How this 32-year-old couple saved $1 million

We, Mr. and Mrs. Saverdink, are a pretty nondescript couple on the outside. We both have engineering degrees and have spent the past 10 years working standard Monday – Friday jobs. We own a moderately sized 3-bedroom house in a residential area. No kids, just two little cats. No fancy cars. We travel a few times a year (to some pretty awesome destinations!) and prefer to spend our free time hanging out with friends and exploring the great outdoors.

In 2016, we reached a major milestone. Our net worth hit $1 million dollars when we were only 32 years old. We’ve never benefited from a financial windfall and do not hold exceptionally high paying jobs. Slowly, but surely, we amassed almost a million dollars across our retirement, savings and investment accounts over our first 10 years as working professionals. Combined with $100k in equity in our house, we tip-toed over the millionaire net worth threshold and our savings have continued to grow.

What got us pointed in the right direction? Below are some of the major contributing factors that launched us on our journey towards financial independence and early retirement.

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The Importance of an Emergency Fund

Financial stability is about more than just the money. It’s about peace of mind and knowing that if an unexpected event occurs, you are prepared to handle it. A study in December 2015 showed that 63% of Americans do not have enough savings to cover a single $500 unexpected expense. $500 is a moderate car repair. An emergency trip to the vet. Repairing a broken furnace in the middle of winter.

If you haven’t yet, take a moment to assess your overall financial situation and understand your rough monthly budget. Once you have an understanding of your personal situation, establishing an Emergency Fund should be your #1 actionable financial priority.

What is an emergency fund and why do I need one?

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April 2017 Spending Summary

April was a fantastic month from both a financial and a traveling-to-new-places-and-having-lots-of-fun standpoint. We came in almost $2,000 under budget this month!

As an April Fool’s joke, we left Boston in the middle of a major snowstorm (gotta love New England!) and headed south for our much anticipated week-long scuba diving trip in Belize. This trip was pre-paid back in January, but a few additional travel expenses hit our back account in April. Core expenses remained low thanks to being away for 1/4 of the month and warmer temperatures resulted in lower heating costs. Spring was in full swing by the time returned to New England, so we hung up the skis and kicked off our summertime outdoors activities.

Scuba Diving with Sharks in Belize

April 2017 Spending Total: $3,740

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Jan, Feb, March 2017 Spending Summary

It’s hard to believe it’s May already. Even though this blog just came into existence in April, I want to keep us accountable for our monthly spending throughout the entire year. Our 2017 monthly budget is already planned, so let’s see how our first quarter spending compared.

Spoiler Alert: Winter 2017 was full of skiing, skiing and more skiing… until there wasn’t any more snow!

Skiing until the snow is gone!

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Where Does the Money Go? Time to Create a Budget!

Beware of little expenses; a small leak will sink a great ship.” ~Benjamin Franklin

Creating your first budget can definitely seem overwhelming, but if you’re looking to get ahead financially, it’s a must have. There is no compromising on this one. The most basic rule of building wealth is living a lifestyle in which you earn more than you spend. Sadly, just like calories in that delicious piece of chocolate cake… we often grossly underestimate how much we’re spending (or consuming!) when we’re not keeping track. A budget is an estimation of your income minus your expenses over a given period of time, typically a month for personal finance purposes. Once you understand your monthly budget, you can start optimizing and making conscientious decisions to improve your financial well-being.

Prior to starting a detailed budget, I highly recommend everyone calculate their net worth. This exercise will give you a bird’s eye view of your overall financial picture and allow you to track financial advancement as time progresses.

Ok, let’s get started on that budget!

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The Saverdink’s Monthly Budget

I think we’re all a little guilty of financial voyeurism. Who isn’t a little curious about how much our friends, coworkers, family members and neighbors earn? Although the more tantalizing topic may be how they choose to spend their money…

Kayaks are expensive to buy, but free to enjoy!

When we’ve told friends of our early retirement plans, the first question is always, “But how can you afford to retire 20 years early??” Well, we’re DINKs. We’re both engineers with high earning potential. We live a moderate cost of living area. We’re careful how we spend our money, but we still have a lot of fun.

Are you one of those super frugal couples that never spends money?

Absolutely not. Extreme frugality, while admirable, is simply not something we’re interested in as means of getting to financial independence faster. Life is about the journey, not the destination. If we eliminated all luxuries during our journey, it wouldn’t be a very enjoyable one. Our budget reflects a lifestyle of strategic frugality as we work towards early retirement. We splurge on experiences and goods that matter most to us, while conscientiously refraining from spending habits that hold less value to us (sorry, no fancy restaurants or $300 purses). Our yearly vacation budget is ridiculous, but traveling is one of our top priorities and we do a lot of research to stretch those vacation dollars as far as possible.

So curious where our money goes each month?

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The First Step to Financial Independence: Know Your Net Worth

Financial independence is something that many of us secretly (or not so secretly!) long for, but have no idea where to even start. Unfortunately, unless you’re a trust fund baby, the recipient of a massive inheritance or a really lucky lottery winner, achieving financial independence at a young age may seem unachievable. It’s a daunting task, but by starting now and taking control of your financial future now, it will open up more options in the future. Most people can’t afford to retire at age 35, 45 or even 55, but with a little financial awareness and planning, many of us can shave a few years off our targeted retirement age and enter retirement with a strong financial picture.

Dreaming of Early Retirement while overlooking the Grand Canyon

So how does one get started on this mystical journey? The very first step to financial freedom is to analyze your current financial situation. Are you already in good shape? Buried in debt? It’s very difficult to make a realistic financial plan without knowing your starting point, so let’s get started!

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The Story of the Saverdinks

Greetings and welcome to our blog! As self-proclaimed DINKs (a Dual Income, No Kids couple) with a passion for saving money, we’ve affectionately nicknamed ourselves The Saverdinks. Only 10 years into our careers in engineering, we saved one million dollars across our various retirement, investment and savings accounts. We created this blog to give people a glimpse at our lifestyle and to foster discussions on personal finance topics. Our ultimate goal is to achieve financial independence and early retirement within the next 10 years.

I, Sarah Saverdink, as the primary finance aficionado, will be your host. So, hello!

As with any story, it’s always best to start at the beginning…  Read more