I frequent the /r/financialindependence subreddit pretty much every day. I love the community and sense of camaraderie that comes from other people on the same weird track as me. It’s really great to be able to commiserate about forgetting your lunch or celebrating savings milestones. But.
(there’s always a but)
I know of no real delicate way to say this, so I’ll just put it bluntly. Some people are way too crazy about cutting expenses. I’m a big fan of not spending frivolously and shopping smart. But I refuse to go to extremes. I don’t think the extra 2-3 years of extra interest is worth living in a car. That’s just me. Some people may be perfectly fine with showering at work every day and only owning a laptop, a pillow and a week’s worth of clothes.
When I moved, I decided to pay a bit extra for a 2 bedroom apartment. I did that so friends and family would have a place to sleep when they come to visit, and when they’re not here it’s my computer/craft room. Some people make look at me like I’m the crazy one for spending the extra money every month.
My path to financial independence and early retirement is not going to be marked by deprivation and self-denial. (ok maybe a little bit of both. just a bit) I’m not going to be miserable while I’m working. I’ve got a life to live. There’s new people to meet and new places to explore. If that means I need to add a weekly drink out at a bar to socialize with my new teammates, I’ll do it. Same with saving up for fun vacation trips. I’m only going to be young, single and relatively mobile once. I think the youngins out there refer to that as “YOLO”.
Who knows? Maybe one of the people I meet out and about will turn into one of my closest friends, a business opportunity, or even a partner for life. I’m not going to miss out on that just to save $20.
Instead of ruthlessly cutting back my expenses, I’m going to focus more on increasing my income. I have a feeling that will be far more useful down the road then a year of only spending $5,000. Not spending every penny you earn is vital. Saving what money you can is also important. Some time in the future though, you’re going to reach a point where the returns on the effort you put into cutting down your spending would be better put to use earning more money.
I’m not quite at the point where I want to put in the effort for a side hustle, so for now I’ll be focusing my efforts on saving what I can.
Speaking of saving, I hit an important milestone this week. My investments hit $50K!! They’ve actually gone a bit over that with my 401k and Roth IRA contributions added in from this last paycheck. I’m super excited I’m able to share this with you. I’d love to celebrate my news on Facebook, but I think most people would take it the wrong way and think I’m bragging. Or, even worse, ask me to help them out with some financial issue.
How did I manage to save so much in such a short time? Well, for one thing, I made it a priority to save. When I first started working my first full-time job 18 months ago, I started with a 6% 401k contribution even though I desperately needed basic supplies. Like a mattress and kitchen stuff. I gave myself 4 months to buy what I needed to furnish my house, and then I bumped up my contribution to what I thought was the full match. I made a mistake in my calculations, though, and included my employer match when I should’ve excluded it. This led to me missing out on about $5k which I’m kind of upset about still. From there, I caught my mistake and bumped up my % to max out my 401k. Then I looked at my budget and decided I could afford maxing out my Roth IRA as well. Now I need to watch my spending even more carefully but it’s worth it when I see my net worth graph climb higher every month.
I also managed to save so much because I have zero debt. I worked my butt off for a full-ride scholarship to college and joined the military for spending cash. These two set me on the path to success more than anything else in my life. (Aside from my parents being good examples, but don’t tell them I said that.)
My next goal is to have $100k net worth before I move on to my next job in 17 months. Baring any major catastrophes in my life, I think I should be able to hit that this time next year (mid-July 2016). I’ll let you know then if I made it or not! Life is looking pretty good for me right now!
How has your life been going? Do you have a rant or a rave to share?