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.
No regrets
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?
What a life change! And it’s never too late, that’s fantastic your family had committed to a different lifestyle.
Thanks! Life has changed in countless ways since setting this goal and making changes in our financial situation!
Amanda, I can relate to your story as I too joined the Financial Independence bandwagon “late” in life as well! Through college and my 20’s, I didn’t think about it very much. I had a good job and enjoyed life although I was careful to never get into very much debt except for car payments.
I would say that once I came out of business school and we had our first child, I started to really look at our finances more seriously. In 2008, I came within a whisker of getting laid off at work and that’s when I REALLY started taking a look at what we were doing financially. At 46 now, I’m hoping to be financially independent by 55. Not an astounding feat compared to some people that are getting there by 30, but better late than never! And, to the point you made above, we are enjoying a great life now so I wouldn’t have it any other way!
Thanks for sharing your experience, Jon! The possibility of a job loss can definitely spark a “moment” and it’s great you took it and made changes for a positive financial future. Being FI by 55 is great, in my opinion. Definitely better late than never!
The thought of working into my mid-60s always depressed me. It was like a miserable act of endurance.
MMM was also my first introduction to early retirement and it was like a shot of adrenaline! Suddenly I could see light at the end of the tunnel and I also had a plan for how to get there (in a quick’ish amount of time)
Agreed, Ty! While I know my husband and I will always have a continuous stream of projects that some may view as “work”, it will be work we love. Same here with MMM – it was like a wake up call. When I found his blog, I think I devoured the whole website in a week or less.
““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. ”
That is one awesome statement. It’s a choice and it’s one that I was taught was normal, but I’m not doing that to anyone else. You’ll never hear me say go to college and take on student loans because that’s normal. It’s not normal and there are plenty people who have resisted that urge to go along with what our culture contends with.
I’m choosing to get rid of debt and pursue financial independence for my kids because I realize that if I don’t try to break they generational cycles of poor money management, debt, and living to paycheck to paycheck, no one likely ever will.
Thanks, Latoya! Yes, many believe loans and payments are just a normal part of life. I’m trying hard not to pass that along to my kids either. My son will be going to college in 2 years and, though we have some money saved, we will will not finance the entire four years (if he chooses 4 years). BUT, we are not encouraging student loans, instead we are exploring options for community college, working to pay for tuition, scholarships and grants, and other options besides the loans. Pursuing FI for your kids and to break the cycle is the best reason of all!
This is such an upbeat post Amanda, I love it! So inspiring. I think finance blogs have really helped inspire me to aggressively tackle my debt and plan for the future.
Thanks, Francesca! Personal finance blogs have been a huge source of inspiration to me for several years. Don’t know where I’d be without them!
I remember hearing someone say about debt, “You’ll always have it.” NO! Not true. You’re right in saying it’s a choice. In my books, you started young, Amanda. You’re already in a strong position at 40, and you’ll just ramp that up over the next decade or so as you near FIRE. My husband and I really did start late – but we’ve made huge progress, so it definitely wasn’t “too late”.
Thanks for the positive comment, Ruth! We did figure things out soon enough to ensure a solid positioning for FI – it will be interesting (and exciting) to see how the next 10 years go, for sure. You and your husband may have started a little late, but your progress has been astounding – I look forward to following along as you near FIRE!
I also grew up hearing “You’ll always have a car payment” and “You’ll always have a mortgage.” I think these saying are very defeatist, but a reality of a person who subscribes to hyper-consumerism. But FIRE has shown time and time again that you don’t have to stay in debt forever. 🙂 It’s truly life-changing once you realize freedom is actually attainable.
Agreed! This type of thinking is so ingrained in our culture. Those who have achieved FIRE give us the proof that getting out of and staying out of debt is possible. I know the path has been life-changing for me already.