When Lisa first learned about the financial independence, retire early (FIRE) movement she was stunned that so many people, often younger than her, could possibly save enough to retire. Reading the blogs and first-person stories invigorated her. She wanted to follow suit. It changed the way she and her husband spent money. They cut out restaurants, wore old clothes and avoided coffee shops, funneling all the extra cash into paying down debt and building retirement funds.
“It really did motivate us,” Lisa said.
But as someone who has worked in the pharmaceutical industry for a number of years, she never had a huge problem with her job. The more Lisa saved, though, the more she felt annoyed at going to work. The more she saved, the more she wanted to watch HGTV before bed. The more she saved, the more she couldn’t understand why she should walk around in a coat with holes in it simply to prove that she was good with money.
The whole effort “made me unhappy,” said Lisa, who asked to only use her first name since she’s still working full-time. That’s why, four years after starting her FIRE goal of retiring young, Lisa and her husband decided to abandon the ‘retire early’ portion of their savings plan. Instead, she’s decided to focus on financial independence, but also not worry if they want to eat out on a Friday night.
There’s a fine line between frugality and feeling guilty over every dime that you spend in order to save a little bit more. Those that enter FIRE often ignore that line during the accumulation phase, saving as much as possible without regard to how it makes them feel today while sometimes sacrificing their health or well being. But it’s not a feat for everyone. For Lisa, this excessive frugality only became a hindrance to life.
It doesn’t mean she’s giving up saving. Or now, suddenly, going to rack up credit card debt. Instead, Lisa, who blogs about her experience at Mad Money Monster, is reevaluating her life again, figuring out what to keep and what to ignore when it comes to her financial independence (FI) strategy.
Abandoning Her Great Health Care Wasn’t An Option
As they saved, one factor that grew increasingly concerning was the health and welfare of her mom. “My mother depends on us for help for basic living expenses,” Lisa said. She expects to care for her mother as she grows older. While Lisa was making strides paying back debt under the FIRE plan, she had to spend $2,000 on her mother’s dental expenses.
Usually that cost comes out of pocket, and they expect to have to do the same with vision care and some other wellness needs.
This unknown complicated their financial picture. But also Lisa sees her mom’s situation, and then recognizes her luck with her current health care plan, which she describes as “really good.” The idea that she would walk away from that plan, simply so she could retire early – she’s about 60% of the way to her original FIRE mark – she now views as “selfish.” And she’s not comfortable with some of the other options out there for health care coverage, including the public markets or health shares.
“For me to walk away from that [healthcare] would be kind of dumb,” Lisa added.
Keeping A High Savings Rate
Despite rejecting the idea of early retirement at this point in her mid-40s, she’s made great strides in reshaping her financial situation.
When she learned about FIRE, her and her husband had just walked away from buying a large, expensive home that would have put them in a tricky financial predicament. They thought they needed the big house because that’s what people did after getting married. Instead of getting the house, she’s paid off her student loans, two cars and some credit card debt. The family has also invested in two single-family hoes, which they rent out, covering the mortgages.
At the peak of their saving they stashed away about 70% of their income. Now it’s closer to 50%. Still a strong level, but not with early retirement as the goal.
Lisa’s realization that there’s little desire to retire before traditional age has given her the freedom to build wealth for other purposes. She has the financial knowledge now and she’s using it to provide a large inheritance for her daughter one day.
“I want to build legacy wealth for my family,” she said. She has no problem staying at her job to grow that wealth.
But she’s also in a much more secure position, whenever her job does go away.
She’s Not Deprived Of Time
Often when people say they want to retire in their 30s or 40s they have dreams of traveling across the world, seeing new sights and meeting new people. That’s not the case for Lisa. “I’m so content with and entrenched in the adult family life,” she said.
She doesn’t demand much more travel than the summer vacation her family already goes on. Meanwhile, her husband, who works in the film industry, never wants to retire because he’s already found a job he would do even if he didn’t have to work.
“I feel like [we’re] not being deprived of time,” said Lisa.
And now that she has clarified her goals, it makes going into work much easier.