You Have Your Spending Under Control. What Now?

The path to financial independence is straightforward: spend far less than you earn, save the rest, and your investments will eventually be able to cover your annual expenses.

If you’ve been building a well-oiled FI machine for a while, you might feel like you need something new to aim for. When you stop living paycheck to paycheck, things slow down, and investing may become a little boring, as it should.

You were thrilled to learn that you don’t have to work until the age of 65. When you started down the FI path, you began to make better decisions. You reduced your spending because you recognized that these were necessary sacrifices to get ahead. Everything else is a luxury after you’ve covered your essential expenses like housing, food, and clothing.

The days of mindless spending are over.

Maybe you weren’t making wise financial decisions, but once you realized it, you made sure to cut these and other expenses to get out of debt and shine like a superstar.

You’re doing great financially

You’ve reached a point in your life where you’ve taken the necessary steps to control your spending. You now have a better understanding of what it takes to achieve financial independence. “How to Get Out of Debt” articles on the internet no longer pique your interest.

You have no debt! You make do with what you have.

There’s always room for improvement

You’re wondering if you can cut your expenses even further without sacrificing your way of life. I can assure you that there is always work to be done in the “Expense Accounting Department.” That is the small section of your household budget where you can work your magic to get ahead.

We always take a long-term view of life at home, and this extends to many financial aspects as well. We will pay a bill once a year rather than monthly to avoid being bothered by it on a monthly basis.


Because time is the most valuable currency we possess. I don’t want to see a bill 12 times a year when I can pay it once and be done. This gives you more time to think about other things. It clears our minds and prepares us for exercises like the ones below.

Analyze your previous spending

If you’re in this situation and don’t know where to cut further, here’s a tip: look at your expenses for the last 12 months. See what stands out to you.

Do you see any areas where you could improve?

If so, set a goal for the next 12 months to address these issues. Rinse and repeat once you’ve made improvements in those areas.

In our money management department, which we run like a business, I find that there is always room for improvement. Every fourth quarter, we begin estimating the budget for the following year. We look at the overall expense categories and select one or two to investigate.

One of our financial goals this year, for example, was to review the insurance coverage we had. After doing some research, we discovered that we could self-insure a few items and save over $500 on auto and rental property insurance coverage. When was the last time you reviewed your insurance policies?

Travel hacking is becoming a popular topic at the dinner table as we prepare to discuss our budget for next year, and it will most likely be our top priority to save money. We’re excited to see how much money we can save on that front.

We now have the luxury of taking a step back and looking at the big picture because we no longer have to worry about minor expenses because we live happily and far below our means. Getting here was not as difficult as I had anticipated, and understanding the value of time and its relationship to money was critical in our journey.

We don’t do shopping bans because we don’t shop for the sake of shopping. They are useless to us.

Do we want to be in an office working extra hours and postponing our FI date by spending on specific items?

The answer is simply “NO” if it does not add value to our lives. Knowing that material possessions do not bring us true happiness is our most effective weapon against consumerism.

You can do the same with your investments, setting investment goals for the coming year. This year, we began reviewing our asset allocation to ensure that we have the necessary diversification to retire in less than three years.

This is a higher level of thinking after you’ve progressed past the initial stages of pursuing financial independence.

Where are you on your FI journey?


After dedicating 13 years of his career to Vanguard, José retired from the corporate world at the young age of 44. During his tenure at Vanguard, he expertly coordinated the production of both electronic and print educational materials for 401(k) participants. Now, he relishes in his early retirement, cherishing time spent with his family, indulging in his favorite hobbies, seeking out new experiences, and savoring meals in the comfort of his own backyard.

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8 years ago

Constant inprovement is the key to staying a head. The day you stop challenging and revisiting all these things you are dead in the water! I appreciate your annual effort to laser focus on one category.

In a future article, I’d love to hear your thoughts on specific investments or accounts you are allocating with as a follow up to the asset allocation discussion.

8 years ago
Reply to  LM

Great comment. Yes indeed! It’s a continuous process.

Sure, we’d love to share our asset allocation in more details when the time is right. One key aspect has been understanding and having good reasonings behind your allocation decisions. If I can’t articulate to my significant other why I think one approach is better than the other or why we should allocate funds to an investment, then I’m just speculating and setting ourselves for failure.

Thanks for dropping by my friend.

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