It's Not About Frugality, It's About Freedom

The formula is easy, the follow-thru is hard. Spend less than you earn. And if you live well below your means, you'll have the freedom to spend your time however you want sooner rather than later. Your Money or Your Life by Joe Dominguez and Vicki Robin, and The Millionaire Next Door by Thomas J. Stanley and William D. Danko, make clear that financial freedom depends much more on what you spend than what you earn. The math is simple, save 10-15% of your income and you have to work 40 years; save 30-35% of your income and you have to work 30 years; save 45-50% of your income and you only have to work 20 years; save 60%+ of your income and you only have to work 10 years.

You may think it's easier for high-earners to become financially independent and in some ways, it's true. There's no excuse for a high-earner not to become financially independent, but it still hinges on what they spend. A million-dollar earner who spends two million is broke while a $100,000 earner who spends $50,000 is wealthy. That's not to say it's easy for anyone, including high-earners, to reach financial independence. High-earners, especially those in careers known to pay well, are subject to significant pressure to spend, spend, spend. And in our consumerist culture with shopping available 24/7/365, everyone is constantly urged to buy more, more, more. Often more expensive versions of things they already have, which work just fine. It bears repeating; it's not about what you earn, but what you spend. Because if you spend it all, there's 0 to save and 0 doesn't work in any formula.

The big money traps are high-cost of living areas, a big home, a vacation house, luxury cars. If you track your spending over several months or a year, you'll see where you really choose to spend your money. If you value those choices and keep making them, then you're spending deliberately. If you find you don't value some things, then stop spending on them and you won't miss them.

By consciously minimizing spending, you can maximize savings. In a couple, especially where one is a primary breadwinner, or on the offense, the other person usually does more of the spending, or the defense. Much of that spending is necessary and mundane; housing, utilities, food and household items, clothing, healthcare, childcare, transportation, insurance. Some spending is more discretionary; fancy trips, lavish gifts, private education. While a good offense is helpful, a good defense is indispensable. To control spending and save money, to want what you have - you probably already have more than enough - is the key to financial independence. It's possible.