How one couple slashed their spending to retire at 40

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After years of high-stress, high-travel and long hours building their careers, Mr. and Ms. ONL decided they wanted to retire by age 40. “ONL” stands for “Our Next Life,” which is how they refer to themselves for now. Once they quit their jobs, they will reveal their real names. “Our intense careers were bad for our mental health and aging us rapidly, so we knew the change would be worth it,” says Ms. ONL.

The couple has always enjoyed traveling, and they dreamed of a time when they could explore a new place indefinitely rather than racing back to the office when vacation was up. And though both wanted to stay open to new passion projects, like blogging, they wanted enough socked away that they could survive on their savings even if they never made another dime in their life.

Doing their retirement planning was exhilarating—fun, even. At ages 31 and 34, Mr. and Ms. ONL set a target of saving 70 percent of their after-tax income in investment accounts, with the goal of retiring in less than six years. But shifting into hardcore savings mode meant some serious lifestyle changes. Though neither of them were big shoppers, they both tended to buy things without giving the price tag much thought: $40 for halibut at the grocery store, plane tickets for family visits and more. They found themselves spending money on unneeded items more often than they needed to, and they started to feel a little discouraged about their goal.

An aggressive plan of attack

When the couple sat down to make their retirement plan, they didn’t touch the spending category that mattered to them most (travel), and instead slashed their mindless spending to the bone (like going to the store for one item and leaving with 50). They started using budget worksheets and software to track their finances, keeping their goal of retiring at 40 top of mind.

“I started to see that the savings number wouldn’t go up each month [if I continued to spend]. That was hugely motivating,” Ms. ONL says. “This impossible-to-reach goal started to feel less impossible, once we faced where we were and soaked up the full knowledge of where our money was going each month. That was transformative."

With their careful tracking system, every dollar the couple didn’t spend became visibly worth something—it moved the lever toward their goal of kissing their high-stress careers goodbye. The couple began to literally high-five one another every time they made a decision that moved dollars into retirement savings. “Literally high five,” stresses Ms. ONL. Order household items online so you can skip the temptation of going to the store? High-five! Stick with an appetizer instead of the three-course meal at a restaurant? High-five! Book a campsite instead of a hotel for the next trip? High-five!

Mini-celebrations helped put those pricey shopping trips and meals into perspective—and kept the couple committed to their retirement goal. Mr. and Ms. ONL, now 40 and 37, are on track to walk out of work for the very last time at the end of 2017.

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