Just one year ago, my DH and I were saving about 10-11% of our income, now it is 30% and we haven't signifiantly changed our lifestyle. Reading this board, I decided we needed to do better tha 10-11% if I was ever going to FIRE.
Part 1. First I started tracking expenses. I had done this well while single, but with DH, kids, pets and all, I had let that slide. Second I set a budget of total expenditures/month. Then I stopped using my CC for all purchases - even though we paid it off each month. Just doing these things reduced spending by nearly $1,000/month completely painlessly. I still can't figure out what we were doing with it since we didn't eat out or spend on a lot of extra entertainment, just stuff, I guess.
Part 2. We also recently received an inheritance, invested with Schwab, and we wanted this $$ to keep working. In talking with my brother (CPA) he suggested we increase our deferred payments, generating significant tax savings, and then because our income was now too low for our budget, we withdraw funds from the taxable account to make up the difference. Because of the actions in step 1 (critical or this withdrawal stuff could get out of control), we have always taken less than I had initially anticipated. We also fully fund Roths.
All this took some explaining to my DH who was skeptical, but he agreed to give it a try. He is now convinced.
So, now we are saving 25-30% of our income, no real change in lifestyle, the balances are rising nicely and FIRE in 5 years for me is feeling more doable each day. No doubt the inheritance adds flexibility, and I could kick myself for not doing the first part sooner, but, I won't be too hard on myself since I am looking to the future.
Thanks for the inspiration.
Part 1. First I started tracking expenses. I had done this well while single, but with DH, kids, pets and all, I had let that slide. Second I set a budget of total expenditures/month. Then I stopped using my CC for all purchases - even though we paid it off each month. Just doing these things reduced spending by nearly $1,000/month completely painlessly. I still can't figure out what we were doing with it since we didn't eat out or spend on a lot of extra entertainment, just stuff, I guess.
Part 2. We also recently received an inheritance, invested with Schwab, and we wanted this $$ to keep working. In talking with my brother (CPA) he suggested we increase our deferred payments, generating significant tax savings, and then because our income was now too low for our budget, we withdraw funds from the taxable account to make up the difference. Because of the actions in step 1 (critical or this withdrawal stuff could get out of control), we have always taken less than I had initially anticipated. We also fully fund Roths.
All this took some explaining to my DH who was skeptical, but he agreed to give it a try. He is now convinced.
So, now we are saving 25-30% of our income, no real change in lifestyle, the balances are rising nicely and FIRE in 5 years for me is feeling more doable each day. No doubt the inheritance adds flexibility, and I could kick myself for not doing the first part sooner, but, I won't be too hard on myself since I am looking to the future.
Thanks for the inspiration.