This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
I hate to admit it, but I’m forgetful sometimes. There are days when I leave the house and for some reason, forget to lock the door. The crime rate in my city is fairly low, so the risk of theft is minimal, but it’s probably not one of my best ideas. My wife and I laugh when we stop to think what we would really lose if someone came in and emptied our house of everything we owned. Our condominium insurance covers the contents of our house for $20,000 – we would have a hard time spending half that amount of money to replace clothes, furniture and electronics stuff.
Most of the money we spend in a year (from reviewing our “non-fixed” expenses) is traveling, driving around the province to visit friends and family. Our spending around the house is minimal, at best – other than attempting to increase her clothes collection. My TV is over 10 years old, and I dread moving it around (it’s a beast). Our furniture is serviceable and comfortable and works for us.
When we started down an Early Retirement path, we knew we would have to prioritize our spending away from typical “luxury” items to shift that money to paying down all debt and eventually ending up with enough money invested to be financially independent. If all goes well, we will achieve financial independence by the time I’m 45 (11 years from now).
Besides our house, our personal balance sheet shows very little in the way of assets. Everything we own can be replaced with a few calls to Kijiji sellers. I have maintained my “student” lifestyle, which does provide a certain level of freedom – a lack of attachment to “stuff” has definitely assisted significantly in our financial plans. If anything, we would probably enjoy our home more if we emptied it all out and started over again.
My wife and I talk about all of the things we could spend money on, and prioritize away from items that we didn’t care about and spend as little as we can on things that do. I think our decisions are a little different than a conventional household because we have a significantly shorter window available to us to achieve the financial goal, which forces us to optimize much more.
I’m not really sure whether my spending patterns would be a lot different without setting the goal I did, but I find having even a moderate goal in mind forces me to think and make do with what I have, whether it’s a conscious decision or not.
What kind of stuff do you just stop caring about in order to increase your saving level?