Let’s hear it. What’s your early retirement goal? Want to retire 10 years from now? 15? If your goal is to retire early, you more than likely have a long-term financial plan. However, you’ll likely benefit from breaking that plan down into smaller chunks.
Someone smarter than me teaches a concept called backwards planning. You start with your long-term goal and then work on steps in near future that will help progress you towards your goal.
What does that look like in the FIRE Community?
My long-term goal is to have $1,250,000 invested by the age 40 in order to stop working. Six months ago my plan for achieving that mountain of a goal was simple. I would follow my three simple steps for financial success. Live below your means, save and invest the difference, and improve on steps one and two.
That’s great and all, but shouldn’t I have some goals that are quantifiable? Something actionable that I can look at and confirm: yes, I did what I set out to do this week, month, or year in order to get closer to financial independence?
Insert Military Dollar’s 2019 Financial Plan
As much as I like to consider myself a financial expert, I have to admit: Military Dollar saved me hundreds, if not thousands of dollars in the first half of 2019, and I expect to double that by the end of the year.
Around the middle of December last year, my wife started poking at me to fill out this financial planner. Naturally I fought it. I’m the lazy one. Gina pointed out that the plan was created by Airman Mildollar, a blogger and friend in the FIRE community who we look up to. Needless to say, that sparked my interest.
So, off we went filling out the 2019 Financial Plan from top to bottom.
We wrote in our intent for the 2019, which was to utilize the plan to keep us on track to increase our net worth by 50% by the end of the year (we have an actual dollar amount, but I won’t be sharing that today).
Next, we had to figure out how we would get there. We skipped down and filled out our savings goal for the year. Did some math and determined how much we’d need to save each month and if that was realistic. We were close.
In order to get to that monthly savings number, we utilized the Monthly Action Steps. Our personal Action Steps were small, but doable.
Over the first six months of 2019, we had three no-spend grocery weeks. Each time we did this we saved around $100. This also helped clear out some of the food that we managed to bury in the deepest depths of the cabinets. The no-spend weeks covered our Action Steps for January, March, and May.
February, April, & June Action Steps
In February we had two action steps, they really allowed us to crush our February budget.
- We funded our Valentine’s Day gifts and celebration solely from our monthly allotted spending money. This is money that was meant to be “blown” anyways, so we used it for V-day. This put around $150-200 extra into our investment account.
- Our second Action Step was to only spend a small amount of our tax return on two things that we had been saving for, and invest the rest. We needed to save a couple hundred dollars more to put a new roof on our house, and around $250 to purchase a set of Bowflex adjustable dumbbells for our home gym. So with this Action Step, we spent around $500 of our tax return and invested over $3,000 extra at the end of the month.
April is a crazy month for us. We have our wedding anniversary and loads of family birthdays. Therefore, our April Action Step was to stay within the budget. I can’t put a number on this one. We did it. For the first time. In five years. Thanks Military Dollar!
In June our Action Step was to revisit our monthly expenses and find out if anything could be lowered. So we chose to take a hard look at our car insurance.
After some research and phone calls, we changed from USAA to GEICO, saving 15% or more on our car insurance in just 15 minutes. Just kidding, sort of. We were able to save $56 a month by revisiting our monthly expenses and taking action on one of them. So easy a caveman could do it.
2019 July to December
In the next six months we have three more no-spend grocery weeks. We also have plans to revisit another monthly spending item, plan ahead for the holidays, and review our annual goals to make sure we’re on track.
That’s it. Too easy. We plan ahead to improve financially. Every. Single. Month. So that we can consistently take steps to reach our long-term goal. Is that a mission statement or what?
Well, what are you waiting for?
I wanted to write this article because Four Walls of FIRE is here to help. I’ve told you that you’ll improve financially if you follow along with this blog. So, here’s an Action Step for you to take. Today. Like.. Right now.
Head on over to Military Dollar’s “Create Your 2019 Financial Plan!” and grab the PDF that will drive you to financial success in 2019.
Let me know in the comments when you’ve downloaded it and please share your Action Steps to spark some ideas for everyone else. See you next time!