While most people consider their mortgage as their largest monthly bill, for my husband Greg and me, it’s actually our retirement savings—$3,000 each month. It might sound a little crazy, but there are good reasons behind this decision, and we wouldn’t have it any other way.
A Simple Financial Picture
Our financial life is relatively straightforward, especially when you factor in self-employment and the occasional quarterly taxes. Each month, I create a zero-sum budget to track our expenses—housing, utilities, food, insurance, transportation, and the kids’ needs. Most months, these expenses total around $3,000. But then there’s that $3,000 I allocate to our retirement accounts, which comes straight from our business account.
It’s easy to overlook just how much this expense adds up, especially when you realize that it’s the same amount we spend on our entire living situation, including our mortgage. But saving for the future is crucial, and this regular transfer to our Vanguard accounts is a big part of why we’re so focused on early retirement.
Why We Prioritize Retirement Savings
- Tax Savings Are a Big Deal
Earning more over time has been incredibly rewarding, but it also means we pay more in taxes. To mitigate this, we save aggressively in tax-advantaged retirement accounts. By saving as much as we can, we reduce our taxable income, which directly lowers our tax burden. So, while it may feel painful to send $3,000 each month, the tax benefits make it worthwhile. - The Magic of Compound Interest
Compound interest is one of the most powerful tools in building wealth, and the earlier you start, the better. Although I didn’t prioritize saving in my younger years, Greg and I committed to serious retirement savings in our late 20s. Now, with each year that passes, we can watch our savings grow and compound on themselves. The more we save now, the more we’ll benefit down the road. - Early Retirement Is the Goal
Our ultimate goal is to retire—or at least semi-retire—while we’re still young enough to enjoy it. We’re not sure we’ll ever fully stop working, but we’d like to have the option to slow down and spend more time doing what we love, whether that’s traveling or pursuing passion projects. Our children are still young, so we have around 10-12 years before they head off to college, which means our early retirement plans are closer than we think. - We Don’t Want to Be a Burden
Saving for retirement isn’t just for us; it’s also for our kids. I want to ensure we never find ourselves in a position where we’re relying on our children financially. While we’re lucky that both of our parents are financially stable, I know many people who are supporting their parents in retirement. I refuse to put my kids in that position. If one of them becomes a billionaire, though, I’d be happy to accept their help (just kidding, of course!). - Investing in Our Future Selves
While it’s easy to focus on the immediate gratification of spending money on fun things, saving for retirement is ultimately about taking care of our future selves. As much as I enjoy my current lifestyle, I know that one day, I’ll be older and will no longer want to work. The thought of ignoring my retirement savings now and living only for the present is something that terrifies me. I know I’ll be grateful in the future for the sacrifices I made today.
Is It Hard? Yes. But Worth It.
There are plenty of ways I could easily spend $3,000 each month on things like vacations, a bigger house, or an upgraded car. Part of me dreams of that life of luxury, but we’re very aware of the long-term rewards that come with sticking to our retirement plan.
The truth is, it’s not always easy to stay disciplined with savings, but we know that, in the end, we’ll be glad we made the sacrifices now. It’s all about the bigger picture, and we’re willing to wait for the payoff.
How do you stay committed to your retirement goals? Do you ever wish you could spend that money on something else?
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