My husband and I once had a bad car-buying habit. We would finance cars, pay them off, keep them a year or two, and start the process all over again.
Someone close to me once said, “You will always have a car payment”, as if it was a fact of life.
I took this statement to heart. It became something I believed and subscribed to for years, a scapegoat for the continual cycle of consumer loans.
We didn’t like having consumer debt and did successfully pay off several auto loans, but doing this over and over again undoubtedly slowed financial progress.
The possibility of FI?
Though we’ve always had aspirations to retire at the age of 55, it wasn’t until I found early retirement blogs, such as Mr. Money Mustache and Early Retirement Extreme, that I realized the possibilities of an even earlier retirement.
I studied how others had reached early financial independence (FI) and ran our numbers over and over again.
We did have a decent start and we realized if we behaved ourselves and really focused on saving more and spending less, FI could be sooner than anticipated. But not if we continued down the path we’d been on.
After calculating how much we had spent to pay off car and camper loans (plus the dreaded student loans), we realized if we had invested that same amount of money in our retirement accounts, we would have been almost a full decade closer to retirement. That was enough to make us sit up and take notice.
“You’ll always have a car payment, or a mortgage, or student loans” is prevalent thinking in our culture, but the important thing to realize is it’s a choice.
The idea of early financial independence was just the thing to prompt us to make changes.
We made the choice to stop the cycle of debt to work toward financial freedom.
A goal as incentive
Having a concrete goal forced us to step back and take a closer look at where our money was going. Though car loans were the main leak in our budget, we found other areas to tweak and this new focus provided a strong incentive to improve.
But a couple of years ago, we had a hiccup and totally fell off the wagon by buying a new house. The reason for the move was prompted by the desire to be in a new school district and we haven’t regretted this decision once.
While this did set us back, it was a conscious decision, one we made knowing it would push our early retirement goals out further.
I don’t want to look back at my life and feel like I’ve wasted years just to have new cars or other material “things”.
Life is not guaranteed. I’ve heard countless personal stories of people who retire at standard retirement age and die soon after. The key is to have that balance of enjoying life today while still planning for tomorrow.
We could hit the FI goal even harder and hustle our a$$es off to retire even sooner, but we have a great life right now.
Sometimes we have lazy days and several times a year, we take a week off and just stay at home or travel with our kids.* Yes, this costs us a little money, but we will never get back today.
My only regret is I didn’t have this epiphany earlier. Where were you in my 20s, MMM?
At 40, we may be a little late to the early retirement game, but better late than never.
It’s never too late to change
Maybe you look at early retirees with envy and think, “It’s too late, I’ve made too many mistakes with my money, and I’ll never get there”.
It’s never too late to make changes. So, early retirement seems out of reach…how about taking steps now to reduce the financial stress, to have more time and energy to focus on the things you love?
So, find your goal and make the intentional choices to reach it, but don’t forget to enjoy the journey. You never know what joy you will find along the way.
What has inspired you to take control of your finances? What are your financial goals?