I Retired at 33 By Tracking Every Dollar I Spent

“JM”, a new commenter on the blog, left a great comment asking about tracking spending and how that helps you get to Financial Independence.

“Do you track all your monthly spending, no matter how minute? Did this help get you to Financial Independence? And how?”  -JM

I wrote a detailed reply to JM but I wanted to elaborate a bit since expense tracking is so important.

The quick answer is yes, I did track all spending down to the dollar while working towards FI. And looking back, tracking everything I spent was pivotal to accelerating my journey to FI.

A quick note: I’m not talking about budgeting here. I never budgeted before I got to FIRE. I’m only talking about tracking spending. Knowing how much you spend each month broken down by specific expense categories.


Why Track Spending?

I hate wasting time on pointless tasks just because conventional wisdom says “hey, you gotta do this because it’s important”.  I view personal financial management as an overhead cost to living a good life and not something that’s intrinsically valuable in itself.

But tracking spending isn’t a waste of time at all. Here are four key reasons to track spending:

  1. When you know how much you spend each month you can plan your cash flow better.

2. Detailed expense tracking lets you focus on problem spending areas which can free up more funds for saving and investing.

3. Tracking expenses ensures transparency and discussion in couples’ finances

4. Knowing what you spend each year leads to better spending projections in retirement. That means a fine tuned portfolio target size.


Track Spending to Plan Cash Flow Better

After talking to dozens of people in my early retirement lifestyle consulting sessions, I realize that those who know how much they spend tend to be way ahead of the game and have a good handle on their general financial planning, even if they are missing a few details.

When you know what you’re spending you can identify the portion of your income that you DON’T routinely need and save it automatically.  If you aren’t maxing out your 401k or IRA, you might be able to afford it if you actually knew how much of your income was required for routine monthly expenses and how much could be devoted to savings goals.

Knowing what you spend can give the confidence to make other money moves, too. For example, refinancing from a 30 year mortgage to a 10 or 15 year mortgage to score significantly lower interest rates might be possible if you can accurately identify how much of a surplus you have each month in your cash flow.


Track Expenses to Eliminate Wasteful Spending

I’m not a fan of budgeting but rather a fan of looking at where you naturally spend your money. Then periodically reviewing actual spending results versus your values. If you’re spending $500 per month on dining out and you get a huge value out of dining out frequently, then by all means do what you love.

But if you find out you’re spending $500 per month dining out because you’re too lazy to go to the grocery store and occasionally cook things in your own kitchen, then perhaps that’s an area of spending where you want to trim the fat (so to speak). Staring at a $500 expense every month that could be $100 will hopefully lead to positive financial changes.

Tracking your spending lets you compare how much you spend in each category and evaluate the relative benefits you see in each category. You may find several hundred dollars per month in small expenses (coffees, convenience store impulse grabs, “treats”, membership fees to places and services you no longer patronize) that you don’t value very highly. Money is tight and you can’t afford to take a proper vacation. Novel idea: redirect the hundreds of dollars per month of small spending toward one or two vacations each year!

The point of expense tracking isn’t to identify all discretionary spending and cut those categories to zero. Instead, you look at the data and get to decide for yourself whether you’re spending money on what you value. Because what you value isn’t necessarily what I value and isn’t what any personal finance guru values. Don’t listen to them; listen to yourself and focus spending in areas that bring you the most value.

If after looking at your spending you notice some categories that don’t bring value at all then focus on decreasing spending in those areas. Divert the savings toward your investments and retirement accounts. Future you will thank current you.


Track Expenses to Ensure Transparency and Discussion in Couples’ Finances

For those married or in a relationship where you share finances, tracking spending keeps you honest. Discussion on spending choices and priorities will happen. This doesn’t mean you will agree on everything but at least the raw data will be there in front of you and open up discussion (and screaming and yelling??).

Detailing the best method to manage couples’ finances is beyond the scope of this article, but keeping track of what you spend as a couple is a key ingredient. Some adopt the “his/hers/ours” approach where each partner has their own funds and contributes to the common pot for their common expenses like groceries, house payment, and utilities.

It gets tricky if only one spouse is aiming and saving for financial independence. At a minimum, that spouse should track their own spending plus the joint spending pot of money to see where the money is going.

In our house, we had joint financial accounts for everything. I was in charge of managing those accounts and tracking spending. Discussion time usually happened once per quarter where we reviewed overall spending and areas of abnormally high spending.


Know What you Spend Now So You’ll Know What You Will Spend In Retirement (and Plan For It!)

If you’re planning on using some variation of the Four Percent Rule which says you need 25 times your expenses in retirement, then you need to determine what those expenses in retirement will be.

The best way to determine what you will spend in retirement is start with the baseline spending patterns you have right now. Add to that new expenses in retirement (taxes, health insurance, more leisure and travel) and subtract those expenses that will decline or go away (commuting expense, work wardrobe, lunches out with coworkers).

Before I started tracking my spending, I mistakenly thought I was spending more than I really was. When I tracked expenses accurately, that let me reduce my retirement savings target by several hundred thousand dollars.  A lower savings target equals retirement at an even earlier age!

To illustrate the big problem with poor expense tracking data, let’s look at an example. If you think you are spending $60,000 per year and want to continue that level of spending in retirement, then you need $60,000 x 25 = $1,500,000 to retire early using the 4% rule.

But whoops! You’re off by $10,000 and actually spend just $50,000 per year.  Suddenly your savings target declines to $1,250,000. That’s an instant $250,000 “savings” that comes from accurate spending data which means retirement is potentially several YEARS earlier.

In contrast, if you underestimate your current spending by $10,000, thinking you only spend $60,000 per year, then you have an even worse problem. If you actually need $70,000 per year in retirement and you only save $1,500,000 ($60,000 x 25) then you are a quarter of a million dollars short in your retirement savings! Time to work several more years or slash your spending.

You can’t determine your future spending without a detailed account of your current spending. So get to tracking!


How to Track Spending

We have explored the “why” of tracking spending. Now let’s switch course and look at the “how”.

It doesn’t really matter how you track spending. Just find a system that works for you and your lifestyle and do it! And do it fairly accurately. If you’re missing hundreds of dollars of spending every month, your spending data is better than nothing but not that valuable.

I tracked expenses for the first several years with a spreadsheet. At the end of each month I copy/pasted the transactions from my credit card statement and checking account into a spreadsheet. Then I categorized each transaction manually. The spreadsheet tallied each category of spending for me.

My spreadsheet had 24 categories:

1. House-Mortgage
2. House – repairs/maintenance (incl. appliances/repairs)
3. House – insurance/taxes
4. Utilities-Gas/Electric
5. Utilities-Water/Sewer/Trash
6. Utilities-Cable TV
7. Home Furnishings/Furniture
8. Communications – Phone/Cell Phone/Internet
9. Auto-maintenance/insurance/taxes/license/registration
10. Auto-gas/tolls
11. Medical/Dental
12. Clothing
13. Groceries/Household (Walmart, Target, Grocery Store)
14. Student Loan Payments
15. Education/Training/Prof Fees
16. Childcare/Afterschool care
17. Dining out
18. Entertainment/Toys/Fun (incl. ABC store)
19. Vacations
20. Electronics
21. Gifts
22. Charity
23. Misc.
24. Cash

The spreadsheet was a great solution for a money nerd like me that wanted to track everything in an infinitely customizable and detailed method.  The downside is it takes a good bit of time given the manual data manipulation required in the spreadsheet.

I don’t have a link to my spreadsheet because it’s fairly rudimentary and kind of a mess. I built it for me, not the masses! And maybe you don’t need 24 expense categories like I did.

I tracked my expenses in detail using the spreadsheet for about six years total. Around two years after retiring early, I realized I no longer needed to track every single dollar in exact detail. It was evident we were on track financially to spend within our $40,000 retirement budget and I could “fudge it” by ignoring the very few small cash transactions I conduct each year. Almost everything we spend goes on a credit card, so 99 point something percent of our spending data is already in electronic format.

How to streamline things and save time? Personal Capital was the answer for me (it’s free). Others use Mint or You Need a Budget with great success. I don’t have any experience with the latter two solutions so I’ll share what I know about Personal Capital (and you can see a more detailed review here).

In a nutshell, you link your accounts in Personal Capital and it downloads all your transactions from credit cards, debit cards, and checking accounts (including ATM withdrawals = a way to track cash expenses in granular form).  Personal Capital tracks all your investment accounts too.  You can access your expense tracking through a web-based interface or through an app on your phone or tablet. And hey, it’s free.


Example of a monthly spending report from Personal Capital


Instead of spending an hour doing my copy/paste/sort/classify/copy/paste dance in my expense tracking spreadsheet every month, I now spend about ten minutes poring over my data in Personal Capital.  It’s easy now. I read through a couple pages of transactions just to make sure they are categorized correctly by Personal Capital. 90% are correct. The other 10% I have to manually switch the category.

For example, Personal Capital thinks Walmart is groceries for me since that’s usually correct. But sometimes it’s primarily clothing or automotive or general household goods.

A couple of downsides with Personal Capital: there’s no way to enter a manual transaction, such as spending cash. I overcome this by classifying ATM withdrawals as whatever I generally spend the money on. I rarely spend cash other than when traveling. For this reason, ATM withdrawals are almost always categorized as “travel” in my record keeping.

The other downside to Personal Capital is the inability to split an expense into two or more categories. Going back to Walmart, I might spend $16 for a new pair of windshield wipers and a quart of motor oil, $9 on a new ten pack of socks, and $75 on groceries.  In my rush to spend as little time as possible micromanaging my money, the transaction becomes a $100 grocery purchase instead of $16 “automotive” / $9 “clothing” / $75 “groceries”.

This is close enough for my goal of tracking the total dollar amount that I spend each year, even if a little bit of detail is lost in the aggregation of the data. So my categorized data is somewhere around 95-99% correct at year end versus 99.9% correct if I use a spreadsheet. In other words, good enough for my purposes.  And it’s easy enough that I still devote the minimal amount of effort required to continue tracking expenses consistently for the past several years. I stopped updating the expense tracking spreadsheet a few years ago because it took too long.

But maybe you need something more accurate if you’re just starting out on the path to FI and want 100% accurate spending data.

If you are interested, you can join Personal Capital for free right now. Note: that’s an affiliate link and Personal Capital may compensate me if your account meets certain conditions.



Looking back at my path to Financial Independence, tracking every dollar I spent was critical.  I knew where my money was going and over time I squeaked out additional savings which led to an increasing savings rate in my last few years of working.

Tracking spending comes with four main benefits:

  1. Knowing how much you spend leads to better month to month cash flow management

2. Tracking spending by category identifies areas where you spend a lot of money and tells you where cutting costs will have the most impact

3. Tracking expenses ensures transparency and discussion in couples’ finances

4. Knowing how much you spend is key to developing an accurate forecast of retirement expenses (which is an intermediate step to calculating a retirement savings goal!)


Are you tracking expenses now?  How do you keep track of your spending?  Has it led to any cost-cutting in certain spending categories?



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  1. Great points, Justin – especially the difference between budgeting and tracking spending. I also use Personal Capital, and we’d used Mint beforehand.

    24 categories might seem like a lot, but any number can be helpful depending on how detailed one needs to be in order to be effective – that’s key. – Mike

    1. I think as few as 6 categories could work too (housing, transport, groceries, dining out, health, other) – all depends on what you want to get from the data!

  2. Well said! I’m banking on reduced spending come retirement since we will have more time to DIY most everything. You mentioned that some expenses went away and new ones appeared. Do you think you spend more or less after retirement?

    1. Depends on how you count “spending”. Our mortgage went away and our health care costs probably dropped overall (better plan now and it’s slightly cheaper on average). Commuting costs went away. Travel spending went WAY up. Groceries have dropped (better cheaper stores nearby and we have more free time to be more strategic and DIY more cooking) along with restaurants.

      Our “core” spending was about $22k/yr before retirement and is probably about the same now, except we have more discretionary spending and explicitly count health insurance and taxes as “expenses”.

  3. I don’t track spending. I know it would be easy to use something like Personal Capital for it (I’m using it anyway), but I never seem to have all the right credit cards set-up in there. It’s a little work when you cycle through deals and the best rewards.

    Instead, I focus my spending on things that are smart or that I can control. At our stage of life, 70% of expenses are education and mortgage, which are both as optimized as we can make them. These are also expenses that will go away at some point in retirement, so they don’t fit the rule of 4% calculation.

    In the end, I think we have a lot of non-standard, active duty finance stuff going on that even stuff that seems to make sense like this doesn’t add a lot of value to what I already know.

    1. Hmmm interesting! I would have guessed that you were an expense tracker. You’re right about cycling those credit cards, though most of my cards for the past several years have been Chase, Amex, CapOne, and Barclay and those logins are already active at PC, so I usually don’t have to do anything to add a new account 🙂

  4. Justin you and I must have had the same mother. You’ve described to a T what my process has been, with the caveat that I have not migrated over to Personal Capital or a similar tool. I cherish my SS too much:) I also have numerous pages to my SS that cover other financial items, like future portfolio projections, taxes, home cost basis, detailed current investments, with their current value and the resulting AA vs my target AA’s. The list is endless and is my thing. It actually doesn’t take that long for me each month to update.

    I agree that it has been crucial to our reaching and maintaining FI status.

  5. I love the scientific calculator cameo in the opening pic! I used that same one during engineering school. I sold it on eBay when I realized reverse Polish notation was overkill for household budgeting. I kind of miss it now, though.

  6. We swear by Mint. I like Personal Capital for the investment side, but for tracking day to day spending Mint is hard to beat. You -can- put in manual transactions and split transactions, too. We count 99.9% of our spending there, and it’s been a big help in figuring out our FIRE status. It’s also always eye opening – you’ll spend more money than you thought in some areas and less in others.

    I think if you want to reach a goal it’s critical to measure the metrics involved. If you want to stop working and let your investments pay your expenses, you NEED to know what all those numbers actually are!

  7. great post. we’re on the path and hate budgeting but love tracking! incidentally, my wife and I use a modified ours/his/hers approach. this is especially useful to us since we make different salaries. basically ALL money goes into a shared household account and ALL REQUIRED household spending is paid by this account (mortgage, utilities, groceries, etc.). This prevents us from discussions on how to split bills fairly. Equal split?? salary proportional split??

    and this next part is key: each month we auto-fund a series of separate accounts from this shared household account: Vacation Fund, Her discretionary Fund, His discretionary fund, special projects fund, etc. We end up joking and getting excited about our self-imposed monthly “pay day”. we started low with the discretionary and had to tweak it a few times to find our sweet spot so we weren’t wasteful with the money but didn’t feel impoverished. these modest discretionary accounts eliminated any tension or resentment if I splurge on a nice bottle of whiskey or she gets a random pedicure! if something expected comes up (but still discretionary) or we need a little more discretionary one month, we both have to agree and approve any overages. huge, HUGE, help with this happy journey!

    I’m sharing this in hopes that it could help someone else prevent couple $ disputes! good luck everyone!

  8. I track all of my expenses in a custom built excel file. If you stay on top of it (meaning update at least every few days), it’s pretty easy. Particularly if you use credit cards for most spend (for sign up bonuses and such), it’s easy to reconcile when you get your monthly statement.

    1. That’s how I did it for a long time. Somewhere around $1.5 million net worth I figured I have “enough” and decided the few minutes here and there throughout the month plus 30-60 minutes at month end was more than I wanted to devote to a manual spreadsheet. 🙂

  9. PC is ridiculous.. They couldn’t solve my login n sync issues (I told them the symptoms) for two months.. Deleted my account

  10. Yes I tend to track spending too – even in my head when I’m only swiping. $15.69? OK, then I spent $20 in my head. We don’t really track for the sake of budgeting either (although I think it’s fun – like did we miss the target? Oooof better luck next time!).

    24 categories?! I think we have 12-13. But we also don’t have kids to wrangle haha.

    1. I’m not sure where the 24 categories came from. I guess I wanted enough granularity so I could see trends in specific subcategories. Also wanted to be able to break out the cost of various parts of housing separate from the mortgage (which I knew would go away eventually once FIREd). Today I only use the default categories set up in Personal Capital so all my utility subaccounts are simply “utilities” which is all I need to know at the big picture level I’m looking at these days.

  11. Hear, hear! I found myself nodding right along on so many of these points. After we got a proper travel rewards card and our first annual summary report became available, it really opened my eyes to what we were spending. We immediately refinanced ($170 more per month, our interest rate dropped nearly two points, and we shaved ten years off the life of the loan), we started maxing out retirement accounts, and I calculated fifteen years to FI. A full-time telecommute opportunity arose six months later; now it’s a bit more than twelve years to FI and everything’s going swimmingly. And now that we’re tracking it better, we spend about $5k less per year on the credit cards.

    A bit of structure, a bit of foresight, and suddenly we’re living life on our own terms. Even biweekly $15 weekend coffee shop splurges to talk couple-y household finance are well worth it.

    1. Wow – $15 coffee shop visit? I assume you’re getting some sweet pastries and coffee too? Please tell me they haven’t invented a $7.50 coffee while I’ve been living in a cave. 😉

      1. Hah! Yes. It’s on the pricey side, but we come away with a couple of fancy pastries and a couple of fancy drinks for that kinda loot. A regular cup of joe (roasted on premises; still highfalutin) is $2.50, which is what I buy on the rare occasion I feel like telecommuting around people instead of just at home with my dog.

        1. Ok, that’s not bad at all. I occasionally go to Starbucks and the plain brew is a bit over $2 there with specialty drinks all $4-5. $15 for your coffee shop visit is still cheaper than most sit down restaurants and you get to enjoy the same ambiance of a nice place outside of home.

      2. I was thinking the same thing. That’s so expensive coffee beans. But in terms of spending, once I started tracking everything became clear. I was saving $50 a month, then slowly started saving over $13k a year. I now track every dollar. Tracking expenses and automating savings are key.

        Thanks for sharing.

  12. I just joined finances with my partner and we are working on finding the right balance between auto tracking and excel. I’ve also moved to more auto tracking, using mint at the moment, because of the time savings when handling ~12 accounts.

    PC is good but we are in the need to budget stage and mint seems to be the way to go. I also like YNAB but my partner wanted to try a free solution for a few months.

    1. Good to hear Mint is working for you. If budgeting is what you need then that’s probably a good bet to start with (if free is what you’re looking for 🙂 ).

      1. Not exactly. The big change was when I did a “no spend November” and tracked every single penny as it happened. The biggest spender was definitely our food budget (both restaurants & groceries), but also a lot of little Amazon type purchases as well. By forcing myself to write them down as they were spent, and trying for as many zero spend days as possible, I really figured out where the leaks were, and just didn’t spend that money. That first month I had to triple check that we’d paid our mortgage because there was so much left over after paying our credit cards in full.

        1. Yes – that will do it. Facing up to the fact that a whole bunch of small “insignificant” purchases add up to big dollars by month end. Painful to see all of that summarized in one spot and realizing those could be shares of investments earning more money for you instead of more trinkets cluttering your home or a dinner out that you chose to consume instead of spending a bit of time cooking!

  13. Heck yeah! I’ve always tracked my spending and made sure I was saving a good amount. I never allocate specific dollar amounts to a category (aka budgeting), but I understand how much I’ve spent in each category.

    I did this long before I reached FI, and I think it was a huge factor in knowing when I reached financial independence. I did it all in a spreadsheet too!

  14. I track every dollar, just like you! It allows me to identify spending “slippage” month-to-month. Also helps me keep accountable.

  15. I never tracked all expenses on a monthly basis when I was working; since I was maximizing all savings vehicles and more I knew we were in good shape (for the purpose of this exercise my wife is not included; she had always had her own accounts which I do not take into consideration, basically giving us even more than I use). But I have taken an interest in keeping track since retiring, albeit on only a yearly basis. I just use a manual spreadsheet that I printed off from Vanguard that captures most line items; those it doesn’t I put into whichever bucket makes the most sense. If nothing else it clarifies that we are in pretty good shape.

    For example, I always felt we would be in the same place as most Americans and need about $60K per year. But since I am aggressively cutting down on certain expenses (DirecTV Now over satellite TV as an example) that amount is being reduced, or at the least replaced by things we find more enjoyable (a cruise in 2019 as an example). And that $60K includes both a HELOC which I will be paying off over the next two years and a 0% motorcycle loan that will be done in about the same timeframe. Those two will lower our yearly expenses considerably. Now factor in SS which I started taking at 63 and the required % needed to maintain our lifestyle from savings is less than 2%. But without having a reasonable idea of our spending versus liquid assets I would never have the confidence that I do now that we are actually in full retirement mode.

    Great article, Justin. I hope more and more people take your recommendation to heart.

    1. The yearly total is what I’m more concerned about now. We have so many ups and downs month to month with the prepaying / gift card strategies plus all the lumpy expenses and big things like 1-2 month trips overseas. As long as I’m hitting those annual spending targets I’m good with the FI plan 🙂

  16. I’ve been a YNAB user for over a year. It took a month to get out of the “budgeting” mentality.
    It handles split transactions like your walmart example well.
    It also comes with education which is invaluable.

    1. Do you use the transaction splitting function all the time or is it dependent on the situation? Like if something is 95% one category do you let the other 5% of it slip into the category of the main 95% expense? I’d probably get lazy and do that 🙂

  17. Yes, I have been tracking my spending (and net worth and financial goals) via custom Excel spreadsheet since 2015. It has made a huge difference in my financial planning. I have been able to make changes to unnecessary spending and stay focused on my goals.

    Thank you for your great blog. It has made a positive influence on how I view my finances.

  18. I was pretty half-assed with my tracking until I found out about FI, then the categories got a lot more specific. It also became a lot more fun–when I had a goal to strive towards.

    And I’m with you on the spreadsheet tracking–I used using apps like Wallet to do it as we travel, but I found the spreadsheet is so much better and gives you more control.

  19. I’ve been tracking my expenses for the last 4+ years via spreadsheet (only recently signed up for PC), but not with any FI plan in mind when I started. Ever since discovering FI and realizing that it’s a real possibility, I’m glad I have done so. When I actually started making a monthly budget, it helped tremendously to be able to average out expenses to come up with realistic estimates. It also has helped me realize how much I was actually spending in various areas and once I started adding in the wife’s spending as well, what an eye opener. Decent salaries mean nothing if you’re not mindful of your spending.

  20. One thing I’ve done right is essentially tracking all my expenses since graduating college. Now the other thing that needs to happen is implementing those changes when you see expenses rising! 🙂 For a while I saw I was spending more, but didn’t really care as I’d heard that it was “natural” that you spend more as you get older so I had just figured that was how it worked for everyone. This was all before coming across FIRE of course!

    1. At least you knew the spending creep was happening. Most people spend all their paycheck and don’t consciously recognize that they are spending more (even though they get pay raises over the years!).

  21. That’s the first step toward financial independence. Tracking your expense helps a ton and I still do it every month. I use Excel. It takes a few hours every month, but it’s worth it. Our expense is holding steady for the most part.

    1. Whatever works! I’m in “spend down” mode now and since we tend to spend less than we can per the 4% rule, I’m less worried about optimizing every penny. Hence the switch to easier but slightly less accurate PC instead of a spreadsheet.

  22. The hubby and I just started our journey towards FI. It’s gonna be a long one, but tracking our expenses really helped me see areas where we spend too much (one month we spent 200 on eating out… :/) and where I think we’re spending more than we are. We now have our categories down to a monthly average that we fit into pretty well. It’s been a really nice tool. And Personal Capital is the best!

  23. Great article, and similar to how we track our spending.

    One problem I have when trying to determine our ‘number’: my wife is a teacher and can expect a pretty hefty pension – somewhere between 60-80% of her salary starting when she turns 60. I will have a much smaller pension kicking in a few years later – closer to 20% of my salary. So the “25x spending” rule doesn’t strictly work, because we’ll have 5-10 years where we need to fund 100% of our living with our investments, then a few years where we’ll need 50% of our spending, then down to roughly 25%.

    So I know that on the day my wife retires, we need much less than 25x our spending, but how much less? I haven’t found an easy way to calculate this, and I’d hate to work years longer because I can’t find a clean way to do the math. This is a good problem to have, I have to admit, but still something I struggle with.

  24. While this is a great “feel good” story. Though I can’t see how this doesn’t end with you and your wife working at Walmart when you are in your 60’s. I would assume you are invested in fairly aggressive investments to generate the returns you are going to need to continue to stay retired. So what happens to this money when the inevitable market correction comes and it wipes out a nice chunk of it? You can’t offset it by investing at these depressed values because you have no income to invest. You have 3 children. I hope that they all enjoy hanging out at the house and heaven forbid any of them gets involved in competive sports ( goodbye budget). Since you did not work very long social security won’t help you much, if at all when you can start drawing on it. I am confused as to why you would leave your job anyway other than being a selfish individual who does not understand what it means to be an adult. You talk about how you wanted to spend time with your family, but article says you were an engineering manager, so I assume you were not traveling 70% of the time if at all. You were most likely home everyday by 6pm. As a Father of three teenagers myself, all I can say is good luck to you sir.

    1. James. Nothing personal against you but your post is dripping with envy and resentment. I can assure you that he ain’t gonna end up working at Wal Mart. What happens if the market crashes by 50%? If you look at their current spending (~$40k) it takes a $1million portfolio to generate that level of income. They would still be on track in that scenario. That still doesn’t factor in adjustments like curtailed spending or finding side gigs which many early retirees (myself included) love to do. The secret sauce is to control spending which they have done. It’s a fascinating and fabulous example of what can be achieved in the American system… Ignore the articles we normally see plastered all over our press thatba “middle class life” is “unattainable” or costs “$130k”. What utter tripe.

      1. Well as long as you can assure me he will be good to go then I am sold. Haha
        No one can predict what the future holds, one can only plan. I am in my late 40’s and have never once woken up and wished I was retired. (I like my toys to much) You mention a 1 million dollar portfolio to generate 40k. It is great if one has a million dollar portfolio. At 65 that may take you through retirement. At 33 WITH a young family, a million dollars is nothing! It may work out well for him, but the chances that either he or his wife, heck maybe both, will be rejoining the work force in the future is pretty good.

        1. James, may I suggest you read more of Justin’s blog entries, since you seem to have missed the overall picture of he and his family. Currently their expenses are running well under the income generated from his side hustles and dividends. They are masters at finding the best deals, and are very frugal in their spending habits. In addition both Justin and his wife have said that if a worst case scenario occurs they will go back to some sort of work, part-time most likely, to carry them over until the better times return. With their backgrounds and educations that will not be difficult to do, I am sure.

          Lastly, I am aware of many people who have less than Justin’s family yet are doing very well on their own, so it can be done. And before you think I am in the same boat of ultra-early retirement, I did not check out until age 60, which was earlier than I had expected. Yes, I liked my toys and I liked investing more and more $, but I realized at 60 that we had “enough”. In actuality I could have checked out earlier, and in hindsight I wish I did. No regrets in the least for being in retirement at age 64; my only regret is that I did not pull the trigger earlier. I believe you will hit the same wall at some time in the not too distant future, and hope that occurs while you can still enjoy those toys, as my wife and I do. Best of luck, my friend.

          1. The main problem is that you assume that you know what the future holds. My whole point is enforced by your comment about their skills. They both have the potential to be high income earners so why waste that opportunity while they are able? You assume that they would be able to return to work if need be. Well, what if a major health issue happens to one of them or both, knocking out their ability to go back to work? Life can be cruel and very unpredictable and in my opinion I find it very selfish to put your family into a possible very dire financial situation just because you don’t want to work anymore. You know what they say about best laid plans. I wish them all the best, we just have a very differing opinion.

            1. As someone who does have major health issues, I can tell you that if Justin or someone in his family were to become ill, he and his wife would be even happier (if possible) that they had the smarts and perseverance to do this. They are living a family centered, curious, world traveling life. Hard to see how they would have any regret.
              If my husband had been able to retire at 33 (10 years before I got ill), I am 99.9% sure I would have fewer regrets now.
              I think that you should book a consultation with Justin. Maybe he can get your head up where it belongs – looking positively toward the future and out of the orifice it is currently stuck in. Dude, that can’t be comfortable.

            2. LOL – it’s unlikely the consulting session would be money well spent for James. Free consulting advice: James, save your consulting fee in a low cost index fund and knock a day off your potential early retirement date 🙂 Never know when you’ll want to quit work due to your desires or external factors beyond your control like health or bad economy.

      2. That’s a good way to look at it. We would have to fall pretty hard before we would be forced to take $12/hr greeter jobs at walmart (which would more than cover our the bills, by the way!!). And as it is, I’m making $125/hr on a very very part time basis which I could try to ramp up should I need more funds.

  25. I enjoyed reading that you retired at the age of 33 and you had another child. I recently retired at age 51. I am about a year into it and I still worry about money. I retired with $2.7 million in cash ( about $1.5 million is clear of taxes, the balance in 401K), I have free healthcare from my company until I turn 65, I own my home and car, and I have no debt. I am single, and I have no children. I guess I worry about future inflation, and the fact that I might live another 40+ years. I have a small pension of $2,000 a month indexed for inflation. Any thoughts? David M, California.

    1. If all of your 2.7 million is actually held in cash accounts, I’d be worrying about inflation, too! Long term, stocks do pretty well keeping up with inflation and growing in real terms.

  26. Do you recommend investing some money or paying all debt first before you start investing? I have credit cards, student and equity loan.

    1. Generally, it’s good to get your 401k match if you qualify for one. Then pay down the most expensive debt like credit cards. If the student loan and equity loan are around 4% or less, you might be best off investing more instead of paying down that debt aggressively.

  27. Have you ever consider a scenario where the 4% rule won’t apply anymore and how would you plan for that if you following exactly this rule, not a cent more nor planning to add a cent more (not your case but mine)

    1. 4% rule is really more of a planning tool for getting to early retirement and financial independence. You can spend 4% of your savings each year which is the same as saying you need 25x your expenses. When it comes down to actually spending your money in retirement, you can (and should!) adjust the amount each year based on how your investments are doing. Especially if your portfolio drops quite a bit, it makes sense to tighten up your spending.

      If the 4% rule is totally busted then I’ll personally try to reduce spending. If I can’t survive comfortably on what I have, then I’ll make more money including going back to FT or PT work!

  28. Budgeting and tracking spending are two entirely different things. We are always told we need a budgets, and I do have a budged. But I don’t follow it sticky. I think there is much more to learn from tracking spending than setting up a budget.

    1. That’s how we operate too. We have a general “not to exceed” spending goal and specific categories of spending, but as long as my annual year to date spending is in line with my annual spending target I don’t really care where the money goes.

  29. Hi Justin,
    Excellent article , tracking expenses is very critical for any normal business or any project planning, although I have been always frugal, I have managed to reduce my spending by 20% since I started tracking the detail of my monthly spending since 2015.

  30. Great article on the importance of tracking your spending. As you mentioned, I think a big benefit to tracking your spending down to the dollar is that you can identify and eliminate wasteful spending.

    While our busy schedules it is all too easy to get into a habit of eating out instead of cooking at home and saving extra money.

    Thanks again for the great article.

  31. We’ve used YNAB for almost 7 years now (and still use YNAB4), for both budgeting and tracking. We start the month with a goal and change it as needs change. But, I could tell you down to the penny our average expenditures over the last year. That’s the number we’re using for our FI calculations (rounded up and inflated a bit!) YNAB isn’t great with investments, and I also use Personal Capital for that part, along with multiple spreadsheets for various other purposes.

    Tracking is so important, and for us, so was the mindset of YNAB’s four rules to get to a place where we could save so much of our income.

  32. Hey Justin! I just found your blog after listening to the latest Choose FI podcast. Really interested to begin digging through your articles. I immediately resonated with your story as I also have a goal of being a retiree by the age of 33. I just started my own Instagram to track my progress
    IG: YoungRetireeBy33

    I am 26 years old and I recently started down this path after finding Bigger Pockets about a year and a half ago. I currently house hack and live for just paying the utilities and HOA, I have been able to over double my income in the last three years at work to be making around $170k total comp, and I am well on my journey to financial independence. This is one topic that I just recently started doing in my journey. In my current job I travel a lot (which I selfishly kinda like) which means that whenever I am traveling, I am eating on my companies budget. This is AWESOME!!! I also put all of my expenses on my personal credit card so I have started doing some of the travel hacking and just finished up my first Chase card!

    From a saving perspective I have done the following:
    1.) Maxed out my 401k
    2.) Opened a Traditional IRA and maxed it out
    3.) Put all of my rental income ($1800/month) into a Vanguard account purchasing VTSAX
    4.) Put $650 bi-weekly into a Vanguard account purchasing VTSAX

    Do you have any other tips that I have not yet completed?

    1. Congrats on getting to where you are!

      I don’t have any extra tips on what you’re doing. Sounds like you have a great set up. Just keep maxing out your accounts as your income goes up!

  33. Tracking expenses only goes so far income matters just as much. If you were able to save up 1.5 million in 10 years means a decent 6 figure income. Curious at what job/career you choose to earn that kind of money so young. Of course earning that kind of money means nothing if you don’t have a huge savings rate. Something Sam over at financial samurai wrote a great post on (going broke on 500 grand a year – comments are priceless on that one)


      1. Ah yes I remember now, read your article a few years back. I re-read it and what I liked was the fact you were able to do this on an “average” income. I follow a few Canadian bloggers and even in a high cost high tax country it’s possible to do raise a family on what is considered a “poverty” wage. I have several family members who’ve done it themselves

        Anyways keep up the good work

        T minus 3 years and 10 months till the wife is done!

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