Don’t allocate spending in your budget with an eyedropper.
Financial Independence seemed pretty cut and dry. Save a bunch of money (25x annual spending) and set yourself free.
Sure saving money is more complicated than that statement makes it out to be. I spent years beating down debt and even more building a portfolio. My journey wasn’t fast.
Right before I hit that magic savings number, I hit a wall and needed to step away. I left a stressful job that paid well and set off on a mini-retirement or sabbatical.
I’ve learned a thing or two or four about money and Financial Independence in the eight months since I started this new journey of discovery. A trip that still has no established end date.
Budget your money; don’t become a frugal miser.
Our family lived many years on an anti-budget. In this lifestyle, we paid ourselves first, saving a significant portion of our income and then freely spending the rest.
I was worried about spending too much when our household income dropped by 70%, and I launched a ruthless budget campaign.
I trimmed the fat, identifying spending that brought no value. This was a good thing.
Then I took it too far — questioning every penny. Soon my partner felt that I was scrutinizing basic things and taking the joy out of spending.
We never stressed about spending before my sabbatical, and suddenly there seemed to be money stress that hadn’t existed since we had been battling debt many years before.
It only took a few months to realize this behavior was killing joy and unnecessary.
I continued to track our spending but stopped worrying about the little things. After six months, we were well within the safety rails of our annual spending goals.
As we’d done in years past, we spent within our means without strict governance.
If you have a budgeting method that works, it will likely continue to work when you take a sabbatical. Controlling your spending requires discipline, but you don’t have to be a miser to be successful.
Have fun. That’s one of the points of a sabbatical in the first place.
Your future money needs may not be as great as you thought.
When I left work, I was convinced I was short of my Financial Independence number by a razor-thin margin.
Months later, I realized that I was basing my number on the 4% Rule, which according to J.L. Collins, would be better referred to as the 4% Guidance.
There is nothing set in stone when it comes to the 4% Rule. When life and money circumstances change, we react. We do not just blindly continue to withdraw a set percentage.
Mr. Money Mustache recently wrote a compelling article about several of his friends who fell into the one more year trap. He put together examples of money drawdowns for several scenarios. The failure scenarios required extreme conditions and an unwillingness to make any changes to adapt to the environment.
2022 has been a shit year for stocks and inflation. Yet, I’m more confident that I don’t need to return to a high-paying job to make up the gap to hit my Financial Independence number.
I’m convinced my family and I can adapt our spending and money priorities as the world around us changes.
Finding your purpose is at least as important as hitting your money goals.
I knew for years that my purpose was not my career in Information Technology. There were parts of my job that I loved and parts that ate at my soul.
For years, I didn’t know what I wanted to do when I grew up. At 48, with 30 years of work experience, I still didn’t have an answer to that question.
I was grinding away in a job that paid well but didn’t connect with my unknown purpose.
In the first few months of my sabbatical, I purposely avoided starting something that required a commitment.
I had a feeling that I wanted to write and share the challenges of my financial journey to help others.
A gazillion people write about such things, and I was scared to try.
Fortunately, I found people like Cait Mack, who provide excellent advice.
I also had the privilege to read a pre-release copy of Jordan Grumet’s new book, Taking Stock A Hospice Doctor’s Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life. He details the importance of purpose, identity, and connections.
My struggles with purpose are not unique, and Jordan’s book helped me understand better how to use this sabbatical time to define my purpose.
We need a community to fuel our FIRE.
I’m a socially awkward person — always have been.
The pandemic and associated isolation has impacted my already limited social life. I worked from home when not traveling before taking a sabbatical. I rarely ventured out to meet new people.
In the last few months, I’ve prioritized stepping out into one of my most awkward spaces. I want to share my financial independence experiences with others, and that’s pretty hard to do when you are a shut-in.
I started by reaching out to Mr. 1500 Days, Carl Jenson. I had no expectations and struggled to build the courage to reach out. Carl and I met, and he introduced me to the Mustachian group. From there, I found Amberly Grant’s FinTalks series.
I’ve been exposed to other people on this Financial Independence journey for the first time. I learned a lot from reading blogs, books, tweets, etc.
But meeting people in this community is a game changer.
I’m still socially awkward, but I’m working on it.
Wrapping up
My mini-retirement/sabbatical has been an eye-opening experience. I’ve shed significant stress from my life and learned a few valuable lessons along the way.
- Some form of control over spending is important, but you do not have to revert to miserly ways.
- A Financial Independence number doesn’t have to be set in stone. You will need to be flexible and willing to adapt to the financial circumstances in the world surrounding you when you are in the spend-down phase.
- You have some work to do if you feel your purpose is to grind away and save money to hit FI. Purpose is essential in life after FI. Spend some time to find your purpose.
- A supportive community will help you on your FI journey. You will find people who are going through the same things as you and people who’ve already experienced your phase and can share wisdom.
Whether you call it a mini-retirement, sabbatical, gap year, or something else, a break from the grind can be a great way to gain clarity about yourself and money on a Financial Independence journey.
