Thursday, July 26, 2012

How Simplifying My Life Helped Me Retire Early

It was 20 years ago, when I was 40, that I decided what I really wanted to do with my life was to retire as early as possible and move to Mexico. I was a recently divorced college student with two teenage daughters still at home. I was also preparing to start a business which I expected would probably bring me more enjoyment than money.

I owned my car and was buying my home. I needed to find a way to live that would not use up what I had salvaged from my divorce settlement. I also wanted to make sure that I taught my children how to live on a limited budget, since they had not yet experienced that kind of life.

Simplified Banking

I had learned in my early twenties how much it can cost to bounce a check. The last time it had happened to me was because someone else had written me a bad check. By the time I knew it was bad, I had bounced five smaller checks. Those charges were pretty painful.

I contacted my bank to find out what I could do to avoid any charges to my account. It turned out that if I kept a minimum balance of $1000 dollars, I could avoid monthly service charges. If I kept that money in a savings account attached to my checking account, it could be used as emergency overdraw protection, just in case.

That minimum amount is higher now, but that habit is one I will never give up. I have never allowed my account to drop below that minimum in the past 20 years. I don't even consider it to be spendable money. I wonder how much it has saved me over the years?

Simplified Credit Cards

I simplified my credit cards by not using them! I've always had a Visa card, but I have it for emergencies only. I live by the rule that I can only buy a thing if I can afford to pay for it. If I can't pay for it this month, I will have to wait until next month. Interestingly, I often decide that I don't really want or need it by the time I have the money to pay for it.

These days, I do use my Visa card to purchase plane tickets and for occasional Internet purchases, but I always go online the same day and pay the bill off completely. I think many people have no idea how much extra they pay for charged items by the time they've paid the interest and, often, late charges.

Simplified Shopping

Sticking to a budget can be so difficult when living in the United States. There is just too much stuff to buy, and it is all displayed so nicely and advertised so enticingly. It is almost impossible to get away from those ads; they're on TV and the radio, in the newspaper and magazines, on the Internet, on billboards, even in sports stadiums. They are all trying so hard to convince you that you really need their products.

My hurdle was trying to stay away from offers that were such a good deal that I'd be crazy to turn them down. You know what I mean - the stuff that is on sale or has such a great coupon price that you want to buy it even if you don't need it. I continued to clip coupons (and I would still if they used them here in Mexico), but only for products that I normally used regularly. I just forced myself to stay away from the great deals on stuff I didn't need.

Simplified Housing

Any time I found myself with extra money for any reason, I paid that extra money toward my mortgage. When my older daughter went away to college, I decided to move from Boise to Bremerton, Washington. I found out that housing was much cheaper there. I was able to sell my house in Boise and use the equity to pay cash for a house in Bremerton. 

The house was the same size, but I lost two bedrooms and gained a large quilting studio. I was able to work from home and also avoided paying rent on a commercial space. Suddenly, I was able to put a huge amount of money into savings each month.

Simplified Transportation

Soon after my divorce, I had traded in my fancy Trans-Am and bought a minivan. It wasn't nearly as much fun, but it sure was useful. I was constantly amazed at what I could fit in that van. I also found a retail space for my business that was only a mile from my home, so that cut down on the gas expenses. I could even ride my bike or walk to work sometimes.

Twelve years later, I inherited my mother's Honda Accord and gave the van to my daughter. This fall marks ten years since my mom bought the Accord. It's looking a bit beat up, as most cars do in Mexico, but the interior and engine are in great shape. I only put a few thousand miles on it each year and I'm counting on it to get me around for many years yet.

Living a Simplified Life

Living simply really has changed my life in many ways. There is so much more to it than I've mentioned here - too much for one blog post. I've decided that this topic is worthy of more time and space, so I plan to add some regular Simplify posts every week or two. I hope I will be able to share something that will make your life easier, too, both before and after retirement.

Thanks for reading!


  1. Very much enjoyed this post, particularly the recognition of how incredibly hard at work the marketing machine is here in the USA.

    Simplification has been much on the minds of my husband and myself as we spend more and more of our time away from home in our RV. Having to handle our bills remotely can be a challenge, and the simpler our financial lives the better.

    We've been charging gas and our RV park stays, but paying for everything else with the cash we allotted and withdrew for this trip. I track where every dollar of our cash goes, and then review the results every couple of days. It is amazing how such a simple process completely changes our approach to spending, and I'm absolutely certain we spend much, much less as a result.

  2. Another great post, Kathy!

    In 1999,I read a book by Joe Dominguez & Vicki Robin called "Your Money or Your Life." For several years I had been actively simplifying my life. But, as Tamara points out, the marketing machine is very powerful and some old consumerism habits crept back in.

    This weekend, I started rereading their book and also found Vicki's blog,

    One of the theme messages of the book is, "Are you working to make a living or are you working to make a dying?" It's a great reminder about what is truly important.


  3. Thank you, Syl.

    I got married at 18 to a guy who could never get on top of the whole credit thing. The marriage didn't last long but I learned a huge lesson: if I can't pay for it, I can't have it. Refusing to have debt saved me a ton of money in interest and fees (and stress).

    It also let me learn well the difference between a want and a need, and helped me keep my spending under control.

    I could have continued working to accumulate more money and live better in retirement, but I chose to retire while I was still young and figure out a way to live on what I had saved.

    I've never regretted that decision, but I'm also always open to opportunities to augment the savings, as long as it doesn't seem too much like work!