{"id":7036,"date":"2019-07-15T03:13:34","date_gmt":"2019-07-15T07:13:34","guid":{"rendered":"https:\/\/marriagekidsandmoney.com\/?p=7036"},"modified":"2023-03-29T14:21:41","modified_gmt":"2023-03-29T18:21:41","slug":"decreased-annual-expenses-20000-increasing-fun-by-10000","status":"publish","type":"podcast","link":"https:\/\/marriagekidsandmoney.com\/podcast\/decreased-annual-expenses-20000-increasing-fun-by-10000\/","title":{"rendered":"How We Decreased our Spending by $20,000 (While Increasing Our Fun by $10,000)"},"content":{"rendered":"\n

In order to achieve financial independence, you need to first understand what your annual expenses are. That\u2019s how much money you need to live comfortably every year.<\/p>\n\n\n\n

Your annual expenses can include things like housing, transportation, food, utility bills, entertainment, travel and the many other things that make your life \u2026 well, your life! <\/p>\n\n\n\n

For our family, I\u2019ve found that number to range between $60,000 and $70,000 per year. That number is after taxes and it doesn\u2019t include money for saving and investing. <\/p>\n\n\n\n

With lower annual expenses, it would definitely be a lot easier for our family to become financially independent.<\/p>\n\n\n\n

If we're using the 4% rule to calculate how much to save to become FI, then we\u2019d need $1,500,000 – $1,750,000. Considering I have around $4,000 in a taxable brokerage account at 37 years old, that\u2019s going to take quite a while!<\/p>\n\n\n\n

But a few years ago, I started interviewing people on my podcast<\/a> about their financial independence plans and successes.<\/p>\n\n\n\n

I\u2019ve chatted with some couples that happily live on around $30,000 – $40,000 per year<\/a>. With annual expenses like that, you could hit FI at $750,000 – $1,000,000. That\u2019s a  lot more feasible when you factor compound interest into the equation.<\/p>\n\n\n\n

As I continued these interviews, I got inspired to lower our family\u2019s annual expenses. With lower expenses, our family would be able to hit FI much sooner!<\/p>\n\n\n\n

I was also conscious of not whittling down our expenses so much that we wouldn\u2019t have fun together during the early part of my marriage and our kid's lives. <\/p>\n\n\n\n

So \u2026 how can we decrease our annual expenses while increasing the fun in our lives?<\/p>\n\n\n\n

Well \u2026 here\u2019s what our family did over the last 4 years to make this a reality. <\/p>\n\n\n\n

Decreasing Our Expenses<\/strong><\/h2>\n\n\n\n

1. Pay off the Mortgage<\/strong><\/h3>\n\n\n\n

When we bought our home in 2013, my wife and I agreed that we\u2019d pay off our mortgage in less than 5 years<\/a>. This would allow us to own our dream home in our ideal neighborhood with a great school district \u2026 and live there mortgage-free. <\/p>\n\n\n\n

This 4-year mortgage freedom process<\/a> helped us to reduce our annual expenses by $14,000<\/strong> per year. <\/p>\n\n\n\n

\"Mortgage<\/figure>\n\n\n\n

2. Save Money on Groceries<\/strong><\/h3>\n\n\n\n

In 2014, we were shopping at Kroger for our regular grocery needs. It\u2019s a great store with an awesome selection, but it\u2019s a little pricey. <\/p>\n\n\n\n

After chatting with some frugal shoppers, I learned about Aldi<\/a>. My wife was hesitant at first because of the following reasons:<\/p>\n\n\n\n