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For the first 5 months of this year I’ve only spent $6,863. If this trend continues I’ll end up spending a total of $16,400 for the whole year. Last year I spent $17,800, and because of COVID-19 this year seems to go even lower.
Heck, I might even go lower than $15,000! Fo that to happen I have to spend less than $1,162/month on average for the last 7 months.
I don’t think I want to put that out as a goal, because if the borders open again I really want to travel. What I really like is that my expenses continue to lower for every year, while my income continue to increase. This is a sure path to success.
I now feel confident to say that financial independence is no longer just a dream, it will become a reality within short time.
The day you discover that financial freedom is possible, you'll settle for nothing less.— Route 2 FI 📈 (@Route2FI) June 3, 2020
Let’s say that I’d only spent $15K this year, would I then lower my FI-number?
No, I feel that my FI-number ($500K is already low), so I can’t see any point in going any lower.
But wait, what about the future?
Will my spending continue to be so low?
Probably not due to:
-we’re getting kids one day
-new house in 2021 (a bigger house will probably cost more)
-buying an electric car. (We don’t have a car today).
So the spending in 2020 will be low, but the really interesting thing will be how 2021 develops.
How Much Money Will I Spend in 2021?
Let’s say that this year (2020) ends with $16,400 in expenses.
If 2021 will bring a kid, car and a new house, my best guess is that the calculation will be something like this:
2020 spending: $16,400
+ first kid: $5000/2 = $2,500
+ car per year: $3,000
+ increased house costs per year: $1,500
= 2021 per year: $23,400 (for me only).
Somehow I think my expenses will be lower, but we’ll see!
How much are you spending per year on kids and your car? Would love to hear from you!
Have questions, comments or suggestions? I would love to help you with your FI-journey.