Earning

Millennial mom on track to save $3.5 million: The goal is to 'never have to work again'

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Jones and her son.
Photo by XOXO BrittMarie Photography
Key Points
  • Rachel Jones and her husband discovered the FIRE movement in 2015, and decided they, too, want to retire early.
  • The two are on track to save $3.5 million and retire at the age of 40.
  • Among her savings advice is to get clear on your savings goal, to find savings hacks in podcasts and books, and to play the long-game.

Rachel Jones, who uses a pen name for privacy, has long been on top of her finances. The 34-year-old mom in California began learning financial lessons as a kid through ventures like a lemonade stand and working hard in school to receive scholarships for college.

As an adult, she and her husband bought a lifetime subscription to budgeting software You Need a Budget and became part of the Financial Independence Retire Early movement. The goal is to "never have to work again" at age 40, says Jones. That doesn't mean "that we wouldn't work, because I think we both enjoy working," but the option will be available.

The couple set a FIRE number of about $3.5 million dollars. This is the amount they would need to be able to live off of their investments in perpetuity. She and her husband are well on their way and are using tactics like optimizing their taxes and buying used toys and clothing to save 50% of their monthly income, considerably more than U.S. savings rate of 7.9%.

Jones is also bringing in six figures in passive income from her Etsy store.

Here's her advice for anyone looking to cut their spending and save.

'Figure out what your goal is'

Before beginning any financial journey, "the most important thing you need to do is figure out what your goal is," she says. Jones doesn't necessarily mean the superficial financial goal, like having $15,000 in your emergency savings, but the personal goal behind that financial figure.

People think, "'I want to get out of debt,'" she says. "And it's, like, that's cool. But why? Why is getting out of debt important to you?" Is wiping out your loans helpful because it'll enable you to save up for that three-month vacation in Costa Rica, for example? To be able to buy your first home? Or to someday be financially independent?

When you can connect to the deeper meaning behind your financial goal, it will be a lot easier both to negotiate your life around it, and to stick to your plan in the long term.

'It's not about deprivation: It's about trade-offs'

One important thing to remember as you plan your budget: "I think it's not about deprivation," she says. "It's about trade-offs."

Take inventory of your daily, weekly, and monthly expenditures. Among them there will be expenses you can't avoid, like your rent or mortgage, your bills, your groceries, and any debt, and there will be expenses that are more discretionary, like going out to the movies or flying out to the beaches of Puerto Rico twice a year.

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When it comes to your discretionary spending, consider what is truly important to you, and see if you can cut down on the rest. If you love going on monthly hiking adventures but don't care as much about that weekly cocktail you've been drinking, cut down on the latter and set some of that aside toward your savings goal.

Jones quotes Ramit Sethi in his philosophy toward spending: "Spend lavishly on the things you enjoy, and then cut like crazy on the things that don't matter to you."  

'There's YouTube videos, there's podcasts, there's blogs, there's books'

Get inspired. When it comes to finding financial tricks to apply in your own life, "there's YouTube videos, there's podcasts, there's blogs, there's books," she says, adding that, "there's so many financial experts that have these cool hacks" that could help you move toward your goal.

Try doing a google search for videos, podcasts, or books about terms like saving, spending, and budgeting, and start learning tactics to rejigger your personal finance in effective ways.

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Ultimately, seeing your goals play out takes time and patience.

"I think people want to get rich quick," she says, but you likely won't be able to get rich tomorrow unless you win the lottery "and the odds of that are low." Instead, when it comes to a goal like saving enough to retire early, it's really about playing the long-game.

The Jones began saving for early retirement in 2015, with the goal of retiring around 2027 or 2028. That goal was many years away, but over time, as they've stuck to their plan, they've seen their money accumulate.

"Eventually you hit a point where it just snowballs and everything compounds," she says, but it's ultimately "the accumulation of a bunch of little tiny changes that you made" over a number of years along the way.

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