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Early retirement considerations

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I control spending without a budget. I just naturally make reasonable choices and the areas where I spend money, I’m not willing to stop because it brings me happiness.

I advocate tracking expenses closely because in order to know how much you need to retire, you must know how much you spend. I advocate tracking spending closely in retirement, especially early retirement, because overspending by a small amount can significantly impact your odds of running out of money.

I personally don’t view a budget as a way to force myself to act responsibly. 

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I agree with Steve. I don't have a budget. It's boring. I feel I can intuitively know when I am spending more than I should. I have an internal compass it seems. But for some folks, a budget is a wake-up call and can help them figure out why they are always broke at the end of the month. When I taught personal finance I asked my HS students who worked if they blew their whole paycheck every month and every hand went up. They had no Idea where the money went. Most wished they could at least save some cash each month for emergencies. I told them since they lived at home there was no excuse. why they couldn't. I taught them about the pay yourself first concept and how most people do the opposite. I explained many millionaires got there by using that method. Their eyes lit up. I got them started with a budget spreadsheet and taught them the envelope system where you break down expenses plus wants and needs into envelopes and put your paycheck money in those envelopes by category. Once the envelope was empty in that spending category you could no longer spend any more in that category and you could not borrow from another envelope. Whatever was left over at the month was theirs to spend. It worked for many of them elementary a concept as it seems. I had them explain to the class how the process went and it was amazing how many less Starbucks treats they were buying and how much more careful they became burning car gas. 

I finally got my son to understand what paying yourself first is all about. I tried to get him to do a budget but he wouldn't bite. But the pay yourself first concept is working and he is starting to understand that in order to save, the money you plan on saving must no longer be easily accessible to you.


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On 10/29/2018 at 6:53 PM, EdLaFave said:

Can you expand on that?

The FIRE folks I know or have read, are just trying to maximize their happiness or reduce their unhppiness depending on your perspective. Morals or right vs wrong don't even enter into the equation.

In fact, the only "puritanical moralizing" I've seemed to encounter is that working hard at a career somehow makes you a "good" person and the person who wants to retire to sit at home and relax for decades is somehow "bad".

This is a marginal issue, so I'm not inclined to spend time reviewing the literature, but I'll try with the example closest at hand, the Mr. Money Mustache article on marketwatch that I linked to earlier; it starts out with stern words that brook no dissent and seem to imply that anyone who does other than the FIRE program is lazy and sad: 

"If you think there is even the slightest flaw with the ideas behind FIRE, you’re probably just not understanding it correctly. Because the whole reason for doing any of this is to lead the happiest, most satisfying life you can possibly lead.

"Sure, there are a few tricks behind the curtain — I’m going to make you occasionally tackle some moderately difficult stuff instead of the lazy, easy things you are accustomed to doing. But this too is a win, because a lazy life is a sad, depressed, unsatisfying life."

He goes on to cite $10-plus-tip glasses of wine as an "easy example" of money being squandered on "things that don't improve any of our lives."  He follows this with admonitions about the "fundamental truth in society" that "most people are pretty bad at math."  (A little later in the article, he brags about his brain having "a math side I can't turn off" which is "incredibly helpful.")

So, to me, the tone of the piece suggests that someone who, for example, enjoys expensive wine or restaurant meals is morally or intellectually deficient and in need of correction.

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Oh boy, I've been offline here for far too long and I am enjoying catching up! 

To answer a question fro whyme about the Camp FI conference, I did not find anyone puritanical. I can understand how the article from MMM calling out a $10 glass of wine might have led you to that thought but his point was taken. I have found just the opposite, where those in the FI mindset go above and beyond to not cast judgment on people's spending choices. It's all about spending money where you see value. I enjoy a $10 glass of wine (it was actually $11 on Fri night) but I will paint my own nails, thank you. 

I missed some very thoughtful conversations and I will certainly catching up. I am working hard on bringing in Next Generation Personal Finance lessons into my classes and conjuring up methods of teaching adults the same concepts. I even thought about starting a "club" for teachers at school, a personal finance club like a weight watchers club, of sorts. 

And to Tony's point about teaching PF to students with spreadsheets and envelopes - kudos to you! I'm sure you made up your own lessons and had such satisfaction doing so! I'll be doing a bit of that too because tactile learning is awesome. I have read some frustrations about trying to teach your son the same concepts and I am right there with you. Why strategies work for our students yet fall off from our own kids is inexplicable yet real.


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