The $80,000 Lifestyle Change | Joel from FI 180

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On today’s episode, Cody and Justin are joined by Joel from FI 180. It’s so inspiring to hear someone who had real spending issues and quickly got them under control. Joel wasn’t forced to in order to take on debt, he had a wake-up call in the form of a car crash involving his wife.

Unfortunately, sometimes it takes a potentially life-altering event to step back and reevaluate your life. Thankfully Joel’s wife is fine and they don’t miss their old spending ways.

The transition they made was remarkable. They were set for a life of working into their 70’s and quickly make changes that have allowed Joel to retire at 34 and his wife the option to do so whenever she chooses.

Well, go take a listen to today’s episode and let us hear what you think.

Episode Summary

  • Joel’s parents never made a lot of money ($35k per year)
  • Out of college though Joel started making ~$55k
  • Never having money before he just started blowing it all on crazy things like $3500 t.v.
  • His wife has always had more financial restraint
  • Joel simply didn’t know how to manage money because he had never had it but wasn’t in debt
  • Joel’s wife didn’t want to merge finances because of his spending habits
  • To combat his spending, he would just continue to work more
  • About 6 years ago after his wife got in a bad car wreck Joel made his “financial 180”
  • He states that he really doesn’t miss the spending since making his changes
  • That lavish spending just became normal and wasn’t fun anymore
  • Now with low spending, anything lavish really seems like a treat
  • Joel comments on how people don’t see from the outside how much strain the work it takes to live a lavish lifestyle can take on your life when you’re simply viewing a lavish lifestyle on Facebook/Instagram
  • In 2012 they spend $107,000
    • $16k shopping, $13k food, $12k travel, $12k bills, $11k cars, etc
  • Now they spend between $25k-30k per year
  • Their first big move on lowering expenses was going to a one car household
  • They continued their transition to lower spending by targeting one thing each month
  • It took them about three to four years to fully make their transition
  • Joel states that for them cooking for themselves was the hardest part of the transition
  • They cut cable, extra car insurance, water delivery, and home monitoring and other things included slowing internet speed, lowering cell phone data package
  • After one year they cut an additional $1,080 a month from their budget
  • By 2015 they lowered their spending to $34k per year
  • They actually went too far and got over 80% savings rate and decided that was the deprivation
  • Joel has stepped away from working but his wife enjoys work and continues to do so
  • We discuss how the retire early part of FIRE gets all the attention while the Financial Independent part is much more important
  • Joel is 34 and they are considering having children but aren’t sure
  • He talks about how not having a job doesn’t ensure you’ll be productive that it still has to be something you’re motivated to do
  • It took Joel a few months to build that structure that led to a proactive day
  • Joel even discusses feeling younger since retiring
  • We then talk about how Joel built up the confidence to quit his job
  • He came up with the quote that “His worst case scenario, is everyone else’s everyday scenario”
  • That means that if he needs to go back to work, so what, everyone else works, it’s not that scary
  • They also decided to pay their house off quicker to remove that fixed cost and make it a little less scary
  • We end the episode with Joel stressing finding a good work-life balance and not focusing so much on one particular number

Key Takeaways

  1. Having money can be a problem: Joel came out of college with decent pay and no major debt worries. Sounds good right? Well, he also wasn’t prepared for how to handle it. He wasn’t forced to learn frugal habits early on. While we may never feel sorry for someone in Joel’s position, it is a real thing to be cautious of.
  2. Don’t wait for your crash: A crash involving his wife led Joel to make these radical changes. Luckily everything turned out ok, but it is often too late to make changes after a major disaster. Build a life that is resilient to trauma and unforeseen struggles.
  3. You won’t miss the money: You may be really nervous about reducing your spending. Won’t it be painful? Take it from Joel, your spending becomes normal and unexciting. When you become more intentional, these treats are much more meaningful. Reducing your spending will actually add joy to your life.

Call to Action

Write out a 6 month calendar. Pick one subject area for each month. Reduce that spending or at least analyze it one month at a time and compare your end progress with where you started.

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Learn More About Your Hosts:

Fly to FI (Cody’s Blog)

Saving-Sherpa (Justin’s blog)