Anybody who has been in this FI "game" for longer than a month knows the strategies. Decrease your expenses and increase your income without lifestyle creep. The more you can decrease your expenses the further your income will go. The more you can increase your income the more capital you can invest. It seems like basic FI abc's.
Of course decreasing expenses is the easier of the two to do, and what springboards most people through their first few months of paying of debt, then saving and investing capital. Increasing your income is, of course, quite valuable, however it's easier to cut out a latte every morning or cut out the cell phone than ask your boss for a raise.
A typical first worlder has three expenses that will take up most of his or her income transportation, food and housing. In transportation I include anything that goes into getting you from point A to point B. The includes the cost of the car, insurance, gas, parking, repairs, maintenance (nobody likes a dirty car!), tolls, etc. I have been lucky enough to not only cut transportation down to zero dollars a month, but actually have my main mode of transportation become an income producing asset!
Well I'm taking the sludge hammer to the expenses again and this time going after the biggest of the big baddies, rent. My story might not really be all that interesting on the surface, but it's what I've come away with that is the lesson. In face the story is just my GF and I moved to a cheaper place. That's it. I've cut my monthly rent from approximately $500/mo to around $310/mo. I'm a little bit farther from work and still getting used to the new area, but that's about it. Like I said, not all that interesting really.
What I find fascinating here however is how long it took me to make this move. I've been on the road to FI for almost two and half years now and only just recently decided to make this move. I lived at my old place for almost four years. Within those four years I never once hopped on the net and tried to look for a new place. I unconsciously just told myself "There is nothing better and you're in a great location! Besides your rent isn't that bad anyway."
I suppose that might have been true. Before moving my rent was about 15-20% of my paycheck. Not bad, but not that great. I was also close to friends, and not too far from lots of attractions. But then a friend of mine moved and I heard how much he'd be paying for a similar place to ours, and it got me thinking, "Why not just take a look?"
I did and found a place that now puts my at rent being less than 10% of my paycheck! That's a savings of almost $2400 a year! That's real money! To put it on other words I just wiped out my prefectural taxes. Or I just gave myself a 6-7% raise. To put a finer point on it had I moved here from day one I'd be more than $10,000 closer to FI once you include dividends and appreciation.
The realization that I had become complacent was not something that I wanted to admit, but there it was. The greatest realization however, I think, was now I'm looking for other areas of my life I've let slack. Food? Entertainment? Let's find out...
