Interview with Financial Tool Belt

We were able to sit down with the folks at Financial Toolbelt to discuss why we are working towards FI (financial independence) and how we were going about it. People in the FI community commonly discuss their “savings rate”.  I had never calculated mine before.  Seemed too complicated and my main focus has always been on maxing out my tax-deferred accounts (Roth IRA, HSA, 401K) not calculating my actual savings rate. In my head, I assumed we were sitting at 50% but it turns out we are at a measly 40% (Use the Financial Toolbelt’s calculator here.)

 It also showed that my husband and I only had to keep this pace for another 9 years.  Calculating my savings rate has given me the jump start I needed to find more ways to save.  Granted, we are paying a small fortune for our son’s last year of preschool.  Next year, this money will go directly into our Index Funds after he starts public school. 

Here’s where things get interesting.  According to the Financial Toolbelt’s calculator, if we could squeeze out another $240 a month we could shave off another 1-2 years of working.  That information would make me look like a lunatic if I didn’t do it.  Since I’m in the “I don’t want to work one extra hour” mentality, (small kids at home) that $240 will have to come from cutting costs. I will only have to do this for the next 9 months while we are paying for our son’s preschool. Then I will have to decide if that money should go into our investments or into a 529, so our poor kids can pay for college…

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