I made mention of our most recent savings challenge in a recent post and tagged it #500in5. My hubby and I have decided that we’re ready to retire. Mentally, we are SO ready. But, financially? There is still some work to do. Interested in how others have reached FI (Financial Independence) early, we decided we need to be aggressive.
And thus, we bring you #500in5. Our attempt to save half a million dollars in the next five years, beginning July 1, 2016. If we can accomplish this while our other assets continue to grow, we will be close to achieving a number that might entice us to cut to part time work, do some consulting, or even walk away from our jobs completely.
Why did we start on July 1? Honestly, it’s just a technicality. We are longtime users of YNAB (You Need A Budget) software, but really only used it to track expenses the first few years. We started budgeting properly (aka the YNAB way) in July 2013, so I think of our own personal fiscal year as running from July through June.
Do we stand a chance of accomplishing this goal? I think so! In the last few years, we have been frantically saving for college. We hit our “magic number”…at least until the acceptance letters start coming in and we really know what our costs will be. For the last few years, we’ve been saving about $30k annually. We also both contribute the max of $24k/year to our 401(k)s, now that we’re officially “old.” We’ve also managed to fund a number of large projects and two new-to-us vehicles with cash over the last few years, but we have no big expenses on the radar for the next few years.
Wouldn’t you rather buy <something, anything> than save money? Not really. The idea of being able to spend my time on something other than earning a paycheck is actually quite appealing to me.
How are you doing? I am happy to report that we have saved just a little over $34k in the first three months. That includes $12k to our 401(k)s, $14k from the sale of some stock options, and $8k in budget excess now that we’re done saving for college.
The stock proceeds were a huge boost this quarter, and that only happens once a year. My target is to save $4k in retirement plus another $4k each month, and then hopefully have a few hundred dollars left over each month in the budget.
Off to a great start! Signing up for AARP now…