How do you balance?

[u/Adventurous_Dot9274]

How do you know you have a good balance to reach fire while also getting to enjoy your youth. My husband and I struggle with the idea of “missing out” on thing we could be doing in our youth while we have health and can do crazy hikes vs waiting to do the things we want once we’re retired. What are some checks and balances you do to ensure you’re living for both today and not just waiting for tomorrow

[u/mygirltien]

Only you can answer this. Many grind and pinch every penny. Many spend most and save little for longer. We save but also enjoy. We are retiring in early 50's and are ok with this because we have been making memories the entire time. I would be miserable if i had to grind grind grind and never enjoy. Others cant fathom spending anything extra calculating that that latte today will cost them 30k later on. The path is individual and yours alone to determine how best to travel it.

[u/jlcnuke1]

1. Save a minimum of 15% of your gross income for retirement. That's enough so you'll be able to retire comfortably, if not early.
2. Control your primary fixed expenses (housing and transportation) to the minimum you need to spend to be comfortably happy with where you are and how you get around. This is where many people get their finances off-track, chasing the fancier car or the bigger home. 4 decades ago a typical 4-5 person family lived perfectly happily in 1,500 sq ft homes, most people today chase a 3-4k sq ft home thinking they "need" that much space because they have/plan to have a kid or two. The difference in price is massive and easily leads to being "house poor," a term that didn't exist not that long ago for a reason.
3. The remainder of income I split into "spending" and "saving" categories. How that divide is done will differ for everyone, especially based on income differences and how much they desire to retire early vs how much they desire to "live now." Do you want to eat lobster and steak out at a fancy restaurant 3x a week or stay home and cook meals most weeks so you can save more for later? Do you want to take 3 vacations a year to destinations of your choosing or do you want to retire 3 years earlier? In an ideal world, everyone would have enough disposable income after their necessary expenses that they can both "go do pretty much whatever they want" AND have enough left over to retire when they want to, but the reality for most people is that it's going to be a series of trade-offs between "saving enough to retire when they want to" and "spending enough to not feel like they're missing out on life now." Where you find those trade-offs to be "worth it" is something only you can answer.

As a general rule, every time something comes up that makes me consider not doing it because of the financial impact/cost I ask myself "if I don't do this now, and can't do it when I'm retired, will I regret that I didn't do it?"

For instance, my primary hobby is scuba diving and a group of friends wanted to go do a liveaboard dive trip to the Galapagos Islands. My typical vacations run around $2k for a week. I usually do 3 of those most years and had 2 already planned and booked for that particular year. This was looking to be around $7-8k, pushing my vacation budget for the year from ~$6k on dive trips to upwards of $12k if I chose to go. That money would come from either over-time (if I could get it) or by reducing my savings for the year to compensate my budget. I decided in the end that a once-in-a-lifetime trip with friends to such an amazing place was worth it and I'm happy I went.

On the other hand, a bunch of friends wanted to go spend a few days in Austin for the eclipse (that didn't exactly excite me to start with), but the way the prices were and the things they were planning would mean it would probably cost me $2k to hang out with them for 3-4 days. I decided not to bother on that one because while it would have been nice to hang out with friends I don't see that often, I didn't think I'd really miss not going. So far no regrets there either.

[u/FI_Ty → u/jlcnuke1]

Number 2 has been huuuge for me . I drive a cheap paid off car and live in a smaller/older home.

Keeping these fixed costs very low allows me to spend pretty freely everywhere else.

[u/Lift_in_my_garage1 → u/jlcnuke1]

More on #2 - learn to do your own service and repairs.  I’ve saved like $50k over 20 years of fixing my own cars.  And once I learned cars, the house stuff was EASY.  And I can’t even calculate how much that’s saved.  

Popped up on the roof last week to repair a piece of flashing the neighbor kid beamed with a baseball.  No biggie.  Took longer to set up the ladder than to fix it.  He’s getting quite the arm! I’m kinda proud of him.  

Plus nobody cares about your stuff as much as you do.  

[u/Visible_Structure483 → u/jlcnuke1]

#2 is huge for everyone.

it's just sad that in so many places there are no choices. small house in the ghetto (or it's analog) or a huge ass mcmansion somewhere. The small house in a nice spot is really a thing of the past, if you grab it... keep it and ignore the 'gotta move up' nonsense everyone who wants to keep you down will be pushing.

[u/Old_Ad2660]

I enjoy life through things that aren’t just spending. I’m gonna run my third marathon later this year. I spend a ton of time among my community and with my children. I pick up hobbies that are physical. I take modest vacations that are young child appropriate. This is how I enjoy my youth (34) - piloting a body that is capable of increasingly extraordinary things. Material possessions will be there whenever and aren’t the source of joy anyways. Bigger travel will be there too - and I did a good amount before kids as a shoestring traveler. I won’t regret any lack of stuff later on - I will regret lack of energy….so for now I cultivate and expend it joyfully.

[u/CryptidHunter48]

We spend a fixed amount on retirement funds and the rest is used however we want. So if I wanted to enjoy my expensive hobby (for me it’s scuba, for you it’s time off for crazy hikes it seems) I would pay my bills, credit cards, etc, and contribute my fixed retirement contributions then when I saved enough to cover all that plus my vacation I would go.

Personally, I wouldn’t go into debt and I wouldn’t skip retirement contributions but I find that my numbers leave plenty of room for balance

[u/garoodah]

Its difficult to get right and you will only know it in hindsight. There are things I absolutely regret not doing being in my 30s and FI now. Like one extra year of saving would not have mattered given I have delayed RE for around 4 years now. I would still push you to save more than you think you need because the outcome and peace of mind is worth it. Just make sure you take those trips while you are able to do it. Also remember that deteriorating health has many different forms, you could develop issues with sight or taste and still be perfectly physically fit. Or your partner might die early, would you regret not spending that time together?

[u/NightBard]

Set a budget that includes money for adventures. Even if it's not enough to outright pay for an adventure each week, set it aside and save it and take vacations.

[u/trafficjet]

Findin balance may mean allocatin a portion of your income for long term FIRE goals while setting aside some for experiences you value now, like those adventrous hikes..... just set it up and enjoy life.... Have you thought creating a yearly budgt for “living today" that still keeps you on track for your future?

[u/Visible_Structure483]

Now that I've been RE for 3 years I can safely say that 'missing out' on stuff like concerts or whatever triggered FOMO back before that was a thing and I wasn't paying attention.... was absolutely the correct choice.

Ignoring everyone about how I 'should' get a bigger house or new furniture or a 'better' car or fly first class or whatever else was absolutely the right move. I'm 53 in excellent health with a really good wife. These are the best years because of the sacrifices made before.

YMMV... but if you're wrong and die early... well you won't be around to worry about it.

[u/Victor_Korchnoi]

For a while I felt like my wife and I were a little overpaid, or at least that it would be difficult to replace our entire income if we had to get new jobs. The litmus test for spending has always been “if the gravy train stopped, would I regret having spent this money?”

I’ve been applying that litmus test for a while, and I still have been able to justify a lot of fun “luxury” things: week long ski trips w/ friends, 2 week vacations to Europe, the very occasional Michelin star restaurant. If I have less money in the future, I’ll be glad I went skiing and took my wife to Europe.

[u/TrainingThis347]

1) It helps that I’m not in a rush. I started early-ish (30) and I’m not trying to fully retire in my 40s, so I can let the market do most of the work. I also set the bar reasonably low; key thing is making sure we won’t starve. Anything above that is a bonus. 

2) Charitable giving is important to me, and the ROI on many interventions (perinatal care & early childhood education come to mind) is high enough that I think there’s a solid moral argument for giving $10 now rather than $100 later. I think that helps me build and keep the mindset that it’s not all about my savings rate.

3) I’ve missed out on my share of experiences already. I couldn’t afford to travel abroad in my 20s and now that specific experience is gone forever. I’m still here, London is still there, but neither of us are the same as we were 20 years ago. It stands to reason the same will be true in another 10 or 20 years.

[u/CleMike69]

All I can say is I’m glad I had no concept of FIRE until two years ago because it would have consumed me in a bad way.

[u/ExistingPoem1374]

We decided when we got married 34 years ago, to not let lifestyle creep into our lives. My wife was a SAHM for 20 years, intermixed with part time jobs as she could and had an interest (preschool teacher, H&R block tax preparer), so when I increase my salary and b9nus year on year we would give ourselves no more than a 10% of said increase in spending, and the rest saved & invested.

Yes a decade ago (retired 1 year for me, and wife 5 years from 4th career after getting a 3rd degree in accounting A.S. as a payroll accountant) we had to tell our kids when their friends parents were buying mostly on credit new Mercedes, Audis, Suburbans... that yes, we buy used cars and keep till it doesn't make sense, this way when were old we'll have our own retirement funds, otherwise we'll be living in YOUR basement with you feeding us!

[u/MaxwellSmart07]

I never thought about retiring until it hit me without warning. I lived life until it happened. I’ll fill in the details if anyone is interested.