After listening to a recent podcast episode, Cody mentioned just how powerful reducing expenses can be when pursuing FI. I'm also using Boldin (aka New Retirement) and they allow a budgeting technique of "Must Spend" and "Like to Spend" and you can calculate the delta in your Monte Carlo Analysis.
We went through our budget this morning based on our actual spend and figured we can reduce our annual spending by about $15,000 per year in retirement- all without really sacrificing much at all in the way of lifestyle. We figure that while we're working, we simply spend more than we would otherwise based on income alone. For example, sometimes we go out to eat because we're tired, not because we really get much enjoyment from dining out. That's a choice we likely won't make when we're skipping the 60 hour work weeks.
These decisions aren't frugality per se, just realigning our spending with our goals and the reality of stepping away from the work force. We tend to think our spending will remain flat or even increase in retirement, but I don't think that's actually true across the board. Planning for that will keep you working years longer than you likely need to.
That projected reduction in spending took our success rate from 91% to 98% and moved our probable retirement date considerably closer. While none of the spending projections were million dollar decisions, the effect was profound.
