One of the most common questions online and in the Meetup groups I go to for FIRE-minded people is how to get their significant other on board. If you do not have a significant other, here are some online dating tips for men. Note that I’m a woman, so I have no clue how to give tips to women.
The more you think about it though, the more the question is similar to “What should I get my significant other for his/her birthday?”.
Hard to answer, right? It’s very specific to your partner’s wishes and goals.
Here are a few steps to figure out the best way to get your significant other on board.
Do they truly understand FIRE?
For most people, telling them they could retire leads them to a defensive state. When humans are told something so contrary to their beliefs, they tend to shut down and stop actively listening. Take a look at the chart below. Did you know that your current savings rate tells you how many years it will be until you reach financial independence? If not, calculate it below:
Savings rate = Savings/(401k contributions + aftercontribution taxed income)
The average American save 6 percent of their income — that’s why most people retire at 65. It literally takes their entire working life to build a nest egg.
If we assume the average American household saves 6 percent and has a $60,000 pretax income, we can try and shave off years to your early retirement. I’m using the Value Penguin for average household data.
Savings, savings, savings
Are you and your partner contributing to your 401k and earning the free 100 percent company match? Have you set up a taxable account and IRA? Make sure the expense fees not grossly inflated. If you have a side hustle, you can sock an extra $54,000 per year in pre-tax money for each of you.
The average American household spends $1,600 on clothes every year. I’ve had one piece of clothing wear out in the past 5 years. Find out how to stop spending money on clothes. Go cold turkey like me for a year. I’m sure most people who are considering FI have a ton of clothing due to American consumerism (I’m guilty of this too).
Buying lattes everyday? That’s $1,500 a year. Find out how to make cheaper coffee and save $500k over the course of your life. You can also buy Costco ground coffee and make it for 5 cents a cup. The average American household spends $3,000 a year on eating out. Learn how to meal prep delicious food and spend less than $40 a week on groceries and live extravagantly. For us, the cheapest groceries we could find was at Costco. Depending on where you live, you might want to check out BJ’s, Sam’s Club, Aldi’s, etc. The Value Penguin research shows a household spending $6,600 a month on food. Can you do better? Absolutely.
How much are your transportation costs? If a household has 2 cars, that’s close to $9,000. Would it be cheaper to move to housing that is slightly more expensive and save time and transportation costs? In large metropolitan cities you can spend under $150/year for a bikeshare membership. Way cheaper than a $130/month subway card!
Lower spending in general by making saving one of your habits.
Show your partner you can be financially independent and retire in less than 10 years with a side hustle, while still enjoying life. Wouldn’t it be nice to stay home with the kids? Think of all the time you could spend with them, and all the free time you would have during the day when they weren’t home!
You can live life extremely luxuriously without needing to spend a ton of money. Learn how to become Yelp Elite and get invited to events with 5 course dinners, private waltz classes, and wine tastings. Get into miles and points and get business class flights across the globe for less than $10. Figure out how to stay on a private island in the Maldives with just points.
I believe that humans believe they can do something when they see other humans have done it too. Other bloggers have retired as early as their late twenties, with many retiring in their mid thirties. If they can do it, so can you! Most bloggers I’ve seen have had extremely normal jobs.
The cheaper coffee, meal prepping at home, and less clothing consumption I just mentioned alone are a 50 percent savings rate of your after-tax income if you’re maxing out your 401k. You’ve just gone from 52 years until retirement to 15 years until retirement. You’re retiring nearly 70 percent earlier than you would have! All it takes is optimizing your savings in your early years. As you grow your frugal muscles, you’ll be able to maintain your frugality while working on promotions and side hustles for more income, to retire even earlier!
If you can save 70 percent of your income? You can retire in 8 years. So if you’re 22 and just out of college, you’ll retire before your third decade alive!
It’s so much easier to go back to frugality too. If the market goes crazy and you’re not comfortable taking 4 percent out of your investments even though the math says it’s ok, then just cut back. Frugality is like a muscle, it’s much easier to build it up and use it in time of need, than to spend time trying to figure out how to use it when you need to.
There are so many more ways to save money though, and I would encourage you to read this blogs to learn about making money moving it around, travel hacking, moving broker accounts, etc.
What if the SO asks what you’re planning to do after financial independence?
Financial independence isn’t all about early retirement. It’s about the freedom to do what you want. If you’ve ever wanted to help the world, but were guided into a high-paying job for monetary reasons, you can now volunteer and use the skills you’ve developed to change the world. A ton of organizations lack spreadsheet knowledge, operational efficiency, marketing, programming, and copywriting skills. You can now help the world but still get paid with your nest egg. You can spend it volunteering at your child’s school or creating the next cool startup without worrying about if there will be enough money for rent if your startup blows up in your face, or you can just read books, watch TV, or play video games. You can do anything you want. No one is there to judge you if you don’t let them.
It just takes a little sacrifice and a few habits to get going.
So, is your SO in? If not, what are they still unsure about? If yes, what was the ultimate thing that convinced them?
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Olivia worked in finance and wants you to learn the secrets of financial independence. She’s on track to reach financial independence before 30, and she wants to teach you how you can retire in less than a decade as well.
She thinks everyone needs an emergency savings fund and uses CIT Bank . They have the highest yielding rate at 1.55% and only require a minimum of $100. No monthly fees or charges like other big banks!
Her favorite free investment plan is from Ellevest. Go to Ellvest and click “Get Started” to get yours.
Her favorite personal finance tool is Personal Capital, which allows her to track her spending, historical net worth, and monitor her credit cards. It’s an upgraded version of Mint, in her opinon.