What does it take to feel happy and fulfilled? Do you need to be able to spend extravagantly, or it is possible with a frugal budget? After my post on income, I want to consider expenses, the other factor in determining your savings rate.
When it comes to spending, the guiding rule I follow is:
Does my spending match my values?
Simply if the items I spend money on mean a lot to me, I will be satisfied. Even if to others my expenses are frivolous, non value adding and not frugal. I have my indulgences, my tracking has categories lots of people don’t spend money on. Some of these are travel, theatre, running, language learning; all items I personally consider enriching and hence worthwhile homes for my hard earned cash. I do approach most spending in a frugal way. For example, my Chinese teacher is in China as it’s better value and real Mandarin. Theatre tickets are more of the budget variety than top price seats.
On the other hand, lots of line items on other peoples budgets don’t appear on mine at all. Activities such as eating out, drinks out, sports matches, concerts, TV and just shopping for pleasure don’t appeal to me. They add no value to my life, so I try to avoid them as much as possible. These are the simple approaches which I consider frugal.
My savings rate
Over the last few years I’ve had a bit of a campaign to trim my expenses. I was running at £29.5k in 2015/2016 tax year, where I tracked, but did not actively challenge myself to be frugal. I started paying more attention after the incident (more details below). Then I went down to £21.5k for 2016/2017, and this year will be £20k give or take.
£20k feels like a good frugal budget for a single person, (plus cat and chickens) especially since £9k is a mortgage. I’m aiming to keep my savings rate above 80%, and I’m easily exceeding the goal this year.
FIRE in 3 years
I am aiming to retire early in three years times at the age of 40. How is this possible? By saving and investing enough cash to be financially independent. I’m frugal enough to have a high savings rate, and privileged enough to have a decent income to make this possible. To unpack these, I have earned a high income for five years, and have been ramping up my savings rates during these times.
As with all lifestyle changes, there was a major incident that caused me to re-evaluate my life. A colleague had big problems, and they led to him being so stressed and doing such a bad thing he is now in prison. The main driver behind his actions was a lack of money – he was making very good money, his was a spending problem, not an income problem. It was a wake-up call to me to save as much as possible, to avoid getting myself into such a situation in the future.
So the decent income is possible working in London, in IT. Yes it’s hard work, you have to be always on and adding value all the time, however the work is generally interesting and can be quite creative in it’s own way. I do quite enjoy going to work, hence have never quite understood those that dread going to work or spend Sunday’s stressed. So with the income and spending both under control, life is free to be enjoyed while I work towards FIRE. I’m never one for idleness, I have tons of hobbies and ways to spend time. Most of these are frugal, some more so than others.
Hobbies and other interests
I find getting outside and getting fresh air invaluable, and running is how I usually get my dose of real daylight. To say it politely, I’m not a fast runner, or really a good runner, but I have grit, determination and keep on going. Hence I am a long distance runner, marathons are my thing – aiming for two marathons a year. I look at running as free therapy in both the physical and mental ways.
Yoga is my complement to running; again I am not a natural yogi and am the opposite of flexible. Yet I really enjoy yoga, stretching out any tightness due to running, and if I practise regularly I find *shock* my flexibility does actually increase.
Again I’m lucky enough to have a good sized garden, which I mainly use to grow fruit and veg, and keep chickens. I can get great harvests of random items, one year it was cucumbers galore, many potatoes and courgette gluts are a real headache – when you are tired of chocolate courgette cake life is bad! Like most things in life, I garden in a minimal effort, maximum reward type way, I love doing the fun bits, less so the drudgery – weeds are a fact of life, rather than something to be excluded at all costs.
One of my more challenging hobbies is language orientated. Learning Mandarin, the language spoken by the most people in the world. I have to say I’m really enjoying this process. It’s hard, strange and sometimes bewildering. But when I manage to make a breakthrough, or when I realise I can answer simple questions the pride is immense. It feels good to be able to converse in a foreign language. And moreover, it makes me realise how UK centric my life is. Why do we always assume our way is the best? Latin alphabet vs Chinese Hanzi? Cutlery vs Chopsticks? It has opened my mind to my inbuilt assumptions and biases. This has resulted in making me think more about the lenses through which I view the world.
The greater meaning
So yes, I am on a journey to FIRE in three years, and ensure that my life has a purpose and is personally fulfilling. The most important part of any journey is working out a purpose, the why. For me, myself freedom (Zi You) is the ultimate goal. I’m aiming to be free from trading my time for money on a fixed schedule, and looking forward to more flexibility. Most thoughts on religion and spiritual beliefs will be covered in a later post. In brief, I’m a rationalist atheist, but I support your right to believe in any religion of your choice.
What does freedom look like
To be able to dedicate more time to causes I believe in, to travel the world and to explore my interests deeper. Maybe I’ll hit up a running camp for a few months to train for a PB. Or take a month long yoga retreat. I also fancy some long distance hiking, could I do a thru-hike of the PCT or AT? Should I spend a year in China to improve my Mandarin? Perhaps it will be time to begin my own start up? Or a non-profit? It’s that sort of freedom I am working towards.
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