Jamila Souffrant knew she needed a change. Her three-hour round-trip commute from where she lived in Brooklyn, NY to work in New Jersey had gotten on her last nerve. Meanwhile, she felt like she was missing some of her two young sons’ growth, with all the back-and-forth.
That’s when she heard about the financial independence retire early (FIRE) movement. Running the numbers, she realized her and her husband, Woody, could stash away tens of thousands more than they had, cutting their working days down to only a handful of lean years. Over 2016 and 2017, they put aside over $160,000 into savings and paid down a chunk of their mortgage. By keeping the momentum, they would have paid off the house and she would step away from her job by the time she turned 40.
Yet, after the two years of super saving and giving birth to her third child, Jamila decided to set aside her ambitions for the early retirement plan. Instead of investing in index funds she wanted to first invest in herself, Jamila said, by launching her own business in late 2018, which resulted in her quitting her job and revamping the family’s retirement strategy.
In two years the Souffrants increased their savings rate from 15% to 44%. Then their plans for early … [+]
When someone connects with the tactics encouraged in the FIRE movement to boost savings, it’s not uncommon to become almost dogmatic towards reaching a financial goal. But for others, the journey of learning how to use money to their advantage proposed by the FIRE movement can open their eyes to entirely new possibilities when it comes to work and making a living. Often the realization and financial knowledge can change goals soon after christening the pursuit of early retirement.
For Jamila, who blogs and hosts a podcast at Journey to Launch, the tactics she undertook in the FIRE effort have made her realize where best to invest: In herself.
How They Boosted Their Savings Rate
In those journeys to work, Jamila would listen to podcasts about how to increase savings as a way to escape the 9-to-5. The message deeply appealed to her, since she spent so many hours on the commute. At the time, though, it would require a complete overhaul of the family’s finances to pursue such an endeavor.
Living in Brookyn, Jamila made a decent living. Her husband, a high school gym teacher, also makes far more than the average teacher salary, due to the school he works at and the city he lives in. She had plenty of resources to finagle, but to save at the rate she sought, her husband’s “check would be cut in half,” said Jamila. Since he works for the school system, he has two retirement accounts – a 403b and a 457 account. Jamila had her 401k.
They started to slowly increase the savings rate until Woody suggested to just increase the rate to the maximum with one condition: if money felt too tight, they could always go back. They raised their savings rate from at most 15% to over 44% in a matter of a few months.
After jumping fully into the max contribution, the couple didn’t need to turn back, even with two little children running around. Woody took on more side jobs, like summer school, to maximize his earnings while they slashed the amount they spent on restaurants. They were able to save on childcare costs because they paid Jamila’s aunt, who lives in the basement apartment within their home, to watch the kids.
The strategy worked, allowing them to set aside $85,000 in 2016 and then $84,000 in 2017.
Why The Plan Changed
Jamila decided to invest in herself, instead of racing towards early retirement.
As the Souffrants began adjusting their saving and spending strategy, Jamila launched her blog, as a way to keep her honest about their tactics. Yet, as she commuted daily, she couldn’t escape the fact she hated the travel, disliked missing so much time with her kids and worried she was wasting her life for the paycheck.
“We would have reached the goal to pay off the mortgage,” said Jamila, but “I would have been miserable.”
That’s why, in September 2018, after she gave birth to her third child, she decided to quit her job and focus solely on building her platform into a viable business. That included monetizing her blog and podcast, while also building out her event and speaking income. Instead of funneling as much as they can into the 401k, their plans shifted to “invest in my business,” she says.
They cut way back, not saving any money in Woody’s retirement accounts, since his income would have to provide for the family until Jamila’s business grew to a sustainable size. In the lead up to stepping away, they also saved a good portion of their yearly spending in cash, which provided a backstop and protection against the unexpected.
Jamila also has income coming in from an apartment she bought when she was in her early twenties, located in a very desirable neighborhood of Brooklyn. She rents out the studio, bringing in some additional income to help bolster the family’s finances.
Reevaluating As Time Goes On
At the time of Jamila’s decision to step away from the day job, they had saved 20% to 30% towards financial independence, which would have allowed Jamila to retire in four years. Since Woody enjoyed his job, he never had plans to step away from the school until at least 55, which was when his pension would kick in.
After two years, they vowed to check in on the results and adjust Jamila’s strategy, if needed. “Everything is trending in the right direction and we will probably be able to start investing soon,” she said. “If anything, I’ve become more clear on wanting to make my business work and make it profitable.”
Often when people launch their FIRE strategies, they fail to adjust to changing needs or wants. The plan becomes almost locked in stone. But Jamila credits her own experience super-saving, in order to adjust her life, using the money she and her husband earned as a tool, instead of an elusive means.
And she’s happier for it. “You have to be flexible,” Jamila added.