Sunday, December 27, 2015
New Goals and a New Direction
I started this blog as a personal journey to document my life and, continuing in that vein, I'm excited about the direction my life is headed.
First a little back story: Over the past several years, my family did what most families do when they get to a place where they are comfortable with money. We spent it. A lot. We never went into debt and prided ourselves on that fact but we didn't really save it either. We just didn't worry about it. I get it - we are lucky. I know. But to be fair, we did work very hard to get to that place in life...and that was the trouble. Working. Because no matter how much we love our jobs (well, I love my job - SDN - my hubby - tolerates his) we are still working and not spending our time doing the things that we want to do.
I want to be at a place where I can give photography as a gift to those whose lives would be enriched by it. New mothers, animal shelters, causes I believe in...etc... and SDN wants to draw. To be an artist and create graphic novels. We also want to travel and spend time together with our little Alice while she is still little. We want to cook together and live abroad and explore the rain forests and create. everything.
To reach these goals we need to be at a place where we don't have to work to make money. Retirement.
I started reading everything I could about retiring early, and believe it or not, it is surprisingly simple to do (notice I didn't say easy). To retire early, you simply need to save as much money as you can, invest that money and live off of the interest.
For those of you who like lists (like yours truly), here are some steps to retire early:
1) calculate your monthly expenses (don't forget to factor in big expenses like car repair and holidays - and spread that money out over the year)
2) Take that number and multiple it by 25 - this number is the amount of dollars you need invested in order to retire and just live off of a safe withdraw rate of 4%
3) Start saving for your goal (the number you came up with in step 2)
Simple, right? Simple but not easy.
If I had done the exercise two months ago, that number in step two would have been enormous and I could as soon as flown to the moon as saved that up. So, I made some choices. We were spending A LOT of money on eating out. Tons. I made it a goal to only eat at home and like magic that big number shrunk (plus, I now had extra monthly income that I would have spent eating out to save towards that big number).
It became a game: what things could I cut from my life and still be happy? The answer was surprising. Almost everything. Once I stopped spending money on new clothes and shoes and coffee out, I found that I started to appreciate all the things that I did have so much more.
* The smell of grinding our own coffee grounds in the morning and pouring over the frothy sweet milk
* The music filling my house
* The way my puppy rests her head on my lap while I am reading a book as the rain hits the window
I could go on and on.
I started this change so that we could retire earlier thinking that it would be hard to deprive myself of the things that I loved so much (eating at fancy restaurants, getting a latte whenever I felt like it, shopping) but what I found was that life became immensely more enjoyable once I cut those things out.
You're thinking I'm crazy, right? But here are a couple examples:
For my birthday dinner, instead of going out to eat sushi and spending around $100, my husband and I bought some fish and made our own sushi rolls at home complete with saki (for about $30). The food was amazing and plentiful. We had a blast making the rolls together and every bite was melt in your mouth delicious.
I joined a group called "buy nothing west seattle" and kept a close eye on it throughout December. It didn't take long before someone offered a stuffed moose. I knew that my kid would love it so I picked it up. I was thrilled when I realized that it was no ordinary stuffed moose. It was a KIDSIZED stuffed moose. My daughter absolutely LOVED it. She sleeps with it and drags in around everywhere even though it is bigger than she is! Plus, this stuffed moose is getting a new round of love where he might have ended up in a landfill. Total cost of the best holiday present ever? $0
My goal is not to live in deprivation but to treasure what I have and to get what I want in a more meaningful way.
Currently, we are saving anywhere between 40% and 60% of our take home pay (this does not include the 401K that we contribute to - so really those numbers are about 5% higher).
I'll go into more detail about how we will reach our Big Number goal later but I feel like this post is already too long :)