I did this, now I'm going to retire early
Part two of the three key steps that are helping me retire in my 40s without a six-figure salary.
In 2020, I thought I was good with money, I was investing 15% of my income, driving a paid off car, but there was one small key thing I was missing.
I was missing this skill of being a mindful spender.
In part one of these series, I shared the moment when I realized that I could retire early if I invested more of my income.
After that moment, I thought I was the first millennial to discover early retirement, hence why I created the pseudonym “The Retired Millennial.”
When I thought of the name, I googled to see if anyone else was using the name, and that search led me to the FIRE (Financial Independence Retire Early) movement.
If you’re in the FIRE part of the internet for more than ten minutes, you’ll quickly learn the importance of a save rate (the amount of your money that you invest divided by your take home income).
When I became hyper fixated on increasing my save rate, I knew I wanted to do this without living a miserable life.
I still liked and still like nice things.
Thankfully, I didn’t have to.
I still get monthly massages, get semi-annual Omakase, have two dogs, and enjoy a delicious cup of coffee at home every day.
The Traditional Approach Eliminates Wants First — I Didn’t.
While the personal finance course I was taking led me through a needs/wants budgeting exercise, and insinuated that needs were superior than wants, and that wants should be the first to put on the chopping block at the expense of needs.
And while a part of me understood the rationale from a Maslow’s Hierarchy of Needs perspective. Doing that would not bring me closer to my goal, which was to increase the gap between my income and my expenses.
I needed to start with my biggest expenses, which were all needs: housing, transportation, food, and taxes.
Increasing my save rate was half of the equation that I didn’t have even though I thought I was good with my money.
The Missing Piece That Improved My Happiness
The other half of the equation was controlling the quality of my life.
While I could simply increase my save rate significantly by starting with my top 3-4 expenses, there was still room to eliminate or bring down other expenses that were not serving me.
But what I didn’t want to do was eliminate something just because it was a want — I knew that wasn’t going to work, and I didn’t want to set myself up for budgeting failure (or an unhappy life).
My first action instead was to eliminate any want that had no value or satisfaction to me (in other words, had a low happy score).
My second action was to cut back on other needs that I hadn’t thought about it a while by shopping around for better rates, etc.
Doing this would bring my overall purchase value and satisfaction up.
In this week’s video, I’ll be covering:
How much money I spend a year.
The principle behind why spending mindfully improves your quality of life.
Why saving more is mathematically better than earning more (if you want to reach FI earlier)
My three-step Happiness Audit system
A question that now leads my spending plan is this: How could I keep (or improve) my standard of living while increasing my save rate?
I’m curious, how much money are you spending on things that are bringing you no joy or satisfaction? Let me know in the YouTube comments, I’d love to get to know you and possibly offer some ways to optimize.
Resource Corner
What if you could buy your freedom with your current paychecks? Use this proven 3-step workbook (downloaded by hundreds of women) to design your spending around your dreams—because freedom shouldn't come at the expense of an enjoyable life today.
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Talk soon,
P.S.
Your dreams are on the other side of passive consumption. Your dream becomes real not when you learn everything, it becomes real when you take one small action at a time in the right direction.
This week's challenge helps you apply the mindful spending approach that improved both my savings rate and quality of life.
These transformative weekly challenges are available exclusively for paid subscribers. If you're ready to move from consuming content to taking action, you can join the tribe when you're ready.
Weekly Challenge
The skill of mindful spending starts with one key question: "How can I keep or improve my standard of living while increasing my savings rate?"
Use this step-by-step guide to implement the happiness audit framework:
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