Learning about FI and orientating our lives in a new direction
Written By: Collin
Hey, Collin here. Welcome to the very first blog post for FIAdventures.com. I wanted to talk about why Alli and I are starting this adventure towards FI (Financial Independence) and what it means to us.
I've been well aware of some Financial Independence blogs for a while like Financial Samurai and Get Rich Slowly. We also, went through Dave Ramsey's classic Financial Peace University with some friends just a year or so ago. And Alli and I were already a little bit frugal and not spending above our means 90% percent of the time. But I still didn't take personal finance that seriously.
I didn't really budget. Alli did, but I never looked at it. If I wanted something, I bought it. If we didn't feel like cooking and didn't have leftovers then we went out to eat. Add two kids into the mix and it was no problem at all to spend our way through the year and arrive at January with little to no money saved.
Except it was a problem.
And the problem was that I realized if I had made this mental switch and put in just a little extra time and thoughtfulness 5-10 years ago, when I first discovered some of these resources, then we would be debt free by now and have way more money saved up for retirement.
But now we're doing an about face and we're 100% in on the financial independence journey. And when it comes down do it, the financial benefits are just the icing on the cake. That doesn't even factor in the mental and emotional growth we've experienced this past month by focusing on areas in our lives not built on the rickety foundation of spending money.
This new FI adventure we're going on represents so much more than saving up money so we can pay our debt off quicker or retire earlier. It's all about the mindset the choices you make in life. Here are my thoughts on what this mindset shift means to me.
It's about choosing intentionality.
Choosing to be intentional in our purchases, how we spend our time, our relationships, and our legacy. So many people just drift through life every day. They wake up and eat the same old breakfast. Drive the same old car to the same old company and do the same old work. Eat the same old lunch. Drive the same old route, back to the same old home. Eat the same old dinner with the same old spouse. Then watch the same old tv and go to sleep in the same old bed. Then wake up and do it over.
Now there is nothing wrong with having the same job, house, spouse, and food every day. It's just that in that scenario it's so easy for someone to drift along in life and the next thing you know 20, 30, 40 years have gone by and they're wondering where the time went.
I want to wake up every day and be very intentional about each decision I make. I want to choose to do things that bring fulfillment to my life and help to create better lives for my family and friends around me.
It's about choosing time over money.
Time is our most precious resource. Unfortunately, money often takes precedence over time. By focusing on money it's easy to turn into a bill-paying machine and not be intentional with the one resource that you can never actually get back.
So, I'm choosing to focus on time over money and make sure that I'm spending my time in wise ways. I want to spend my time building relationships with those I love, enjoying my hobbies, and trying to make this world around me a slightly better place.
It's about choosing freedom.
I want to be free from the weight of debt that is always sitting in the back of my mind. I want to be free from the anxiety of living paycheck to paycheck. And to have freedom to wake up every day and do the things I love to do and spend time with the people I love.
It's about choosing trust.
I'm a Christian, so for me, this is deeply spiritual too. I'm choosing to trust that God has provided enough for me. My life is very blessed already and I don't need to be living a consumerist lifestyle always trying to have more and better things. I'm trusting that if I am a good steward of money and choose to focus my life on things more valuable than money, then God will continue to bless me with a life rich in relationships, impact, and experiences.
Not everyone can just wake up and decide to live a financially independent lifestyle. I don't think some people are successful just because they make good decisions and some people are unsuccessful just because they make bad decisions.
I fully realize that everything I just wrote is coming from a place of extreme privilege. I didn't grow up in poverty, Alli and I came from solidly middle-class families that raised us well and set us up for future success. We have excellent support systems and we live in a great area of a great country. We're white and we can come and go as we please without people making assumptions about our intentions because of our race.
**We are privileged and we benefit from it without having to do anything at all. **
But, I do believe that people have a choice. They have a choice in what they believe about other people and the world. They have a choice in what they believe about themselves. And they have a choice to take responsibility for themselves and try to do something every day that makes their lives a little bit better.
Now that I've laid the groundwork for why Alli and I are choosing this new path forward I want to tell you about our plans for this blog. I want this blog to be a place where we can share about our experiences on this FI adventure. I plan to write about a lot of topics but using the vehicle of money and financial independence to deliver the message.
For some reason people find it hard to talk about money... but they're always interested in reading about someone else's money.
Each month I want to note how far we are into our FI adventure and outline a theme for the month. I'll talk about that topic, how it relates to FI, and what it looks like in our life.
I want to have two metrics we can use to gauge our progress towards financial independence. The first one is a savings rate. This will be a simple formula of:
((Take Home Pay - Spending) / Take Home Pay) * 100 = Savings Rate
Essentially it's what percentage of our monthly income are we saving instead of spending. Over the past 12 months, we've averaged a 3.74% savings rate. I just grabbed this info from Mint so it includes things like a tax refund, investment growth, and random cash. It's not great by any stretch of the imagination, but at least it's not negative.
This month (October) we hit a 23% savings rate. This is our first month dipping our feet into a bit of frugalness. My ultimate goal is to get and keep this rate above 50%. In fact, the plan I've outlined for us should put us around 68-70% savings for the year.
The second important metric is our debt. At the time of writing this, we have $103,552.68 in debt, all from student loans. Needless to say, paying this off ASAP is our primary goal at the moment. After that, we'll have a lot of options for what to do with the income we're saving.
Hopefully, this post will resonate with some people and we'd love if you would continue to follow along on our FI adventure.