I had an intense discussion with wife yesterday about early retirement and in particular about reducing our expenses by selling the car and eating out less. Of course I was on the losing end of the argument as wife refused to accept the fact that the quality of our lives will not affected by these reductions. Being the loving husband that I am, I of courses didn’t pursue the topic further.

Looking back at more of our expenses, I realised there was a substantial chuck that didn’t go into my monthly expenses calculation in my how to save more money for retirement post. These were ad hoc spending such as surprise gifts, birthday celebrations, vacations etc that totalled up to be more than what I thought. At my count last night, there were more than 10 designer bags that cost between SGD3-5k, 8-9 designer watches that cost a couple of thousands each and holidays that went into high 5 digit figures. Totaling these up, I think the spending on these ad hoc stuff came up to SGD100k. Wow!

Also, at an early stage of our careers, I had agreed to buy the RX8 because wife liked it. We paid 128K for it and an additional 10k for the interest. That car has been paid up but it is gone now. So, we spend 138k on something that had no value after 6 years. Brilliant!

If I added up the ad hoc spending and the car, we would have almost SGD250,000 sitting in the bank right now. Assuming a 4% compounded interest, that would get us close to SGD300,000. We could have paid the down payment for a mickey mouse condo unit in District 9, Singapore with this money. But we didn’t. So, I hope you realise that financial planning is about making correct decisions. We didn’t planned our finances carefully and the result is plain for anyone to see. Sure, it is nice to get compliments from friends about the new bags, watches and car, but it did really nothing in terms of giving us our financial freedom.

Hence, I came to the conclusion that if you want to retire early, you need to change your perspective about consuming. A lot of expenses and debt that we carry are no more than artificial wants created by savvy marketers or social pressure. Learn to look through that and we will have a more happy and less stressful life.

Real happiness to me is having the freedom to do what you want to do. No constraints. It doesn’t matter to me if the things you are doing are meaningful as long as you enjoyed them. Most of the time, you will realise that buying more stuff is not something you can really enjoy. The moments of happiness will only last during the time you are buying the items and the times when you receive compliments. Most of the days, these stuff are just lying in our house or at the carpark. What a waste of money!