Are you on the path to financial independence? Is your significant other? Are they just along for the ride? Having an engaged partner is a game-changer! I’ll share my personal story and how we maintain our partnership on the path to financial independence.
As a school principal, I’ve always been a huge proponent of shared leadership in a school setting. There are a number of definitions, but the general idea is that shared responsibility is much more powerful than a single visionary or autocrat. If everyone collectively sets the goal, and identifies the strategies to reach it, then you’re much more likely to succeed.
This is especially powerful in education where a series of political reform initiatives have left professionals feeling disempowered and undervalued. A team of energized teachers and instructional assistants is an amazing thing. That passion, directed collectively, does amazing things for kids.
What does this have to do with financial independence?
You may have noticed that in posts about my personal financial actions, I always use the word “we.” That is not soft writing – it is an intentional and meaningful choice. My path to FI is based on shared leadership with my wife (Teacher FI, aka TFI.) It wasn’t always that way. But now that it is – I consider it my most valuable asset.
Our pursuit of financial independence, and our relationship to it, evolved over 10 eventful months. We went through three distinct phases. I’ll describe those and how we moved to the next phase each time. Finally, I’ll describe exactly how we set-up our conversations to maintain shared ownership of our FI pursuit.
Phase 1: Solo Obsession
I’ve written before about how I first started exploring FI. Rather than go through it again, I’ll simply summarize by saying I was frustrated with my job and stumbled across the possibility of financial independence.
I became obsessed. This is not unusual. I have a fairly obsessive personality and if I decide to do something, I do it. This is a result of both an unhealthy competitive streak, and attention issues.
TFI is used to this. When feeling charitable, she’ll say I’m intense. Other times, I get described as a maniac. I don’t argue with either. It’s made me both professionally successful and at times insufferable.
Anyway, I started charging hard to build a plan for financial independence. I looked at the accounts that we’d been haphazardly contributing to and mostly ignoring. (Some of the fees – sigh.) I tightened up a rough net worth calculation we’d thrown together a few years ago. I took a run at our first FI target number using our current spending.
Then, I built spreadsheets. And more spreadsheets. I adjusted assumptions, changed time scales, added in new learning. All of it told me that financial independence was possible earlier than we had assumed. Certainly earlier than the mid-60s retirement most of our friends talked about.
TFI watched this in amusement. We’ve been together for more than 20 years, and she knows how these things go. She calmly waited to see if this was going to be a sustained burn or if my obsession would switch to a new target.
Little did she know.
Now, we’ve always approached our marriage as a partnership. Our money has always been shared. Though we do each have our own passions and hobbies, we always make big decisions together. I felt like this was a big decision, and needed to see if she was on board.
Early FI would be possible if I was the only one making changes. But it would be harder – less enjoyable and take longer.
To transition from solo to a shared pursuit, I knew she’d need more background. I hadn’t really discovered the online FI community yet, or I might have used that. Instead, I asked her to read two of the ten books I’d consumed. I chose one that would give her the basic concepts of building wealth, and a second that outlined a couple’s pursuit of early retirement. (Note, I consider both of these books useful, but not authoritative.)
I promised her dinner and a bottle of wine during our annual winter break. (We’d have done this anyway, but she played along). I asked if she’d be willing to talk about our financial future. She was. We are financially comfortable, but money conversations between us still have friction. Best to do it when we were a bit relaxed on a work break and with some wine!
Over dinner, I talked her through what I’d learned and what I was thinking. I asked her what she’d thought of the books. We discussed the possibility of buying more time for ourselves. It was a beautiful conversation. Rather than the usual tension when we discussed money, it was positive and aspirational.
The next day, we sat down and I walked her through some of the spreadsheets I created. We agreed to build a security fund, increase our retirement savings, and start contributing to taxable investments. (See our first year goals for more detail.)
After 3 months of solo obsession, we entered a new phase: On Board.
Phase 2: On Board
During this phase, my obsession continued. I found the online FI community and started reading posts daily. I subscribed to blogs and listened to podcasts. I continued to tinker with tracking mechanisms and different ways of looking at our financial picture.
TFI was on board. She got her 403b withdrawal set at work. She didn’t grumble at all when our disposable income went down due to auto-withdrawals. Rather than being amused by my focus on FI, she was supportive.
As I learned new information (457b!) she gamely allowed me to alter our plans or make adjustments to our withholdings. I opened up an online savings account so our emergency fund would earn 2% interest – she didn’t blink when $25k disappeared out of our normal account.
It was great to have TFI on board. Our plan was clear and improving. We would definitely hit FI, and do it faster than if I was still pursuing it as a solo obsession. This phase lasted about six months.
Then, I realized there was still tension. TFI was content with our plan to naturally get us there over time. I was interested in shortening it to allow us choices sooner rather than later. And we hadn’t really done much about one of the main levers: spending.
Fortunately, neither of us have ever been extravagant spenders. We buy nice things, but don’t have the habit of expensive clothes, nights out, or a need to keep up material appearances. (Travel is a different story…) Because of this, we were able to make significant steps toward FI without really taking conscious steps to reduce our spending. However, we had stopped the slow and steady increase in spending, AKA lifestyle inflation, that had characterized our time together.
It came to a head at the end of the summer when we did a quick financial review. TFI gets paid three checks in June (part of her teacher contract) and then not again until the end of September. We also do a fair bit of traveling over the summer. I’d tried to push us to carve out extra savings over the summer. It seemed doable.
TFI has always managed the short-term spending. So, while I was acutely aware of our big financial picture, I didn’t pay much attention to what happened with our spending. (Every couple is different, this is our way!) So when we did our summer review, we’d missed our (my) goals. Badly.
It didn’t affect our overall picture, and TFI wasn’t really concerned. I was very frustrated. (Vexed even!) The difference in our reactions was stark and puzzling.
Reflecting on this, I realized that while she was supportive and on board with the FI path, I was still the driver. Please don’t get me wrong, I feel incredibly fortunate in both life and marriage. This state would have been perfectly okay forever. But, I wondered if there was another step. And I knew that we’d have to be clear with each other before we became frustrated with the other. Money can be such a strain in a relationship.
During my blog reading, I’d come across the Mad Fientist’s letter from his wife about this very subject. I suppose a part of me had been wondering if something like this might happen. It hadn’t. Instead, I took this approach and composed a letter of my own to TFI.
This had two huge benefits: the first was I had to come to grips with my own personal feelings about money in order to write it. I cannot recommend this enough. At some point, I may write a whole post about it.
Quick aside: Define your personal relationship with money. I discovered that my childhood of poverty, and the family expectation that I would be financially successful to care for my mother, had caused a very warped relationship with money. The sense of financial insecurity was overwhelming. In short, it was impossible for me to ever feel like I had enough. Money allowed choice and security I’d never had.
The search for FI helped me fight that by creating clear and measurable steps. It also defines an approximation of what enough is. This allowed me to see that my obsession was definitely not about being rich, but about being in control of my time and personal sense of safety. It was why I felt a draw to speed the process up, rather than just let it happen.
The second benefit was TFI’s reaction to my clumsy 3000 word rambling. I had intended it to provide clarity of my feelings, so she could be clear about hers. In my mind, the likely end result was we would at least understand the other’s perspective. Then in moments of tension we could work through them.
I don’t want to speak for TFI, so I won’t say what she experienced in this period. (Maybe at some point I can get her to write a post about it!) She shared with me the letter made her feel fully included and that changed everything.
After six months of being On Board, this shifted us to a whole new phase: Shared Leadership.
Phase 3: Shared Leadership
TFI asked to sit down and understand where our money was. We went through our investments and why I’d chosen each. I walked her through the concept of diversification. I asked about her risk tolerance, and she wanted to feel a little less aggressive. I agreed to make some adjustments in future investments to increase our percentage of bonds. (Probably good – we’re still in a very aggressive stance even after adjustments. )
We also agreed to start tracking our expenses for the remainder of the year. This will help identify future possibilities for savings. I also mentioned that I thought we could take advantage of credit card rewards, but hadn’t had time to dig into it.
I left that initial conversation feeling even luckier than before. I wasn’t sure how it would change things long term, but I knew we’d make FI someday. Our marriage was stronger than ever.
Little did I know.
The next week I came in and found her going through mailers to clip coupons. We hadn’t used coupons since our new teacher days.
A week later she asked me about applying for a rewards card and suggested signing up for a new credit card because of research she’d done. I was no longer driving – we were in a partnership.
We’ve now been in partnership mode for about three months. It feels right. I’ll still be doing the majority of the reading and research – it’s a passion for me in a way it isn’t for her. But she’s actively involved. We’ve built systems to ensure the other is always looped in, and to help us identify optimization opportunities. We will reach FI together.
How We Maintain Shared Leadership
Every family is different, but here’s how we manage our partnership. I’m sure it will evolve (things always do), but I’m confident the general framework will be the same.
Include each other in significant actions. I continue to learn and look for tweaks. I don’t drag her into all of this, but as soon as there is something I think we should try, we talk about it. I explain to her my reasoning, answer questions, and then respond to her challenges. In true shared leadership fashion, this results in better actions. Most of the time we move forward, but there have already been a number of times where she talked me out of something. So far, everything she’s suggested we do has been the right choice!
By limiting it to points of action, it keeps the pursuit from being consuming. We have a good life – we should enjoy it along the way.
Celebrate small wins. While we aren’t on the extreme frugality path, we are actively looking for savings that don’t impact our happiness. Each time we save, no matter how small, we share the success. With us both working at it, and still fairly early in our journey, the number of small wins is motivating!
Annual Review. We’d agreed to this in the On Board phase, but now it feels so much more meaningful. Each year in December, we’ll have dinner and wine and review our previous year goals. Did we hit our investment targets? Can we stretch our savings rate farther? What do we need to set aside money for?
Regular check-ins not financial reviews. Once a month we go for a long walk and just talk. We believe it’s important that we get out of our normal environments, away from spreadsheets and our accounts. This is key.
At this point, it’s not about numbers. She pays attention to the spending, I check (more often than I should) the investment accounts. But we don’t bring them along on these walks.
Instead, we talk about our happiness and excitement level. We discuss our fears (e.g. what does a slowing market mean?) I share my current area of learning/obsession. Most of all, we spend some time talking about the future and our potential choices when we reach FI.
This is also where we talk about some spending variances that have happened in the past month, or might happen in the next. Did we slip this month? Is there a major expense coming? A tight budget doesn’t work for us, but vigilance does.
These walks are perhaps my favorite time each month.
It’s been a wild evolution! The initial excitement I felt when first learning of financial independence has ratcheted up with each step of TFI’s engagement. Having her as a partner, and FI as a central part of our shared life, is a true game-changer.
Did you and your partner progress through similar phases? Are you satisfied with where you are? How do you engage your family in your financial independence journey?
I think these are things we’re all interested in. Share in the comments below!