If you're a normal person, you're probably thinking how the heck early retirement is going to be possible, let alone a good idea. Well, it's good you're here, because I'm about to tell you.
But, before we get there, I encourage you take a second and let go of any thoughts of the end of goal of early retirement being impossible. It may very well be, but if it's not, let's take a look at what getting there might look like.
How to Control What You Spend
Reading Luxury is Weakness is a great start that should put you ahead of most.
To figure out how to control what we spend, why don't we start by looking at how not to control what we spend.
Using money to buy things that make feeling happiness is an awesome guarantee of a late retirement. What happens when we base our happiness on external things is that we are never satisfied. The amount of money we need to sustain the same level of happiness keeps going as we adapt to each new level of happiness. This is called the Hedonic Treadmill.
Here are a couple core philosophies that will help you better control your spending:
1. Set and Forget the Basics
This means working hard to find the right size living area for you for the year, getting it as cheaply as possible, and not thinking about it again.
This means working to create the habit of a healthy diet, and shopping at Costco to get the food as cheaply as possible.
This means working to reduce telephone and internet bills once, at the start of the year, and then forgetting about them for the rest.
2. Limit Treats
Instead of enjoying alcohol and restaurants as much as you want, just place a dollar limit on it. $20, $50, $100/week, or whatever you want.
The goal is control, and just spending whenever we want isn't being in control.
3. Don't waste
If something is old and still works, keep using it.
If you can borrow something instead of having to buy it, borrow it.
Whenever brand-new consumption can be avoided, avoid it. Laziness is no excuse.
Bonus Tip: Track Your Spending
Because what gets measured gets managed.
For the past four years, I've tracked every dollar I've spent. Every time that I've been feeling out of control of my finances, I can get back in control by just looking at where my money's going. The facts are always accessible.
Mint works for some people, but I like tracking by recording every purchase in a notes app in my phone. Test things out to see what works for you.
For a reference of what minimal spending in the first world might look like, check this out.
Check out the other articles in this series