If you are planing on retiring early, please completely ignore me. I obviously have no idea what I am talking about. I have not done studies or taken classes in finance. The advice I offer goes completely against all conventional wisdom, and I am clearly out of my mind (as is evidenced by the fact that I walk everywhere). All I offer is my own story and what is working for me and my family.
My husband and I love spreadsheets. It is ridiculously geeky, and I don’t care. I can stare at pages of numbers for hours content that we are moving towards our goals. So, it would make sense that we would love to budget, right? Wrong.
Budgeting is miserable. Buying a latte and then opening up an app to record that purchase takes a little bit of fun out of the whole experience. Plus, I have found that if I give myself a set amount of money to spend on something (say, coffee), I will not only spend that money (on coffee) but always a little more as well.
Budgeting puts me in a state of deprivation, and as I mentioned earlier, I have no desire to live that way. Instead of thinking about all the amazing things that I DO have in my life, I tend to focus on what I am not allowed to have because of my budget. Stupid budgets.
So, rather than budget, I spend my time thinking about all the joys that I have in my life. If I want to buy, say, a new camera (yes, I spend WAY too much money on those), I stop. I contemplate if I really NEED this new camera (or will one of my other two cameras work just fine). This is a crucial step. Given time, I find that I don’t actually need or even care about the coveted item any longer. If I decide after several weeks that, yes, I do in fact NEED this new camera, I will search and search until I can find it at a significant discount and buy it. Craigslist is my friend as is Goodwill (but not this month since I am committed to not spending any money this month at all).
It helps me to think about money as something that I want/need just as much if not more than my desired item. Money is freedom. Money gives me time to spend with my family. For every $25 that I put in investments, I get $1 a year for the rest of my life. That is huge! Passive income gets me the thing I want more than anything else - early retirement! Suddenly, that new camera isn’t so important.
WHY do I want to retire early? To spend time with my family, of course. That time is more valuable to than buying a flavored latte at Starbucks every morning. It doesn’t seam like purchasing a coffee every morning can really matter one way or another in the big scheme of things, but all those little purchases really add up. What they add up to is time. Time that you have to spend working to pay for that indulgence of a morning latte, and I have plans for that time. Big plans.
