Don’t Sweat Petty Stuff, and Don’t Pet Sweaty Stuff
In my journey to FI if I learned one thing it’s that the big stuff will kill you. This is true across many aspects of life – objects falling from the sky, bears & moose, and “if-you-can-finish-this-4lb-cheeseburger-you get-it-free” offers. When it comes to expenses, what’s the big stuff? For me, the big-stuff boiled down to how much I paid every month for a roof over my head and wheels.
I came out of college with no student loans (hoo-rah for state school!), and I have no children. Of course your results may vary.
Now before you protest I realize many folks have other “big stuff” expenses that include ongoing medical costs or caring for an ill family member. I understand that, but for the purpose of this post I’d like to discuss the two things that virtually every American ‘needs’ – the roof and the wheels (wheels being very arguable if you live in an urban area with great mass transit or can bike around, but roll with me here….)
Drink Up
Many assume a frugal lifestyle lacks joy. No morning cappuccino? No dinners out on the town? No thanks…. I’d like to offer that my path to FI had PLENTY of those things, and many more (ahem… beer… cough… bourbon). So the FI community is now asking “how did you become FI while violating those core rules?!!”… or “I knew it – trust-fund kid!!” Nope, no trust fund here. I did it by focusing in the roof and the wheels.
I saw in my early 20’s, through a quick evaluation of simple maths, that the roof and the wheels were taking up most of my budget. My underdeveloped brain told me that if I could save the maximum amount on those two things, I’d be in the winning column.
It’s that simple.
Sure, saving $60 a month by quitting the cappuccino habit is great – that’s $720 a year. But, not having a $450 car payment every month in perpetuity saves $5400 per year.
Edumacation taught me that $5400 is greater than $720, by a lot. That made my cappuccino’s taste even better!
And as time went on the BMW’s and Audi’s of the world kept looking uglier and uglier to me. Why? Because they took the virtual joy of the cappuccino’s out of my brain, and for that I would not stand.
as content.
A Place To Live Is Personal
If you’d like to get into the own vs. rent debate, I won’t take you up on that. Much has been written about that, I recommend this post, but the bottom line is that some things can’t be measured quantitatively, like a sense of home or community.
As for cars, don’t get me started. That’s the next post…
Just found your website. I am just about to turn 31 and hope to be retired in my early 40s. I am brand new to FI, so it is great to see others who have achieved it!
So glad you stopped by, I hope you enjoy my posts. You’re soooo young, just keep at it man. Live smartly but most importantly enjoy life and have fun – both are possible!
It is certainly easy to say making coffee at home vs star bucks helps get you to FI, but you are absolutely right… it is all about the big stuff. If you have six figures of student debt, no amount of life hacks will make it disappear overnight.
Yep, the three biggest expenses for most families are the house (rent or buy), the cars(s), and food. I focused here on the first two since I think it’s more common for Americans to waste money on those. But if you concentrate on all three you’ll win, plain and simple.
Thanks for the comment!
We have 2 kids..working on a third..at one time we were spending over $1200 a month. Now, that my wife has manipulated her schedule for the better she’s able to watch the kids more frequently as opposed to the daycares who charge sinful amounts. Reduced our food budget considerably- hundreds a month. Not sure if we should pay the mortgage off or just buy rental houses for cash-flow..
Awesome Brett. If your mortgage interest rate is low (below 3.75% or so) I’d say your money is better invested. This argument often starts holy wars so do your research, but I keep my mortgage and it’s done well for me, mathematically. I have a 3.33% interest rate.