How We Decreased our Spending by $20,000 (While Increasing Our Fun by $10,000)

In order to achieve financial independence, you need to first understand what your annual expenses are. That’s how much money you need to live comfortably every year.

Your annual expenses can include things like housing, transportation, food, utility bills, entertainment, travel and the many other things that make your life … well, your life! 

For our family, I’ve found that number to range between $60,000 and $70,000 per year. That number is after taxes and it doesn’t include money for saving and investing. 

With lower annual expenses, it would definitely be a lot easier for our family to become financially independent.

If we’re using the 4% rule to calculate how much to save to become FI, then we’d need $1,500,000 – $1,750,000. Considering I have around $4,000 in a taxable brokerage account at 37 years old, that’s going to take quite a while!

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