In my five decades (yes, I’m that many years old), my parents have had an influence on me. They’ve never been shy about expressing their opinions and advice. And some of it, I’ve gladly taken. Other advice, not so much.
One thing that really stuck with me was a story they shared about a couple they went to high school with. The couple grew up similarly to my parents…living in a very small town in the Mid-Atlantic area by the water. Very middle class. In a lot of ways, nothing stood out about these spouses. Except for one action they took. For the first 10 years of their marriage, the couple decided to live on one of their salaries and invest the other. This paid off bigtime, and they became millionaires in their early 30s.
This story left quite an impression on me. I tried to replicate this when I was married, but the timing never quite worked. My ex and I were never on the same page at the same time to follow this approach.
Now, as I’ve been paying off debt and working toward becoming financially independent, I am trying to live off half of my gross salary. So how am I doing? Well, that depends on how you look at it.
Here are the numbers:
- Living on about $63,000/year (plus another $10,000 for college kids)
- Making more than double that in gross salary
- Saving $4,800/year
- Investing $8,750/year
Here are my thoughts…
I want to track and keep my cost of living to $63,000 or less. That gives me a number to work for regarding financial independence.
The $63,000 does not include what I’m paying for my college kids. I’m currently paying $10,000/year to help my twins, who are in college (tuition/room and board/insurance/etc.). I can’t pay half of everything. They’ll need to also rely on scholarships and loans (which I’m encouraging them to keep low).
I need to continue to crush my debt. My car loan (almost paid off), personal loan, and 401K loan combined are nearly $1,000/month. This has to be a priority.
This is a work in progress, and I feel good about the direction I’m going. I can build on this and strengthen my financial position.