Growing up, I lived in an upper middle to lower upper class household, depending on whether we're talking before or after 2008(Sometimes, I miss the Bush economy, 5% unemployment is boss!). Our answer to a laptop filled with malware was a brand new laptop that will get filled with brand new malware!
Yeah, I was lucky. My parents sent me to college with no loans to speak of, a car, and a monthly stipend of 1500$ cash. I lived large, and my father paid for it. I never had to learn how to cut back, because it had never been required.
Then, one day, I graduated. I spent two or three years dicking around at the U of I, working on startups and taking pre-med classes on my father's dime in case I wanted to goto medical school, aimlessly wandering the intellectual field, before fate finally came a'calling. I got a call one day from the CEO of a certain Chicago real estate company, who had happened to invest in one of my startups a year or so back. That start up failed, but he wanted me to come code for him anyway. Apparently, drive is more important than being right when you're young.
At the time, I was dating this wonderful girl named Jasmine, and she was moving back up from Champaign, IL to Chicago too, and I was worried what might become of our relationship with such distance. I thought it a sign from God, and took the job. As soon as I did, my step mother, never one for my spending, cut me off from the family teat.
It seemed fine, at first. With 2000$ or so in my bank account, I lavished my new girlfriend with dinners on Michigan Avenue, Cirque du Soleil shows, and joined an expensive gym. I thought this new job would give me the life I always wanted, and just blindly expected the paychecks coming in would fill the gap.
Then, during the first month of my financial "freedom" in Chicago, I spent so much money I forgot to think about how much rent was going to be. It wasn't included in my "mental budget," and I ended up facing a 1500$ rent bill with 345$ in my bank account to pay for it.
So much for living large! I grudgingly went to ask my boss for a 1000$ advance, but he slapped me on the back, told me not to do it again, and gave me 1000$ outright. It was the cheapest lesson I've ever learned: privileged, spoiled spending like mine needs this thing called a "budget" in the real world.
I learned how to use Excel, segmented my spending into discrete units, and then continued to spend it just as carelessly, only now always hitting exactly 90% of my income every month. You would think after a scare like that, I'd change, but I really didn't - I just became a little smarter about being stupid.
Some months later, I was perusing hacker news and came upon the post The Shockingly Simple Math Behind Early Retirement, by Mr. Money Mustache. He advocated saving more than half of your after-tax income for retirement, in a comic pseudo-religion known as "Mustachianism."
Now, I've always been a man of numbers, starting with my Physics B.S. from University of Virginia. My girlfriend, her mother, and my step mother, among others, have always advocated saving a large percentage of one's income, but I couldn't understand how saving even 20% of your income(this seemed large to me at the time) could ever allow you to retire. I had just never run the numbers, because it seemed faintly ludicrous to me.
Mr. Money Mustache laid me out like a punch straight to my fiscal nose. Then I visited Firecalc, and saw the math projected into the future across some 300 parallel economic universes. It was like science fiction brought to life. Retirement was possible - and it was possible to in ten years or less, on a programmer's salary like mine. What the hell, I thought. Why did nobody teach this stuff in schools?
I was converted. I took to my excel spreadsheet, and added a new column: "Percent of income saved." I calculated it based on after-tax contribution equivalent to my 401k(5% before tax is like 8% after tax), and money left over outside the budget. I found that the hardest part about my tectonic life shift was not finding the cuts, it was admitting cuts need to be made in the first place. I got a raise about 3 months ago, and I never updated my budget to reflect the raise(maybe some murmurs of Mustachianism already echoing around inside my skull?), and that brought me up to about 25%. But I needed more!
I then cancelled my cable, my 130$/month gym(I have weights in the basement of my building, I don't need a fancy gym, just some creativity), and I cut down on expensive haircuts. None of these things effected my lifestyle very much, but brought me up to 38% of my income being saved. I was ecstatic.
Now, all I need is a couple more raises, and a cheaper apartment, and I'll easily be breaking 75%.
I hereby declare on this blog to the internet, by the end of 2013 I will break 50% income savings, and by the end of 2014, 75%. I will retire by the time I am 35, and it's all thanks to Mr. Money Mustache.
