- Early retirees typically spend years saving aggressively so they can give up their paycheck and live off their savings.
- Eight early retirees told Business Insider their money habits changed for the better after retiring early.
- Many lowered their living expenses and don’t think about money the way they used to.
- Visit Business Insider’s homepage for more stories.
Early retirement involves a bit of culture shock.
Of course, spending your days not reporting to anyone but yourself and doing whatever you like is exciting. But giving up a regular paycheck — no matter how much money you have saved up — can be a bit scary at first.
Business Insider talked to eight people who retired early about how their finances changed after they took the leap and left the workforce for good. Turns out, their financial lives generally improved after retiring early. Many early retirees ultimately lowered their cost of living and are far less concerned about money than they were while working.
That’s not to mention the many priceless opportunities early retirement has afforded them, like the ability to travel the world or become a stay-at-home parent.
Here’s how retiring early has changed each of their relationships with money for the better.
For Kristy Shen and Bryce Leung, financial independence made traveling more affordable.
Courtesy of Kristy Shen
Kristy Shen and Bryce Leung, who retired at age 31 and run the site Millennial Revolution, spend less now traveling the world than they used to spend living in a major metropolitan city.
"That’s because when you are no longer tied to a job, you don’t have to live in an expensive city," Shen told Business Insider. "You can be anywhere."
They’ve been traveling the world for the past four years and living on $30,879 per year — less than their cost of living when they were living in Toronto, which was as much as $40,000 a year. They detailed how they did this in their book, "Quit Like a Millionaire."
"The trick is to balance expensive places like the UK, Iceland, Switzerland, and Denmark with inexpensive places like Thailand, Mexico, Poland, Portugal, and Eastern Europe," she said. "Once you do that, you control your retirement finances like a chess game that you always win."
Jeremy Jacobson and Winnie Tseng don’t think about money anymore.
Courtesy of Jeremy Jacobson
"The most significant way our finances have changed since retiring early is we don’t really think about money anymore," Jeremy Jacobson told Business Insider. He and his partner, Winnie Tseng, retired in their 30s and run the blog GoCurryCracker!.
"We have enough passive income for everything we want and need, which is incredibly liberating," he said. "Even without the ‘retire early’ life, being financially independent provides a tremendous amount of inner peace."
Jacobson’s thought is a common theme among early retirees, who often say that early retirement isn’t about how wealthy you are. The value of life during early retirement is priceless and doesn’t depend on the dollar, they say — it’s about time and lifestyle.
Joe Udo cut back on his biggest bill — childcare — by becoming a stay-at-home dad.
Courtesy of Retire by 40
Joe Udo of Retire by 40 retired from his engineering career at age 38 when his son was 18 months old. He told Business Insider that retiring early afforded him the ability to become a stay-at-home dad, and he and his wife no longer had to send their son to daycare.
"That was the biggest saving in our monthly budget," Udo said. "We used to pay $1,100 per month for childcare. That was in 2012, so I’m sure it costs a lot more now."
Since retiring early, Udo also spends much less on transportation, clothing, and entertainment — but childcare was their biggest bill, he said.
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