 |
| Presque Isle State Park, Erie, PA |
Winston Churchill: “I have nothing to offer but blood, toil, tears and sweat.”
Since our early retirement in August 2020, my wife and I (and Toby, our Pomeranian) have kept our promise to travel more, and have seen our share of so many wonderful places, like Niagara Falls, Letchworth State Park, Ocean City, Atlantic Beach, and Presque Isle State Park.
All these travels would not have been possible today were it not for the sacrifices we’ve made throughout our journey to be financially independent and to retire early.
In this post, I’d like to share my thoughts on what it means to sacrifice to achieve financial independence.
Our journey to be financially independent started around the year 2010. Thanks to blogs like Mr. Money Moustache and Early Retirement Extreme, I finally found the answer to my question, “How do I retire early?” The simple math of saving up at least 25 times your yearly spending was a definite eureka moment.
Armed with this newly acquired knowledge, we set out on a journey of our own to become financially independent and to retire early. The changes we would make starting around 2010 would have a dramatic impact on our future.
Up until then, we were still interested in making our home look beautiful by buying stuff to fill every nook and cranny. We bought paintings from art shows, we bought kitchen stuff from Crate & Barrel, we bought Christmas decorations from Lowe’s/Walmart/Target, and we bought the rest from Amazon.
We wanted to look up-to-date, so we went clothes shopping on weekends to different malls, like King of Prussia Mall, Lehigh Valley Mall, and Exton Mall. Our ‘hobby’ during those days was going to malls, mindlessly walking around the mall looking for bargains/deals, and to eat.
A typical shopping trip with lunch would cost somewhere around $100 to $200. We would make multiple stops: a stop at a clothing store, a stop at a kitchen store, lunch, then additional stops at more stores…
While we were doing all those shopping, we didn’t think much about why we were buying up everything. We were just doing what most of our family and friends were doing on a typical weekend.
We didn’t find anything wrong with shopping because everyone else was doing it…
With our realization that we could retire early thanks to the FIRE (financial independence retire early) movement, came the realization that we should do something to make this happen.
It was around that time (2010) that we wrote down a written plan to map out how much we wanted to have before we can retire. We didn’t know exactly what our future expenses might be, but we guesstimated best we could, then went to work!
These are some of the things we sacrificed to make our dream a reality:
We admit it took a long time to truly stop buying things we didn’t need. It wasn’t until the year 2019 that we truly stopped buying things we didn’t need.
Up until then, we took baby steps. We thought twice before buying stuff, reasoning with each other why we need this thing or that thing. Just thinking through before purchasing, put a stop to most frivolous purchases.
We got progressively better at not buying things, but what triggered our deep urge to really stop buying less was the garage sale we did back around 2014. After going through the stuff we had, and getting back less than we initially thought from selling our stuff, came a stark conclusion that we should buy even less stuff from that point on.
My wife stopped buying expensive cosmetics during holidays and instead started using home made lotions, saving around $800-$1,000 per year. We stopped buying holiday decorations and other cutesy stuff around different seasons (we already had plenty of these!). We stopped buying Toby’s clothes and toys (again, he already had plenty).
I stopped going to Best Buy or Walmart to buy CD’s/DVD’s on weekends, instead opting to buy only during the Black Friday weekends.
By year 2019, with my wife’s retirement from her job of 10 years, we cut out, for the most part, buying of stuff. That year, we spent $20 on clothes and nothing else! No more books, knickknacks, art, movies, music, etc.
We rented books from the public library and borrowed music from the library.
- Didn’t take trips where we had to fly to get there
The only trip via air we took was to Las Vegas in 2017. Outside of that, all of our trips were day trips to state parks, nature areas, other cities, or overnight trips to casinos on the east coast with our parents.
We realized we couldn’t afford to take trips that cost $3,000 to $5,000 for a week long trip, which is typical for us (airfare for two $800 to $1,000, $1,000 to $1,500 for hotel for 5/6 nights, $400 to $600 for rental car, $600 to $1,000 for food). Taking day trips on weekends with Toby, required only the price of gasoline/tolls and lunch.
After awhile, we couldn’t justify spending that kind of money ($3000 - $5000) for a week long trip. We still feel this way after our retirement. We’re on a fixed income and spending that kind of money now would be detrimental to our finances!
- Cut our grocery budget from around $500 down to around $250
We stopped shopping at Wegman’s Supermarkets which is one of the most expensive supermarkets in the United States. We found cheaper alternatives like Aldi and Lidl, saving us money.
We cut out sodas/iced teas from our shopping trips, instead brewed our own tea and made iced tea from it. I also cut out sugar which saved us money on things I used to buy like ice cream, cookies, cakes, desserts, etc.
We stopped buying already made meals at Wegman’s which were getting more expensive. Typical price of these meals would be $6 per plate, going as high as $10 per plate.
- Stopped buying at big warehouse stores like BJ’s
Shopping at these huge warehouse stores would cost us $100 for 4 items! For a family of 3 (including our dog), this was a mistake. We didn’t need to buy 50 toilet papers, 30 paper towels, 25 chimichangas, and 4 huge boxes of cereal!
We would end up throwing out frozen chimichangas we couldn’t finish (we got sick of them)…
We made a decision to not renew our membership at BJ’s, and just shopped at supermarkets.
- Made our own lunches and no coffees bought from stores on workdays
In the 14 years I worked at my last job, not once did I buy lunch. Same for my wife. My wife and I made home lunches saving us hundreds of dollars per month easily.
I never bought a cup of coffee in the 14 years I worked at my last job. Our company offered free hot water initially, so I made green tea. Few years later, our company offered free coffee and tea, so I took advantage of that.
When we were younger, we used to order two entrees, two drinks, and one appetizer. We would finish all of those at the restaurant.
We stopped going to sit-down restaurants eventually, unless we took our family. We instead did takeout.
By doing takeout food, we could eat half of an entree, then eat the other half later. We ended up saving money by doing that for just about every takeout food. We also didn’t have to tip or buy drinks on takeout food, easily saving us around $15 to $20 compared to dining out.
- Ramped up our retirement savings
With all these spending under control, we upped the savings rate on my retirement account from 3% (2007) to 24% (2019). We added to my wife’s IRA account each year as well.
- Refinanced our mortgage twice
Our mortgage initially had a rate of 6.75% (2006) for 30 years. By 2009, we had refinanced to a lower rate of 5% and reduced the duration from 30 years to 20 years. We refinanced again in 2011 to a even lower rate of 3.5% and reduced the duration to 15 years from 20 years.
This ended up saving us tens of thousands of dollars in interest alone!
On top of that, we made additional payments along the way. On average, we paid around $3,000 to $5,000 extra mortgage per year.
- We returned one of the two leased vehicles coinciding with my wife’s retirement
Once my wife retired, we returned her leased car saving us about $500 per month (car payment, insurance, gasoline, registration, and maintenance).
Car is an expensive thing to have. We don’t think about things like insurance, gasoline, registration, title, maintenance (oil change, tune up), and tolls, but they’re there.
In conclusion:
The path to financial independence and retiring early is not possible without sacrifices. Without foregoing few things you like to have or deserve to have, early retirement is not possible.
Practice delayed gratification, figure out things that doesn’t cost much money to do, and make a written plan for your future.
Like anything in life, without sacrifice, nothing worthwhile is achieved. It’s through sacrifice, that we can realize our dream of being financially independent and to retire early.
We wish you the best of luck in reaching for your goal to retire early! Thank you all for reading!
Jake
Wandering Money Pig
If you missed the post ‘What’s it like to hand in your resignation...’, please click
here.
If you missed the post ‘How to retire early...’, please click
here.
If you missed the post ‘We sold our home during the pandemic...’, please click
here.
If you missed the post ‘What is the FIRE (financial independence retire early) movement...’, please click
here.
If you missed the post ‘Magic of compounding interest...’, please click
here.
If you missed the post ‘Our minimalist update…’, please click
here.
If you missed the post ‘Dangers of entitlement on your path to happiness…’, please click
here.
If you missed the post ‘Get rid of debt to reach your goal of financial independence…’, please click
here.
If you missed the post ‘Thinking of moving to Pennsylvania…’, please click
here.
If you missed the post ‘Learn to say enough to be happy on your path to financial independence and to retire early…’, please click
here.
If you missed the post ‘Why is downsizing/minimalism so difficult…’, please click
here.
If you missed the post ‘Is America still a land of opportunity…’, please click
here.
If you missed the post ‘Learn a skill that pays you well to retire early…’, please click
here.
If you missed the post ‘Invest and not save for retirement…’, please click
here.
If you missed the post ‘Learn to enjoy the moment for life and for FIRE…’, please click
here.
If you missed the post ‘The correlation between consumerism and early retirement…’, please click
here.
If you missed the post ‘Retire on $200,000 (200k)…’, please click
here.
If you missed the post ‘Adapting to change for life and for FIRE…’, please click
here.
If you missed the post ‘Thinking of moving to Hawaii…’, please click
here.
If you missed the post ‘Tough childhood leads to success in later life…’, please click
here.
If you missed the post ‘Thinking of moving to New York City…’, please click
here.
If you missed the post ‘Importance of finding purpose in early retirement…’, please click
here.
If you missed the post ‘What is the rule of 72…’, please click
here.
If you missed the post ‘Retire on $100,000 (100k)…’, please click
here.
If you missed the post ‘The importance of a significant other’s role in your path to FIRE…’, please click
here.
If you missed the post ‘Save for retirement or pay off debt…’, please click
here.
If you missed the post ‘How much do I need to retire…’, please click
here.
If you missed the post ‘Early Retirement Manifesto…’, please click
here.
If you missed the post ‘Pros and cons of early retirement…’, please click
here.
If you missed the post ‘How to save money when traveling…’, please click
here.
If you missed the post ‘What is the average 401k balance…’, please click
here.
If you missed the post ‘Doing a garage sale during the pandemic…’, please click
here.
If you missed the post ‘First few months after early retirement…’, please click
here.
If you missed the post ‘Not caring too much equals happiness…’, please click
here.
Please check out our YouTube channel ‘Wandering Money Pig’ showcasing our travels and our Pomeranian dog! https://www.youtube.com/channel/UC3kl9f4W9sfNG5h1l-x6nH
