Hello October! This is probably my favorite month. I love Autumn, the changing leaves, Halloween, and so many of my favorite people have Birthdays in this month! Today, I am sharing our September Financial Update. We have some major updates to our financial goals that I will be sharing in this post. We pretty much decided that we want to accomplish Partial Financial Independence rather than Total F.I. Once we do this, I am going to stop working my full time job, to work on my own financial planning business, and my husband is going to work about 25 hours a week. That’s it. We do not really care to fully stop working, but just work much less and when we want to.
I know there are going to be people that will say: “WeLL ThAts Not TEChniCaLLY FIRE tHeN. YoU’Re StIll WoRKinG.” Yes, but F.I.R.E. is a totally personal journey. For us, the goal is to work less and to have more freedom and flexibility in our day-to-day life.
Our Plan to become Mostly Financially Independent:
- Max out our Roth IRA & HSA contributions annually, while completing the following steps:
- Focus all of our extra money on paying off the house.
- Hit our goal of $30,000 in savings, while completing a lot of our travel goals.
- We mostly retire. I work on being a financial planner on my own (or just not work) & my husband goes part time. We will also probably have a kid around this time.
Currently, our monthly expenses to survive, plus a tiny bit extra, are $3,000/month, so $36,000/year. When we pay off all of our debt (House & Car), Our Monthly Expenses would be $1,460/month or $17,520/year. We want to have a child (probably) some day though, so I am adding an extra $540/month to our post-F.I. expenses just to be safe and make room for that, which totals to $2,000/month or $24,000/year. I’m estimating $540 a month for a child because we will not need to pay for childcare at all, will buy things second-hand, and receive gifts from others. We want to keep working full time until we have a child. After that, we want to focus most of our time and energy on them.
If my husband works 25 hours a week (post F.I.) that will provide us about $25,000 a year of income & we will have $ invested as well, which will provide some extra income, if we choose to withdraw from our accounts. So, Our Post F.I. Income will be $25,000/year. Which means we will easily be able to survive on just my husband’s part time income, plus extra spending money if I make any money, or money from our investments. Also, our total investments will go up by about 7% annually, because we are planning on not touching our investments to just let them grow.
The main concern is paying off our house & car, because after that we can survive on half the amount of money we do now. When our house is paid off we are mostly financially independent!
The first few years after “F.I.” we are going to try our best to keep our spending low & not travel since we will hopefully have a little one. (This is like 4+ years form now haha) We are planning to do most of our traveling in 2021-2025, after COVID and pre-having a child. (Side Note: when we reach our goal F.I. numbers/have a child we are going to go down to one car, cut out even more expenses, & sell a lot of our stuff)
I’m very excited about this new plan and have a good feeling about it! I think this is going to work a lot better for us than total F.I.R.E.
Our NEW Goal Partial Financial Independence Numbers:
- $100,000+ invested as extra money.
- $30,000+ In Savings for Emergencies/Baby Fund.
- An HSA we are Maxing out every year while working for Medical Expenses. (No specific Goal Number)
- $0 Personal Debt- No Mortgage or Car Payment brings down our expenses a ton ($1,540/month).
- With husband & I working part time.
Our Current Numbers as of October 1st, 2020:
- $24,550.76 Invested.
- $10,042.43 In Savings.
- No HSA yet, will get one Oct. 2022.
- -$150,727.07 Total Debt.
- We are both still working full time.
Total amount needed to reach Partial F.I. Goals: $246,133.88
As always, thank you for reading! I’m excited to track & post our financial journey.