Last April we started our path to FI and we already see so many changes.
On the one hand, changes in our personal finance
We are more focused on saving and investing wisely. We listen to podcasts like Choose FI and read different blogs about personal finance and financial independence. We share ideas and discuss if we can apply them to our life.
We now have a long-term investment strategy. And it makes a difference.
We look forward to month closing, to see how we did and where we stand. We still have a lot to learn, but we know more than what we knew before.
We will report our results every three months because it is what makes sense the most due to our income structure.
We just closed May and I can tell you I feel satisfied. We have an exceptional situation this year, as we live in different countries due to our jobs. So we spend in trips much more than we would otherwise. But we are still on track to reach our 2018 investment goal. And it was a very demanding goal so I feel very happy about it.
The biggest change, however, were not our finances. Because Financial Independence is a lifestyle choice. And it changes your perspective.
On the other hand, new life perspective
That was the biggest change so far. I am not saying that my spending pattern changed dramatically (although thankfully I made some changes). But my way of thinking about my expenses did.
Now, before any expense, I ask myself: “What is this for? Do I really need it? Is it worth the money?”
Because now I have a plan B: save the money and putting it to work towards my 2018 target. And it is a strong option.
However, this does not mean that I only spend in things that are TOTALLY necessary.
When I ask myself the question “is it worth it?”, many times the answer is yes. And I am not talking about buying food or paying for the bus to work.
For example, I am not a member at any gym at the moment. And I miss doing exercise. So when yoga classes were offered at work I inmediately joined. It is 25€ a month for one a week. Is it worth it? For me yes. Because it feels good to move and to strech, so in my personal scale those are euros well spent.
But many times the answer is no. More than expected. Let me give you another example.
There is an Starbucks close to my office (which is not so normal in Spain, penetration is lower than in the US). If I felt down I´d buy myself a capucchino. I love the foam they make (I drink soya milk and they get it right). As time went by, it stopped being a treat and it was just routine. And a coffee at Starbucks is 3€ when any other coffee shop would do it at 1,3€.
“Is it worth the money? Not to me”.
So now I bring my soy milk to the office. I keep it in the fridge, and make myself complimentary coffee every morning (adding my milk). That gives me the energy I need to keep on with my day.
And, sometimes, I go buy myself a soy capuccino at Starbucks. Acknowleging the expense and enjoying it as a treat. Not as a routine.
Final thoughts: what is worth it for you?
As I mention in my previous post, the key for my change was to understand that cutting my expenses was needed to reach my dream life.
It doesn´t mean I´ll spend the next 10 years saving every single cent, I know that will burn me out. We are still planning on travelling, going out for dinner, buying some clothers and some other dispensable expenses.
However, we also decided we won´t buy a new car, neither an iPhone, and many other things.
It is a matter of personal priorities. Make this reflection: what adds value to my life? What is the best (and chepest) way to get that value?
Paula Pant has a post called “Timeline vs Intensity”. She talks about the two extreme ways to get to FI:
- agressive saving in a short period of time
- conservative saving in a longer term
We are still figuring out where is our balance point. How much are we willing to cut down expenses to get faster to FI? Ours is a long term journey, at the moment projections are around 17 yrs to reach FI, so we better dont forget to enjoy life in the meantime