Upon reading Dave Gow's "Strong Money Australia," I became convinced that achieving financial freedom was within our reach. Excited by the ideas I encountered, I shared them with my partner and managed to persuade her that this path was the way forward for us.
To kick things off, we discussed Financial Independence (FI) together and made a plan. Once my partner understood the pros and cons, we dove into understanding our expenses.
Using WealthPosition we tracked our spending meticulously. This entailed inputting the previous two months of transactions one-by-one. It was eye-opening! Here's a snapshot:
October:
Income: $7262
Spending: $6180
Shockingly, 50% ($3093) went to lifestyle expenses like alcohol, after-pay, hobbies, and entertainment. We reckon we can cut this in half. Food and drinks were our second biggest expense—$128 on coffee and $1092 on fast food.
November:
Income: $7505
Spending: $5352
Progress, but still $2723 on lifestyle expenses and $1324 on food.
Realising we made twenty-seven McDonald's transactions in two months was a wake-up call about our eating-out habits.
As for December:
We're midway through December, just starting our FI journey.
Income: $3559
Spending: $2775
Around 50% ($1335) went to lifestyle spending (mostly after-pay and Christmas gifts). Food expenses were $520, but we've started meal-prepping to save money and eat healthier.
Our plan going forward:
We've asked our employers to pay us directly into our joint account to track our spending better.
Our initial goal is to save a $15,000 emergency fund by May 2024.
After that, we'll probably split our money between index funds and savings until we reach $30,000 in savings.
Then, we'll focus on investing more than half of our take-home pay into index funds.
It's a journey, but we're excited about the progress we're making towards financial stability!