Did you know there are people who have retired in their 30s? Retired as in they no longer have to work to sustain their lifestyles. They are free to travel, sleep all day, and pursue their passions. I’ve been working since I was 15 and am nowhere near retirement at age 31. The average American retires at age 63 according to the U.S. Census Bureau. So what the hell did those special FIREs (financially independent retired early) people do that we haven’t caught onto?
They spend less than they earn! They live way below their means and make sacrifices for their future selves, investing a large percentage of their incomes, and minding their spending.
Some common trends of the FIREs:
- They made debt elimination a priority
- Lowered their cost of living
- Pay for items using cash or use credit responsibly
- Educated themselves on the market and retirement plans
- Invested heavily in their future selves by maxing out contributions
So why the hell should I work until I’m 63? I want what they’ve got.
I want the freedom to choose the work I do because I don’t need the money. I want to be able to take care of myself and be a stay at home mom without worrying about finances. I want my time and my freedom well before I’m 63.
So I’ve decided to take small steps each day to move towards becoming a FIRE. While at age 31, I’m starting later than ideal, I do plan to reach financial independence at 45.
Here are steps I’ve taken to tackle my finances and eventually become financially independent.
25 Small Steps:
- Took inventory of my debts: student loans, credit cards, car loan, mortgage etc.
- Tracked my spending using Mint for over a year
- Created a monthly budget and tracked it on paper
- Tried to use the cash envelope system (it didn’t work for me)
- Lowered my cell phone bill
- Put my house on the market
- I got a roommate (after 30 days and only receiving one offer on the home)
- Sold items on Offer Up (furniture, purses, and clothes)
- Tried selling my clothing to Plato’s Closet…they didn’t want it
- Paid off my Lumber Lliquidators credit card well before the interest-free period expired
- Paid off my Wells Fargo credit card
- Committed to not buying clothing for a year…I messed up and bought shiny shoes
- Met with my financial advisor regarding my 403b and other investment options
- Signed up for Personal Capital to track my investments as well as my spending
- Took on a part-time job to increase income
- Applied for the teacher loan forgiveness program to have part of my debt forgiven
- Cut out unnecessary spending from my budget (gym, dating sites, shopping, pampering)
- Committed to a no spend month at least twice a year (My first one was in February and second will be in September)
- Committed to not shopping for home decor/furnishings
- Gave up my DIY hobby which was costing me money
- Removed the Amazon app from my phone
- Read Rich Dad Poor Dad
- Purchased Tony Robin’s book Money Master the Game…now if I can just read it. That thing is THICK.
- Canceled my life insurance policy (Thank God I only had it for three months because that was a waste)
- Educated myself on investments by listening to the Optimum Finance podcast