On paper, Financial Independence Retire Early (FIRE) is a simple concept – spend less than you earn, grow your savings gap, optimize your taxes, invest your savings, and wait for your money to compound over time.
But one thing that doesn’t get covered enough with the FIRE movement is the relationship side of money.
To be more specific, if you’re on the FIRE journey with a partner, how do you make sure the two of you are aligned? After all, if you and your partner aren’t on the same page, none of it matters.
For us, Mrs. T and I have been on the FI journey since 2011. This year marks the 15th year of our journey. That’s 15 years of saving, budgeting, investing, making difficult financial decisions, and occasionally having disagreements on money-related decisions.
I figure it’s worthwhile to spend some time discussing how we stay aligned on money and some of the relationship challenges we have faced since we started our FI journey.
How it all started: The financial epiphany
Although both of us came from frugal backgrounds and we both learned in our youth to spend less than we earn, we didn’t really focus on optimizing our finances or investing intentionally when we started dating and when we started living together.
It wasn’t until we read the Secret of Millionaire Mindset that we started having deeper and more detailed conversations about money and how we want our financial future to be. Around the same time, we were also considering getting married, so it was important to make sure we were both aligned on our future financial plans. We both recognized that building wealth through saving and investing could give us more options and freedom in the future.
But just because we talked about money didn’t mean we always agreed on every financial decision we made.
Far from that!
How we are different due to our money personalities
Mrs. T and I don’t think about money the same way.
Deep down, I’m an “extreme” saver and optimizer. I’d always find ways to optimize things and try to save as much money as possible. Even if I could save 50% on something, I would try to find more ways to save another 20%.
Mrs. T, on the other hand, is a more balanced saver. She doesn’t like spending money unnecessarily, but typically won’t climb the mountain to see if she could save even more.
Another way we are different is that I’m a self-proclaimed spreadsheet nerd. I am a numbers person and I love spreadsheets. I have many different spreadsheets tracking different things and data, charting our historical trends and projecting future ones. Whenever I see data in spreadsheets, I see data and optimization opportunities.
Mrs. T likes spreadsheets too but not nearly to the extent that I do.. She’s more practical and intuitive. She cares whether we have enough and whether we can enjoy life now without sacrificing our future. She likes to see things from the 30,000-foot view rather than getting into the nitty-gritty details as I do.
Our different money personalities created some disagreements and discontent when we first started our FI journey. For example, Mrs. T enjoyed going to a cafe to have great conversations while having a good cup of coffee and delicious pastries (i.e. having hygge). Meanwhile, I would calculate in my mind how much money we could have saved and invested if we hadn’t spent the money.
Realizing what we needed to keep us aligned
Over time, I realized my save-save-save-then-save-more default mentality wasn’t healthy. I learned that I need to relax and spend money to enjoy the present moment. On the flip side, Mrs. T began to understand my worries and my insecurity with not having enough money and started to cut back slightly on the “nice to have” expenses.
We found our “balance” by meeting each other in the middle. We both learned that it’s vital for us to stay aligned financially. These are some systems and habits that have helped us:
Regular money conversations
We talk about money regularly but we try to keep it natural and relaxed rather than turning these chats into formal meetings. We’ll talk about money over meals, over coffee hygge, or while driving. Quite often, we involve both kids and explain to them why we are talking about these topics. In our household, we don’t shy away from money talks, we encourage them.
These money conversations happen regularly, sometimes multiple times a day. We keep them very casual and relaxed. Although we have regular money conversations, we don’t discuss our investment portfolio and net worth daily. We want to ignore the noise and focus on the long term. I’m in charge of the details and I provide Mrs. T the big picture updates without overwhelming her with all the details. So when it comes to investment portfolio and net worth, we typically discuss them in detail every quarter.
Reviewing our expenses – focusing on the trends rather than amount spent
When we first started tracking our expenses and using our budget system, I was very much focused on how much we spent on the different categories every month. I wasn’t looking at the big picture and certainly wasn’t focusing on the spending trend.
As our net worth grew larger and we had a few years of spending data on our hands, we finally developed a system that works for us. Every 6 months, Mrs. T and I will sit down for about 10 to 15 minutes to look at our spending spreadsheet. We look at the trends and see if there are categories we are overspending or underspending. If we are overspending in a certain category, we try to find out why. For example, if we were spending more than usual on dining out, perhaps it was because we had friends or family visiting.
Making the financial big decisions together
For the most part, I manage our investment portfolio and make the buying and selling decisions. Sometimes I would consult with Mrs. T if I were to make drastic decisions like adding a new position or closing a position. Mrs. T trusts my judgment on the day-to-day investment decisions, but I found it is always a good idea to talk to her about my investment thesis and get an agreement on big portfolio moves.
When we buy something with a large price tag, we always talk and come to a decision together. For example, we had to replace our Samsung fridge in December. Originally, I really liked the Bosch fridge with a higher price tag than we planned for. After looking at the Bosch fridge compartments and layout and comparing it with a few other fridges, we ended up with a completely different fridge that we never considered. Mrs. T also wanted to replace our gas stove range with an induction range. But after learning all the costs involved in changing the breaker and house wiring, we decided to hold off on the purchase.
Sharing financial goals with individual flexibility on spending
Collectively, we share the same financial goals – max out our TFSAs and RRSPs, our dividend income, how much money to save in our cash wedge, and our FIRE timeline.
While all of these goals mean saving a lot of money regularly, we each have some individual flexibility in terms of spending. In the past couple of years, I spent money on curling by buying curling equipment and paying for curling fees (it was over $1,000 of curling fees this past season). Mrs. T spent money on pottery related items. We don’t get on each other’s cases about what we spend because we have enough trust in each other and understand our overall budget.
The key is finding the right balance. If every dollar becomes a source of negotiation, our FI journey would be a drag and it would not be very fun. We want our FI journey to be enjoyable. The goal of financial independence and early retirement is to create more freedom and flexibility, not less. That’s the key that we remind each other constantly.
Being transparent
We have joint bank accounts and treat our finances together. We can both see all our expenses and holdings. There’s nothing to hide, no secret spending, no surprises. The joint bank accounts have worked well for us because we trust each other and this setup ensures that we are accountable to each other. Having joint bank accounts has worked well for us, but it may not be the case for every couple.
Another aspect of being transparent is knowing all the practical details, like how to log in to the different accounts, who the benefactors are for the different accounts, and where to find the essential documents.
Some tips for couples on the FIRE journey
Of course, it hasn’t always been smooth sailing for us. We have had some very tough money conversations and arguments. But at the end of the day, we know we are on this journey together, so we meet each other in the middle and find solutions that work for us.
Based on our 15 years of FI journey experience, here are some tips for a couple who are working FIRE together:
Start with the “why” not “how much”
Don’t focus on the end number because life isn’t static. So if you start with “how much do we need to reach FIRE” you may be chasing a moving target. Instead, start with why you want to reach FIRE. Why do you want financial independence? What does reaching FI mean to you? What does early retirement mean to you? Is it important? Or is FI more important? What would you do with your life when you reach these key financial milestones?
Respect different money personalities
There’s no way around it, there will be money personality differences between you and your partner. One of you might be a saver while the other one is a spender. It’s OK to be different. The important part is to understand and respect the different personalities, figure out how to approach the journey together, and leverage the differences for financial success.
Approach the journey together, not alone
I have seen this a lot where one partner is obsessed with FIRE while the other is not so sure or being dragged along reluctantly. This is a recipe for resentment and disaster. Make sure you approach the journey together, not alone. Ensure both partners are aligned.
Don’t chase perfection
You can’t always make the correct decision in life. You are deemed to make some mistakes. Therefore, it’s nonsense to chase perfection while you’re on the FIRE journey. You and your partner will not always agree on every investment decision, how you spend your money, or the right time to retire. It’s OK to have disagreements here and there. Rather than chasing perfection, focus on the majority part that you can agree on and be willing to compromise on the rest.
Celebrate the small successes together
The FIRE journey is a marathon, not a sprint. Therefore, it’s vital to celebrate the small successes together. For example, when we hit $100k in net worth, Mrs. T and I celebrated by going to a cafe to have a nice afternoon hygge together. When we hit a major investment portfolio milestone a few years ago, we made a nice dinner together and celebrated.
You both worked hard and achieved these milestones together, so celebrate these moments.
Look at the big picture
Instead of nitpicking on the day-to-day expenses and portfolio value movements, focus on the big picture. Afterall, money is a tool in life. It’s a means to build the life you want with the person you love. Focus on the big picture and don’t let the pursuit of FIRE damage your relationship.
Final thoughts – Where we stand today
The last 15 years have been quite a journey and we are far from done. To be honest, the journey hasn’t been easy. There were tears, sweats, and many arguments along the way. We have made some mistakes and been frustrated with each other. We also realized we will continue to make mistakes, have arguments, and get frustrated with each other. That’s OK, because that’s life. Life isn’t perfect. And neither are we. Ultimately, we both know that we love each other and want to achieve FIRE together. We have a shared vision and want to build a life together with more freedom, more options, and more time together as a family.
I’m extremely grateful that we have and are continuing to approach the journey together. I have an excellent teammate on this FIRE journey and we are 100% committed to it. Whatever is ahead of us, we know we will be able to figure it out together.
At the end of the day, life is more than your portfolio value or your net worth. Money is simply a tool. Life is all about having memorable experiences and the people around you.
