How We Deflated Our Lifestyle So We Could Retire Early

Updated : Sep 02, 2019 in Articles

How We Deflated Our Lifestyle So We Could Retire Early


hey it’s Tim and it’s amy from go with
less. welcome to our channel! we’re bringing you another early retirement
video today. they seem to have done really well and people say they’ve
received a lot of inspiration from them which is amazing and we really
appreciate those nice comments and that you’re watching. so if people are looking
for early retirement education and inspiration we’re happy to do that. we’ve
been retired for the past four years and we’re gonna talk about another topic
today. today we’re gonna be talking about how we deflated our lifestyle. we’re
gonna be talking about lifestyle deflation and how that impacted our life
so that we can retire early. yeah we come out with a new video each Wednesday so
we hope that you will subscribe over here in the corner and with that let’s
get started. we’re gonna start out today by defining
two terms. the first of those is lifestyle deflation and the second of
those is lifestyle inflation. actually we’re gonna start with lifestyle
inflation probably because, if you’re interested in early retirement, you’ve
probably heard this term lifestyle inflation. and what that is is as you
earn more money you tend to spend more money. you buy a bigger house. you buy a
bigger car. you start having somebody mow your lawn. so your expenses rise in kind
as you have more income. so that’s lifestyle inflation. I haven’t really
heard lifestyle deflation. maybe it’s out there but I think the Tim coined this.
but it’s just the exact opposite and that is taking your life and expenses
down in terms of how much it costs to live your life now. most people don’t do
that unless they’re forced to do it and that makes what we’re doing kind of a
hard sell. because most people want their creature comforts that they’ve worked
hard and have earned and we get that because we did that. but we are here to
talk about how we deflated our lifestyle and why you might want to think about
that too. something that Amy and I saw regularly about retirement spending is
that you will need to have at least as much money as you’re currently spending
in your working life when you’re retired, potentially more if you have hobbies or
travel or you’re going to do things they’re gonna cost a lot of money. when
Tim and I were originally planning to retire, we were at a spending level of
a hundred and fifteen thousand dollars. so we looked at a hundred and fifteen
thousand dollars as the amount that we’re going to need in our retirement.
and that was where we kind of started planning. that’s an enormous amount of
money – a hundred and fifteen thousand dollars – and when you looked at how much
we needed it was close to three million dollars. we weren’t anywhere close to
that and it only came from changing things in our life drastically
and we’re gonna talk about what we did so that we didn’t have to wait so long
and we didn’t have to have anywhere near three million dollars in the bank. far
and away the largest thing that we had in terms of deflating our lifestyle was
getting rid of our big house. we had a giant house – close to 6000 square feet – so
everything…it wasn’t just the mortgage that we had on that house. but it was
everything that it took – the taxes. it was the insurance. it was the care of the
house, the maintenance of the house, the furnishing of the house, utilities – all these things made for a huge reduction whenever we
were able to deflate our life and move into our smaller space. I’m gonna talk a
little bit about that smaller space. we moved into our rental property. we had a
townhome that we rented out to one woman for five, six, seven years solid. one woman
and it was a great size for one person. well, the three of us moved in here. it’s
a two-bedroom two-bath and it is the exact right size for three people which
is really nice. right behind us, this is our only table. this is our
kitchen table, it’s our dining room table, it’s our studio.
it’s our studio. every time we do a video, we have to clear off the whole table and
set everything up so that we could have something clean and tidy in the
background and that’s our kitchen table. in our big house we had three separate
dining areas (and that’s indoors – there’s also outdoor patio
seating). so there were all these different spaces. how many places do you
need to sit down and eat dinner? turns out there’s only one table that we
needed and we were really happy to have all the less stress and all that that
came with that big house by moving into a smaller space and it plummeted our
spending big time. the next place where we cut out a lot of spending is with
cars. so when we moved out of our big house we had three cars at the time. we
got rid of our biggest most gas guzzling car at the time and just two days ago
we got rid of one of our other cars. so now we’re left with one car. so just like
with a home, a car comes with insurance and a lot of other expenses that we were
able to get rid of. yeah so we owned the cars outright we didn’t have car
payments but we had maintenance and all kinds of expenses with a car and just
the hassle of this car depreciating. now the two of us are together, like, 95% of
our time early retired which works great for us. I don’t think it would work for a
lot of people. it works fantastic for us. but we are apart 5% of our life and
now we have one car in a mega-suburb that has extremely poor public
transportation. the two of us love public transportation. we can’t wait to get to
an all public transportation life but we’re not there yet.
so, for now, we’re in suburbia. and the way we look at it is the times that we both
need a car – maybe we have events or, I don’t know, appointments or something
like that – that we both need to be in a car in a separate place, either we get a
ride, we use an uber or something like that. so, we’ve determined that it would
be cheaper to pay little bits every now and then than to have the maintenance
and upkeep of a second car. so the car’s out the window and now we’re left with
one car. lifestyle deflation comes with this negative connotation. specifically
the lifestyle part of this. it makes it sound like somehow our life is going to
be “less than” if we spend less money. so we’re here to say that our new deflated
lifestyle is more full than our big spending lifestyle ever was, our really
inflated lifestyle. so the the fact that we were able to reduce all this spending
hasn’t reduced our quality of life in any way shape or form. I’m gonna share a
little story about a friend of mine and a conversation we had just this week
that really hits this home. the friend is getting close to 50 and she was talking
about her days of travel when she was in her young 20s. she’d say that she would go
on vacation with 20 bucks. that was all she needed because she’d be going to
stay with a friend they’d pick her up at the airport.
she’d have $20 for food and that was all she needed. and the food for 20 bucks…she
said she’d have a jar of jam and, like, a loaf of bread and she’d sit in the park.
she was recounting this story with, like, great memories and fondness. she said
these were some of the best ships of my life. $20! imagine taking
a vacation with $20. if you’ve already inflated your life. that’s impossible to
consider that you’d spend 20 bucks on vacation. but she did and it was great.
when my girlfriend and I were in college, we didn’t even have a dollar to buy…we
used to be obsessed with frozen broccoli. frozen broccoli was a dollar and tax at
the local convenience store and we didn’t even have a dollar between the
two of us even though we both worked. we didn’t have an extra dollar so we would
scrounge and ask our dorm friends to look under their mattresses for spare
coins because we didn’t have a dollar. now I do not look back at those days of
having absolutely no money in anything other than, like, love and just
such incredible times. back then and we had nothing. if you’re over 30 think back
to your 20s, your young 20s. did you need a ton of money to have a good time or
did you have a really good time without spending a lot of money? that’s kind of
what we learned. we weren’t expecting…we were expecting to have some sacrifices
in our life. I think the big surprise for us is that it really wasn’t a sacrifice.
we were prepared to make some sacrifices to have the freedom of not working
anymore. but it turns out that, I mean if a sacrifice is like a negative thing, it
really wasn’t for us at all. not at all. I think also we found some
tricks so that we can entertain ourselves inexpensively. there are
things that we do now in our life that make it so that we don’t have to spend
money to make amazing things happen. I’m gonna say the dining is our third
largest expense where we really reduced, where we really were able to cut back. and that
was primarily from dining out. we ate out a lot and when there were five of us, and
we were all eating out at one meal, you could easily spend 150 bucks on a meal
with five people, no problem. and so once we moved into our smaller space, and
we’re not dining out as much, and we are cooking our meals on our own, it’s…
actually we love the food that we cook and we were able to save a lot of money
by not dining out so much. and I’ve mentioned this before. Tim lost 30 to 40
pounds after we retired, I think, because he wasn’t on the expense-account meals. so
dining out, not only for business but also just the family and the two of us,
was definitely contributing to health issues because of weight gain. yep.
for sure we love saving money at the grocery store and we are not couponers
at all. we did a very early on series back at the very beginning of our
channel. so the videos are really rough. we had no editing equipment at all. so we
have to say everything like mistakes and all were out there so we had to talk
really fast to make sure that they didn’t get on camera. but anyway so they
are rough but they’re I think our 20, I don’t know, 16 or 20 types of how we save money on
groceries. I’m gonna put a card up top. I know that it is rough. we get it it’s
just that it’s the very beginning so hopefully you’ll give us a little slack
on that. entertainment was also a big expense that we had in our former life.
whether that was going to a concert – we would try and do that frugally…we’d sit
in the cheap seats – but we still we went to a lot of concerts. we saw a lot of
movies. we did a lot of things to entertain ourselves on a regular basis.
what we found is that there are unique ways where we can entertain ourselves
for virtually free, primarily through volunteering with cultural organizations
that are doing the things that we like to do. we volunteer for our Denver Film
Society we volunteer for the Denver theater Center so all of our
entertainment is pretty much free through our volunteering. yeah and that
cut out a ton. I think these are like the big…actually there’s one area that went
up and that is vacation. but thanks to house-sitting and thanks to travel
hacking were able to keep that pretty good.
the thing is, in our past we couldn’t take that many vacations so we went from
like two weeks of vacation to over a hundred days a year of vacation. of
course vacation is going to go up when you’re comparing 14 days to over a
hundred but we still found ways to make that much more affordable, yeah.
definitely. we’ve mentioned this many many times before in that we went from a
hundred and fifteen thousand dollars a year spending to thirty six thousand
dollars a year. so something that we want to note is that $36,000 a year is still
a lot of money. there’s a ton of fat in that for us and, by the way, that’s sixty five
hundred dollars a month that we cut out of our budget when we decided to deflate
our lifestyle. the budget categories that we cut out the most we talked about in
today’s video but almost every category had a big hit in our budget. that
includes shopping. we weren’t big shoppers (if you can believe it or not). The
hundred and fifteen thousand dollars a year included very little shopping
compared to our overall budget, but some things did go up. our health went up
because of our self-pay health insurance and our more fancy gym. and of course our
travel as I just mentioned. but most things did go down, these are just the
biggies. where in your life can you consider deflating your lifestyle? even
if your goal isn’t retiring early, a goal of financial freedom is a good idea for
everybody, we think, because things change so often and getting to financial
independence is fantastic and having less spending is one of the big keys to
do it. when we decided to make this leap we had a lot of fears. so this wasn’t
something that we just did and we knew it was gonna work, we knew it was gonna
be great on the other side of taking $6,500 a month out of our budget. you can
still have an amazing life and not have all these things in your life. all these
things in our life that we thought were going to make us happier, more fulfilled…
having those things gone? we don’t miss any of those things at all. and here’s
the thing. even if you miss it? add it back, if it’s that big of a deal. there’s one big thing
that we did add back. we used to have a housekeeper for our big house because we
both had really busy jobs. and as soon as we moved to our small space, it made no
sense that have a housekeeper. we were both retired. turns out we love having a
clean house. we hate cleaning the house. we hate it. so
we brought back a housekeeper once a month and that’s 140 bucks once a month
and it’s a big splurge for us because we’re sitting here, like, on the couch
while she’s cleaning our house. but that is $140 I’m happy to spend. actually this
is something Tim wanted more than I wanted. definitely! yeah so if you do cut
out something and it went too far just add it back. you could do that, no laws
about this. Nope! thank you so much for being with us here on our
Channel today. when this video comes out we will be an Amsterdam with our
daughter and it’s going to be the height of tulip season and we are so excited to
be there. part of our financial independence is this idea of freedom and
the fact that we can do these sort of things when it’s the right time to do it.
the tulip farm is only open for two months a year and I think they have like
7 million Hand planted tulips every single year and
it’s only opened like I said for two months. so we are crazy excited – all three
of us. it’s like the thing that I’m most excited for about our trip. but we will
be in Paris Amsterdam and Brussels and that Brussels trip we’re gonna be visiting
Ghent and Bruges, so expect some good travel videos coming up.
we still have all kinds of travel videos to publish from Merida, so we’re not done
with Merida yet. but this early retirement conversation kind of keeps
poking us on the shoulder so we’re not going to avoid it, we’re gonna have that.
so thanks for joining us today and we hope that you’ll give us a thumbs up. if
you haven’t subscribed yet please do it over there or down below because we
would love to see you next Wednesday and every Wednesday. and if you would share
this with people who are interested in this concept of early retirement, maybe
people who are afraid about cutting expenses out, we’re here to tell you it’s
not so scary. dive right in the water’s warm. see you soon.

49 Comments

  • Really glad I discovered your channel. We’re in our late 40’s and are planning on selling our house in a couple of years when our daughters have moved out and moving into our rental property. Hoping this will allow us to retire sooner so we can hit the road traveling which we’re both passionate about. It’s great to hear from a couple who have already done that and seeing how happy you both are. Keep up the great work and enjoy the tulip festival in Amsterdam.

  • Amy doing much better at not interrupting. thanks. It helps with continuity. Its the healthcare thing that is of biggest concern about stopping work early. Actually, the only thing.

  • I’ve been watching a lot of your videos. They keep getting better. I’m 51 and on track to retire at 55. My financial advisor confirmed my numbers too. Now to be patient for a few more years.

  • I love when Amy Interrupts 😄feels like I'm having dinner with friends. And its what I tend to do with my husband, so I can relate.

    I think its great you make videos. You are more reliable then the people who retire in their 30s

  • Great video! In Fort Collins here and I feel your pain on the lack of public transport in this state. Especially when you compare that to Belgium, France or Holland, where getting around is quite easy by train, tram or bus. Would love to hear more about your trip(s). Coincidentally, traveled those very 3 countries in 2017 with my wife and had a blast!

  • You make a good point that one doesn’t have to spend more money to do what one enjoys, just find ways to do it without spending more. You don’t need to spend a lot to have a great time going out or going on vacation. You are very sensible and focussed on your goals, that is inspiring. Kudos for finding a way to deflate your costs without deflating your quality of life .
    Am sure you must be having a great time now in Europe with your daughter. Looking fwd to your videos. Hope to see some food videos with costs too. Also your Airbnb or accomodation and costs. All that is pretty helpful for those of us planning to travel to the same destinations.

  • Thumps up for volunteering! Are you going to house sitting on this Europe trip? Spending time with your daughter is so precious. Thanks for another inspiring video.

  • Congrats on 5k+ subscribers! We were told we needed 3.5 mil+. So glad we discovered FI.

    Can’t wait to see the tulips! I’m part Dutch and dream of visiting.

  • Wow, a 6000 sq foot house is a lot. So smart to go smaller, and not just smaller but minimal. The car theory is interesting too. I was thinking about how my spouse and I could share a car but what do we do if we both need it for different destinations? I need to do some math on just using alternate transportation. Paying the sunk costs for two cars may not make sense. I really love the message that you don't have to spend money to have a good time.

  • We are definitely glad we found your content. I love your mindset of deflating one's lifestyle. We are in the middle of this process now ourselves. Soon to be nomadic. I sent you guys an email a couple of weeks ago but with your current travel itinerary, I totally understand it takes time to read. Keep up the great content. Thanks!

  • Hi guys
    If you are in Brugge and you are looking for somewhere to eat .And you love ribs.
    Check out “Ribs and Beer”.
    About a 10 min walk from the main square ,you might have to book .
    And try the palm beer and the triple trapiste dark beer ,amazing 🙂
    Enjoy X

  • It was brilliant to sell the 6000 foot home!!!! Healthwise it was crucial to quit those high pressure sales jobs! Freedom is everything! Learning lots! We spend $32,000 a year for our living expenses, but still have a $800 mortgage. Enjoy the tulip festival in Amsterdam!😀❤👍✈🌎

  • You folks are living my dream. I'm so glad a friend suggested your channel. Can't wait to dive in and binge your videos!

  • LOVE this topic! I too am thrilled about no more interrupting (haha) as what you both have to say is so valuable. Awesome evolution from your beginning.

    Thanks for your transparency & the specifics on what you did to downsize. Yes, I too feel like I was wealthier in college & in my early career days though I had less dollars & life was simpler with less overhead. Simplicity & knowing your priorities NOW is the name of the game. Thank you both for sharing & Stay Awesome! 👏🏾👏🏼👏

  • In 2009 I foreclosed on my house, declared bankruptcy, and got divorced. I used this as a “restart” to find a permanent way out of the same consumer trap. I lived for 8 years on $10,000 a year. I saved 70% of my income and accrued $450,000.

    I chose not to re-marry or even date, rented a simple single room, used a $10 a month flip phone, and took public transportation. I chose not to get health insurance. All part of a plan to escape the trap. As I quickly saw my progress I really started to enjoy the “game” of living as frugally as possible, still finding quality non-cost enjoyment and knowing that I was getting closer to my escape. Looking back at this time when initially I was believing I was really sacrificing but in reality it ended up being a very mindful, spiritual and meaningful time in my life.

    I’m now retired at 54, remarried, and living very well in the Philippines on $1500 a month. I still enjoy simplicity but I am very comfortable and lack nothing.

    I admit my approach is extremely unorthodox and not replicable for most. However, I would urge everyone to realize that you can come up with a “life strategy” and not become a victim to the “American nightmare.” Excessive consumption and an inability to distinguish between necessity and frivolous spending is what traps most people. File for bankruptcy if need be and break the cycle of being a consumer slave.

  • Fantastic video. Before I decided to make the leap I was eating out 90% of my meals and was spending a heap on manicures, pedicures and hair styling. Just cutting those out allowed me to sock a bunch into my retirement account and it doubled in value in about 5 years to allow me to retire at 55. I hope more people find you to get inspired to do what you did. I may have done a "lifestyle DEflation" for the five or so years that I lived with a tight budget but I am able to live a very comfortable life in retirement. It is not glamorous, but my years of sacrifice taught me that all the excess is not necessary or even as rewarding as my new life.

  • Have a great time in Amsterdam, you will love Ghent and Brugge also.
    Thanks for the video. Mark (from Amsterdam)

  • I was reading my most recent Kiplingers magazine and thought ' Hey,….I know these people''. Nice article.

  • what's the actual interest rate on your investments? In most of the world, it is low or even negative.
    Unless you have amassed a huge fortune, it's going to end someday.

  • I'm saving for early retirement by: 1. earning a reasonable income. 2. Living one level above poverty (small apartment). 3. Limiting monthly expenses. I don't have a cellphone which costs about $50/mo, but I do use Magicjack to make calls from my computer (5 year plan) for a one time payment of $60. I eat out about twice a month. No kids. I own a new car which I maintain and plan to keep at least 10 years. Paid cash. I have zero debt. I use credit cards that have cash back points and pay off every month. I do every now and then go on expensive vacations, but still do things to limit the cost. All of the money I save I invest in growth and dividend paying stocks/mutual funds. Your spending $36,000/yr for two people is excellent. The biggest killer is inflation. Over 30 years that $36,000 will become $90,000/yr with an average spend of $63,000/yr (36,000+90,000)/2.

  • Enjoyed your video. In many countries, like Japan, even high paid professionals live in much smaller homes than your townhouse so a 6,000 sq ft. house would be considered insane. We need more folks like yourselves to explain that no one needs big homes and buying one only makes your life worse, not better. Good job guys!

  • LOL… You went from a grossly overspent budget to an average Joe budget. Welcome to the middle class…

  • Just wondering, did either of you have a hard time downgrading the house you lived in? If so, what eventually made you change your mind?

  • Most of what you are saying follows the principals of minimalism.I would rather live a frugal lifestyle with a modest home and 2 economy cars and retire at 50 then have a massive McMansion and luxury cars and have to slave away in a  cubicle until age 65.

  • Think what if you did this 10 years earlier. Thats a delta of about $750K without accounting for investment growth.

  • Some people use zipcar as their "second car." Of course if you live in the suburbs, finding a zip car might be a challenge.

  • I become a minimalist recently, the stress and spending drops a lot. Although I am working full time with very decent income, with far less personal stuff, the quality of life is getting better.

  • 18 months to go to receive my pension & health benefits. I’ll be 45. We are a two income family. Living only on 35 percent of his income. Debt free including our home. This is why I’m able to retire. We have an amazing life. Step 1: Pay off all your debt and don’t create new debt. Step 2: live off of one income. Step 3: live off of less than one income. It is possible. Wish we started sooner.

  • Great job of helping people to see how straight forward it is to live “well within” your means (and then some). I (and many others) appreciate what you’re doing. Don’t underestimate the contribution that you’re making to people’s lives. Kind regards.

  • It’s amazing how much simplifying your life can actually make you happier. It’s not about “things,” folks. 🤗❤️🔥🔥

  • Sounds like you got smart and stopped keeping up with the Jones!!! Truly is about living on less than you make.

  • I would love to retire early, but that isn't likely to happen based on my age and income. But I'm not saying it will never happen. I will keep working on my debt for now and see where I can go from there!

  • Congratulations! Going from $115 to $36 is a big achievement. How much would rent cost? At least $1000 a month?

  • We're currently at 36K expenses. Trimmed down insurance and cut a few subscriptions. Could cut down more on restaurants.

  • Uh, if you conduct a regular monetized Youtube channel you actually haven't actually retired. Where am I wrong?

  • Thank you so much for this video. Even for people like me who just plan to retire someday, this is helpful. I will never have 3 million dollars saved in time to retire. So cutting things is just going to have to happen.

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