Cat and I were discussing this a while back. We always did save well. Our problem was this; we could save for specific things but for some reason we never considered just saving. I think the idea of just saving for … something was too nebulous for us. Retirement wasn’t a thing so it didn’t occur to us to save for it.
I’m not sure why we had this blind spot but I realized a while ago, that if we had a target we could save. No target = no savings with us. Introducing me to FIRE got us to a point where we had targets and so our savings habit kicked in and here we are, well on our way. That target of course, being the FI number.
Initially our targets were to save enough for the move to CO, then save enough to pay the new car off. We also set a target of putting the maximum into the 401ks. Now we have an additional target to max out our Roth IRA conversions, and of course, we also have our FI number which is our ultimate goal. All of these targets have given us the push we needed to save.
Savings rate is something that is frequently discussed in FIRE circles. The higher your savings rate, the quicker you get to FI. I am also looking at our savings rate and want to get both of us to over 50% next year. I am close this year at 48% and Cat got over 50% in the latter half of the year, but due to a change in employment, this will not be sustainable.
The take away here is that often without a target, we can flounder and I think many people do, but with a plan, and targets to hit, we dramatically increase our chances of success.