I love this topic! I wish I had known how to do this, but I didn't so I made up my own rules as I went along.
I started late too, at 51 after a rough divorce with nothing but debt remaining (though I also had a steady job). At 58 I am on course to reach ER after a total of ten years, and my method is outlined below. So, I know whereof I speak. I really have no advice for married people (good luck?), but I know how to do this as a single person. Here's my best advice for a single person looking for ER:
1. If you don't have one, get a steady job with a 401K plan. If this job pays less than $40K-$50K (in middle America - - more in expensive locations) you need a moonlighting job as well. Then we start on ER planning.
2. Pay the maximum to your 401K ($15.5K along with over-50 catchup of $5k if it applies to you).
3. After the 401K deductions are made, divide your newly reduced take-home pay into three equal piles. One is housing, one is other expenses, and one is for making progress towards ER.
"PILE#1": HOUSING - -
If you presently spend less than 1/3 of your take-home pay on housing (rent or mortgage), good! You can put the remainder from this pile into either of the other two piles. Your choice.
If you spend more than that on housing now, you have to find cheaper accomodations. If there are none cheaper, then you need to start adding roommates, get a job near cheaper housing and move, or moonlight if you aren't already doing so (so that this pile of money is bigger).
"PILE#2": OTHER EXPENSES - -
Don't forget that along with the usual short term expenses, you will have some large though infrequent expenses that need to be paid out of this, such as a new roof, a root canal, a blown TV, unexpected medical bills. So, try to live like a college student, on a shoestring, and put some aside for these long term expenses.
Don't expect a budget to fit your usual lifestyle. You need to make your lifestyle fit into an appropriate budget in order to keep your expenses down. You need to adopt this budget as the lifestyle you can afford, and you will carry it on into ER.
Healthy food is a priority. Without decent health, you can't earn money.
It's very important to minimize recurring expenses because they really add up.
All your bills (except mortgage/rent), minimum credit card payments, and other expenses come out of this pile. Don't pay bills late or bounce checks; the fees add up.
No further credit card buying or loans are allowed, unless they are paid off each month using this pile.
"PILE#3": MAKING PROGRESS TOWARDS ER - -
This is the fun part. Use this money to:
pay off credit cards (and tear up all but one)
pay off car and household loans early
down payment for a house & getting the house paid off before ER (unless you expect a substantial pension and/or substantial social security). Once the house is paid off, the housing pile is merged into this pile.
emergency fund of 3-6 months salary
(At this point, you owe nothing to anybody, you have no rent or mortgage, you have an emergency fund, and 2/3 of your salary to put towards ER! )
properly allocated investments in Vanguard mutual funds
Keep checking and tweaking your plans, and monitoring your progress. This CAN be done.
