My personal story of downsizing, building, and working hard to retire early.
It was actually easier in some sense when I was single and the money was mine alone to be responsible for. Now that Cowboy and I have combined households there are two people putting income in the bank. That also means there are two people making decisions about the income.
We are downsizing the house quite a bit, however many of you know we have purchased a 40 acre farm. Cowboy worked and saved for several years for the down-payment and about 1/3 of the out of pocket cost for the house. I built my credit and worked on paying off all my debt except my vehicle for work. We are a good team but it takes a lot of focus for two people to stay on task for a goal this big.
The term "Simple Living" is not really in Cowboys vocabulary. He likes to do all things outdoors which includes hunting, fishing, riding horses, working on the farm and camping. This includes all the big boy stuff that comes along with it. He also is a world class martial artist so he still likes to go to tournaments and support his students and judge competitions. This all cost money. The sponsors may pay his hotel and a meal or two but we cover most of those expenses. To me this is not a simple life but it is important to him and that is what deliberate living means.
My hobbies are yoga, exercise, reading and keeping a cozy home. I also love to go out with my friends to have a nice meal and an occasional movie. These things are pretty cheap to do. Shopping is not really my thing and I struggle to spend money on anything except books, healthy food, our home and of course our kids (this one is where a lot of our money goes).
You can see pretty quick where some of the compromise comes in.
Cowboy is 58 and I am 46 at the time of writing this. He is a police officer by day and every other hour of the day he runs his roofing company.I am a yoga therapist, own a yoga school, work in a medical clinic teaching stress management, do personal and business coaching, and I am a writer (though semi paid at this point on the last one). In the past two years his business has grown exponentially. I took another job in my field last year but we did not increase our style of living. I put all my checks in savings from the second job. We have used every extra penny to buy the farm and build the house and pay off debt.The big challenge is that we know we can't sustain working two jobs each forever. The upside is we are happy, we love our jobs and take pride in hard work. We would like to semi retire in three to four years to both working part time and fully retire at age 62 each. This plan works if you are younger as well. I've been following this way of living for many years and a I can tell you a 40 acre farm wouldn't be in the cards if I hadn't. And we don't make a ton of money. We have an average income. Very average. We both were in tough shape five years ago as we both had just gotten divorced and between us we didn't have $300. We had some pretty good debts to get out of as well and lawyers to pay off. This has all been done with hard work, saving, and living a simple life of needs versus wants. We feel very blessed but it's not because of luck it's because of working hard and dedication to our purpose.
How are we going to do become financially independent? Well here is what I know for sure. You can make a plan but that doesn't always mean it will stick. Life happens and you must be willing to be flexible. From my many years of writing down my goals I can tell you that most of what I have ever written down has either come true of some other priority came up that became a new goal. I've always hit my goals because I stay focused on doing a little bit "often" to achieve those goals. I believe strongly that you must have a map to know where you are going. So here I am going to share my map.
What does Financial Freedom mean to us:
1. No debt including the house.
2. The ability to live off working part time and savings.
3. The ability to save money towards retirement.
4. The freedom to do more of what we enjoy and relax more.
5. The ability to pay for anything we need out of our savings or part time income.
6. The ability to volunteer for causes that are important to us.
What we are doing to achieve Financial Freedom:
1. Have a talk with our six kids. Four of whom are young college age adults and set boundaries with what we can and cannot do.
2. Sell our house and use the equity to pay off our one debt (my car) and use that money towards finishing the work on the farm. Any balance of funds will go on the mortgage. I actually saved the money to pay off the car but we had some unexpected taxes so I've held on to it until we get moved and make sure we don't have to borrow money to finish our house.
3. After paying our bills and having our living money (food, necessities,and a nominal amount of fun money) we use any extra income that we make to pay the mortgage.
4. Not increasing our lifestyle. Still living like me make quite a bit less that we do. We have each doubled our income in five years and we still live like we make half. Even if our income hadn't increased we would have some plan for FI.
What does not increasing your lifestyle mean:
1. You live on half your income. This may mean working more for a short time to get your debts paid. You may have to start with less than half but make that your goal
2. Use all extra income first to build an emergency fund (start with $1000)
3. Pay all your debt off as quickly as possible by focusing on needs versus wants. Use all extra money to pay debt.
4. Once your debt is paid save three to six months income for your needs and a bit extra for emergencies.
5. Create a life that is sustainable for a work - life balance.
6. Live below your means. Just because you make good money doesn't mean you have to increase the size of your house or buy a new car.
7. Let go of what others think about you. Don't try to keep up with others expectations of what it means to be rich (they are probably drowning in debt, you don't have to).
Basic ideas to support financial freedom:
1. Live in less of a house that you can afford.
2. Drive a good, reliable economical used car.
3. Don't shop unless you need something.
4. Take care of your health by eating fruits and veggies and exercising often.
5. Drink water over anything else that cost money including bottled water. Buy a water filter and make your own bottled water. I reuse glass bottles from other things we buy.
6. Make outfits with what you already own and only buy what you need when you go shopping. Be aware of your needs before you leave the house.
7. Keep a tidy house, yard and car. The desire to have more is often do to a lack of taking care of what you have.
8. When you go out to eat share a meal, order soup and salad and water. Eat light. *Props to my friend Gayla for this idea!
9. Utilize your parks and outdoor spaces over a gym. Use videos online to workout at home. Google things like "Strength training or Cardio without equipment". You will be amazed!
10. Utilize great deals in your community. Tuesday is $4 movie night at a local theater and popcorn and coke is about $2. This cost us about 1/4 of going another night.
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