How We Deflated Our Lifestyle So We Could Retire Early - YouTube

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.