting/advisory LLC and I am considering a long-term engagement that could provide another steady income stream for a period of time, but you might consider this more of a side hustle than anything else.
We have a considerable amount of equity locked up in our home so one thing I might recommend to the list is to establish a HELOC as another safety net for cash access if needed. The one mistake I made that I wish I could change would have been to lock in a fixed rate rather than a variable rate. I could have had a rate locked at 3.5% for 10 years rather than a rate based on the floating prime rate. Had I done that, I would have had a lot more flexibility and use with those funds.
My husband and I are in our mid 30s with two young kids living in DC. Both of us are on employer sponsored life insurance plans and am curious to hear perspectives from Sam and other readers on staying the course with employer sponsored plans vs. getting your own 30 year term life insurance. Thoughts?
The employer sponsored life insurance plan is great. But I’ve founded it’s capped at usually 3-5X salary. Given the gap, I’ve never found it to be enough. What is your cap?
Little late on this, but get a standalone policy along with maxing out your employer life policy. The standalone policy is freedom since it will follow you through career changes and layoffs. The GTL policies are so cheap that you might as well pay the supplemental. The cost per coverage is favorable.
I agree. Get a life insurance policy that goes with you, wherever you go, even in early retirement.
Thanks, Sam. It reduces stress knowing that I’ve managed 9 out of ten.
I dropped the life insurance when the youngest of our four kids turned 30. Frankly, what seemed like an enormous amount when my first was born (back when I was in my 20s) is now something my potential widow could just write a check for (and never really miss).
I had term insurance so the rates were going up and only going higher and it no longer served any purpose.
Why term? When I was about 21, I asked my insurance professor, after class, as to which was better, term or whole-life. He told me (in a heavy German accent) that if I wanted to invest money, I should invest money. If I wanted to buy insurance, I should buy insurance. Then he told me: “Don’t mix the two!” I still see no reason to question that.
I’m surprised your term life insurance monthly premiums went up. By how much and is it called another name?
The beauty of locking in a 30-year term at around age 30 is that you pay the lowest premium at the oldest age, then you lock in that premium for the next 30 years (monthly premium doesn’t change).
Neither does the premium for the two 20-year term policies my wife and I got.
Maybe it was called renewable term? I had it through USAA. The premiums, paid quarterly, were never bad and went up on what I think was an annual basis. It started low and never increased as quickly as my career income.
Even so, I’d always planned to dispense with it at some point, and that time had come, and then some.
I just opened an Apple Savings account. It took seconds and a few clicks on my IPHONE. FAR FAR easier than opening up an account at any other bank. I also can withdraw all my money within 5 business days with not worries of having to keep a minimum balance.
I think Apple already got $1 billion deposits in a month. It’s a very smart move on their part. I had $50K parked in a Bank of America savings account earning .01% for years. Now I’m getting 4.15% with a few clicks on my phone.
I’m curious if big banks like BofA and Chase will start giving a better savings rate. They just lost $50K of my money really quickly.
Just curious – do you need to be an iPhone user to create an Apple Savings account?
Unfortunately yes. You need an iPhone / Apple Pay and an Apple Card.
I think paying off the primary residence mortgage would easily be my #1. If the mortgage is paid off and you die prematurely, the spouse and children won’t ever be forced to downsize to afford shelter and the emotional trauma from your death won’t be compounded by having to move to a lesser home/neighborhood as well. In this situation, the kids are likely getting uprooted to a new school system and then lose contact with all their friends as well…way too much trauma. It can be avoided if there is no mortgage payment.
My #2 would be paying off the mortgages on my rental properties. Although I make enough passive income from my three rental properties to cover living expenses, it’s not enough to cover all the extracurricular expenses, such as multiple yearly family vacations Once those mortgages are paid off, who needs a job?!
Refinancing during the pandemic was a blessing and a curse. With a rate of 2.75% on my primary and 2.9% on all my investment properties, it doesn’t make financial sense to pay off those mortgages, you can just invest in T-Bills or money market with a (relative) risk free rate of return at approximately 5%. However, the result is I am no longer motivated to pay off the mortgages, even though I secretly want to and then retire once and for all. By years end, I will have saved enough cash to pay off the remaining balance on the primary mortgage or the most expensive of my rental mortgages (both sitting around $475K). I find myself being tempted by the thought of paying off those mortgages on a weekly basis. Any counseling by the FS community would be appreciated.
I think the low mortgage rate is the main reason why I didn’t emphasize paying off the mortgage earlier in this article. I mention it, but it’s not a main point.
It always feels good to pay down debt. But when real mortgage rates are so negative, it just doesn’t make sense to pay down a mortgage.
It feels better to invest in risk-free assets that pay double the mortgage rate, eg 2.125% mortgage, 5% Treasury bond.
Sign of the times!
Paying off my rental properties felt good. But the good feelings didn’t last for long (1-3 months). Locking in 20 years of affordable life insurance, in the other hand, will probably feel good for 20 years. Strange but true!
Are you locking in short-term T-bills (e.g. 3 month and just recycling into the same when they mature) for flexibility or have you locked in more long term T-bills?
I might need to look into life insurance. But the thought of having another monthly bill sounds irritating.
Number 1 for me was paying off my house. Nothing financially has relieved more stress and provided more happiness.
Number 2 paying off my business credit line.
Number 3 paying off my business.
Number 4 doing a will and trust
Number 5 paying cash for my daughter’s college
Oh man, thanks for jogging my memory! I forgot my wife and I paid off our vacation property rental at the beginning of 2022. But I guess because the rental income has been booming again due to a strong winter and post-pandemic travel, and my wife has been handling the mortgage, paying the mortgage off didn’t really register.
That’s great paying off your house has brought you so much relief and joy. I must believe most would feel the same. Hmmm… now I have to figure out why living in a paid off home in 2019 didn’t bring me much relief. I paid cash for the house, but I also had to deal with remodeling it b/c it was a fixer. Hmmm. Good things to think about.
Maybe another reason is b/c debt in the 2.XX% range is just too attractive not to take advantage of.
Related post: The Triple Benefit Of Paying Off Your Mortgage Early
Sam, I understand why life insurance would be good for indebted couples without kids. But what about single folks without debt? Wouldn’t life insurance be overkill?
No, because I was single and childless when I got life insurance and then things changed years later. I regret only getting a 10-year term in my thirties.
The best time to get life insurance is at around age 30. And the best type of life insurance to get is a 30 year term then. Life tends get much more complicated after age 30.
The thing I failed to fully comprehend in my 30s is that I can always cancel the policy if I want. But I didn’t really think about that, which is why I only got a 10-year term.
Leif tends to surprises, even with the best laid plans.
Thanks for the post Sam. Will you please offer me your opinion? I’m starting to move in the direction of intentionally becoming a permanent renter while also owning a rental property with two units. I own a duplex in SF and rent in Portland Oregon. So, I can raise rents on two units to offset my less expensive rent in Portland. I know this was a suggestion put forward in your book. The question is, I have the means to purchase my own SFR as well, instead of being a renter. What would you do if you were in my shoes? For further context, I’m single with no children
I had a lot of financial anxiety in my 20s, but fortunately it made me super motivated to work hard while I had the most energy. My endurance has faded with age. I often find myself nodding off to sleep while trying to get one last thing done at the end of the day now that I’m in my 40s. But I still love the satisfaction of hard work. Very helpful list of financial moves. Having a clear plan and getting things in place financially really helps reduce stress so much.
Sam – always appreciate your insights. Wanted to test you on #10. I think a better metric is to take your age, multiply it by 15%, and that’s how many months of living expenses in cash or risk-free investments one should have (not simply 6 months). So a 25 year-old would have 3.75 months (25 * 15%), a 50 year old would have 7.5 months, and so on. I think it’s an easier metric to use than a blanket “3 to 6 months” since it considers the reality that younger people won’t have the ability to easily get to 6 months given starting salaries, student loans, etc. And the older you get, the more you should be allocated to risk-free investments. What say you?
Sounds good to me! A dynamic formula is often helpful. Thanks for suggesting. Feel free to elaborate why you use your percentage and why the need for more cash as you age.
I feel I will need a lower amount of cash as I age bc my passive income and living expenses spread will grow even greater once my kids finish college.
Thx
I used 15% because at 22 years old (typical graduation age), the result is 3.3 months (which is eerily familiar to the low end of ‘3 to 6 months’ of expenses). To your question on the need for more cash as you age, I actually mean it as permission to invest in riskier assets like stocks once you achieve that amount. If you’re 80 years old, you would just need 12 months of expenses in cash/risk-free. The rest could be invested outside of cash or other risk-free assets. Hopefully that explains my position better.
When I was working I had a fairly stable income so I didn’t always maintain a strict 3-6 month cash Buffer, because I had shit loads invested that I could quickly draw on, however, looking back, it was silly and I should have just bit the bullet and kept a good chunk. Now I’m (semi) retired I keep way more cash – currently 2 years worth of living expenses, as my risk tolerance is less and I don’t have that stable reliable income
Maybe it bumps to 20% if you have dependent children? While you and your spouse can cut costs and sacrifice if times get tough and you burn through your safety fund, it’s a totally different level of responsibility with children.
You could absolutely bump to 20% to be more conservative, but wouldn’t the monthly living expense amount organically grow as you have children? So if you had your first kid at 30, you would have had 4.5 months of living expenses at $8,000 per month prior to kid (EF of $36,000), but now w/ kids it’s $10,000 per month (so EF needs to be bumped up to $45,000).
I was less focused on the added costs from kids, and more on increasing the certainty that you would never run out of reserves.
But yes agree that no matter what percentages you choose, the resulting dollar amount will go up if you have kids which adds to your monthly expenses.