Money and relationships are two independently tough topics! Putting the two together, you have a recipe for trouble…
Unless you and your spouse are on the same page and are unified in your life goals, saving and investing for financial independence or early retirement can be a long, difficult road.
The LAST thing you want to do is drag a reluctant spouse along in your financial independence journey.
This can cause unbelievable strife in your relationship and take away the joys that brought you two together in the first place!
Just because your spouse has not warmed up to the “FIRE” lifestyle doesn’t mean that you have to give up hope. There are several relationship-enhancing ways for them to be an ally (rather than a detriment) to your financial and lifestyle goals.
First and FOREMOST…
You MUST find mutual life goals to chase together.
Finding alignment on what you want your lives to look like is paramount. After all, how can you put together a road map to obtain your collective dreams if you don’t even know what you want out of life?
If you could design an ideal day, what would it look like?
Talk together. Your ideal day may be totally different than your spouse’s. They may love their job, and even if they had millions in the bank, they would not change a thing. In this situation, the compromise may be saving up for “FI” long enough to replace your income or allow you the flexibility to pursue a different career.
Perhaps, they’ve never even thought of what an ideal day would look like, and this is why they struggle with the concept of saving and investing enough to replace their income before their 60s.
Are you trying to escape from something or running to something?
Most of the time (but not always) the spouse most headstrong about saving for financial independence is not content with their career.
Perhaps, their boss is a jerk or they just hate the work they are doing because they feel like they are settling for a job or have no purpose. Maybe, they just hate living paycheck-to-paycheck or have a “scarcity” mindset and worry about financial disasters outside of their control.
These individuals may be looking to FIRE to be the savior that gets them out of the “rat race,” and they just don’t know how to articulate their frustrations to their spouse.
If their spouse is content with their job, then they may not understand the other person’s “why” for saving towards FI. Instead, they could see saving 50%+ of their income as depravation. Who knows if they’ll EVER get to enjoy spending their hard-earned money!
Instead, consider presenting financial independence as a lifestyle goal that allows ultimate flexibility – NOT DEPRAVATION…
What would it be like if every morning you CHOSE to wake up and go to work instead of feeling obligated just to pay the bills? What if you never had to ask you boss for time off to spend time with your family?
Retirement is a NUMBER – not an AGE.
Financial independence shifts the power from your income source (i.e. your job) to you! It allows you to shape the life you want.
Most of us would LOVE to be able to do WHAT we want, WHEN we want. As human beings, we crave both stability and flexibility. However, few of us are willing to make the short-term sacrifice for our future selves.
Instead, we follow the rut that has been made for us. Go to college. Get good grades. Get a good-paying job. Save 15% for traditional retirement. Spend the rest on new cars, a bigger house, extravagant vacations, and fancy dinners… As we earn more, we save a little more, but we mostly spend our raises (and even supplement with debt)! This lifestyle creep is more than likely the default setting.
However, achieving financial independence requires sacrifice and intentionality. This can be hard for a reluctant spouse.
Rarely is there intentionality with the financial choices we make. This is often because we’ve lost hope and haven’t identified the solution! We haven’t set clear, attainable goals. Instead, we dream of hitting the lottery of having some rich uncle pass away and leave us their millions!
Put the Financial Independence numbers to paper…
Your partner may not be on board because they do not have the knowledge you have. Obviously, avoid coming across as condescending or a know-it-all or having the perfect plan.
However, you can certainly present them with the solution to living the life you want – detached from your 9-5 jobs.
The 4% Rule is the cornerstone of financial independence and is a great starting point to identify how much you need to live the life you want. Simply, the 4% Rule states that you can withdraw 4% of your investment balance in perpetuity.
By default, this means you need 25x your monthly expenses invested. If you spend $50,000 per year, you’ll need a portfolio of $1.25 million. This could be a huge number that seems impossible and immediately shuts your spouse down!
However, it doesn’t have to happen over night. Instead, your journey can be over 10, 15, or 20 years. This can make achieving financial independence much more attainable.
Based on your financial situation and income, saving and investing several thousand dollars per month may not be plausible. Saving $3,000 per month at a 50% savings rate would imply an annual household income of ~$100,000 (pre-tax).
However, what if you could generate additional income? Perhaps, you could cut your expenses. Maybe, you could eliminate your mortgage and only need passive income of $40,000 (or less) which would in turn reduce how much you need invested.
Maybe, you could only replace half of your income and work a reduced schedule and work when YOU want. This would allow you to live a semi-retired life LONG before age 65! This could be the best of both worlds because it keeps you engaged in the workforce AND allows the flexibility you crave.
Striving for financial independence doesn’t have to be a one size fits all.
Instead, you can adapt the principles of FI to enhance your current lifestyle and goals. In the end, it’s about being content and happy and living the life you dream up together!