This week’s Simple Inspiration Interview, I have the pleasure to interview Sarah from The Frugal Millionaire.
On The Frugal Millionaire blog, Sarah blogs about her journey towards financial freedom and early retirement.
If you’re looking for tips on saving money, reducing your stress when it comes to money or hoping to become self-employed yourself, I recommend checking out her blog!
Let’s hear how Sarah has been able to simplify her finances:
What event lead you to seek financial freedom?
The biggest change in our finances came when we found out we were expecting our first baby. When that happened, we transitioned from living off of two incomes to living off of one income so I could stay home with our daughter. Fast forward three years (and add another baby!), and we’re now working at being completely debt free in order to give ourselves more options with our careers and lives.
What does financial freedom mean to you?
Financial freedom, to me, is not having to work and being able to support our family via passive income, savings, rental properties, etc. More than likely, both my husband and I will continue to work even after we achieve financial freedom because we both work for ourselves and love what we do.
How do you plan to achieve financial freedom?
We’re hoping to purchase our first rental property within the next two years. Ideally, rental properties will become our main form of income. We also try our hardest to save all of the income I make from freelancing and live off of my husband’s income.
What area of your financial life did you need to improve so you could seek financial freedom?
Definitely cutting out unnecessary expenses was a huge one for us. My husband and I used to go to Starbucks daily, for example. When we started our journey towards financial freedom, we cut cable, we reduced how often we ate out, we viewed Starbucks as a biweekly “treat” and not a necessity, we reduced our utility usage, etc.
What did you do first to begin the journey to financial freedom?
Started living off of one income while still taking in two! That was the biggest transformation we made and it has allowed us to save a good amount of money. Living below your means is vital to financial freedom.
What was your biggest challenge or roadblock to achieve your goal?
We have two little girls and it’s challenging not to give them everything they want. We make choices daily to save money and always have our end goal in mind.
How did you overcome this challenge or roadblock?
Focused on the end goal always! My husband and I are both extremely open with each other about our finances and we’re on the same page. We talk about finances daily, usually multiple times per day, whether we’re discussing upcoming bills, savings goals or long-term goals.
How will financial independence change your life?
We can work on projects we both believe in, we can spend more time with our kids and each other, we can travel and we can reduce our stresses caused from living such a hectic life.
How long will it take you to reach your goal of financial independence?
Since we’re both self-employed, it’s really tough to say. We hope to be financially independent within 15 years, though. That will put us both in our 40s.
Have you automated your personal finances to help you achieve your goal?
We automate a few mutual fund accounts, but everything else is done on a monthly basis since we never know exactly how much income we’ll be taking in.
What have you automated?
Our mutual fund accounts with USAA.
What advice or tips would you give to others who want to achieve financial freedom?
Start today!! I would advise to first pay off all consumer debt followed by building a nest egg. Then, work towards living off of one income or living way below your means. Save everything you can and make conscious decisions every day in regards to your spending. Consumer items are tempting, but they won’t bring you any closer to your long-term goal of being financially independent.
What book, blog, or podcast would you suggest to someone who is looking to simplify or improve their finances so they could achieve financial freedom?
When I first started on my journey, I read “The Millionaire Next Door” and “Rich Dad, Poor Dad.” They both were just what I needed to motivate me towards viewing my money as a tool to work towards financial freedom.
Do you have an emergency fund established, if so how did you determine the amount needed to fund it?
Of course!! Dave Ramsey recommends $1,000 in an emergency fund. We have a few different savings accounts – one is for emergencies and it has roughly $2,000 in it, one is for taxes since my husband and I are both self-employed, and one is for a down payment on our next home.
What app or tool helped you the most when it came to simplifying?
We use Mint.com to track our expenses.
What percentage of your income are saving?
Between 25-50% depending on our income for the month.
What’s your best savings tip?
Live below your means or take on extra work / side jobs that are strictly for savings. The only way to save is to live on less than you make, plain and simple!
Any other thoughts you would like to share with others who are looking to simplify?
You don’t have to simplify in big ways like downsizing your home or trading in your family SUV for a more economical vehicle (though, of course, those things are great!). You can simplify by starting small. I hang my clothes instead of use the dryer, we cook from scratch as often as possible and my kids do not have many toys. Living a simpler lifestyle starts with make small changes each day!
Thanks Sarah for sharing your story with my readers. As I mentioned earlier I am sure many can relate to your story. You provided some great advice to help those who want to simplify and live a simpler life.
To read previous interviews in the series click below
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If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you. Enjoy the rest of your week. Til next time, take one step at a time to simplify.