Save. Spend. Splurge.

Without a job, this is my short-term plan for the next 7 years

As I’ve lost my job recently and unexpectedly…. I have been doing a lot of numbers and calculations.

In case it isn’t clear, this is my motto and driving force for my wealth path:

Make as much money as possible and spend as little as you comfortably can (but also know how to drop down to barebones if push comes to shove).

You have to be flexible, resilient and always be paranoid you’ll end up with $0 at the end of the day, so you squirrel away money to make sure you don’t have to worry about it.

This is what I have been doing since 2009 when I was caught off guard as a new freelancer with the market dropping, and I diversified what I could of my income to not ever rely on my contract work.

New change to my emergency fund process

Normally when I get extended, I throw 50% of my emergency fund into the market, based on over a decade of freelancing, it is extremely rare that you don’t at least finish out the contract until the end date (I mean, if you rage quit or talk back to the Director, you’re very likely to get let go), but it is unusual that the contract doesn’t at least finish.

So, I am making a chance to my new emergency fund process.

Instead of throwing 50% in when I get extended, I am going to slowly throw in the money after I invoice and get paid.

So if I invoice and get paid $20K, that’s the amount I’ll withdraw from my emergency fund and throw into the market, so that I always keep my emergency fund topped up.

Have ~$44,000 cash on hand

It isn’t so bad. I still have about $44K in cash on hand, which is better than $0.

My barebones average budget is $1500

This is my lean FIRE (Financial Independence, Retire Early) budget. I’ve been able to be work optional for a while now, BUT ONLY IF I DON’T SPEND MUCH.

This is the time to prove my mettle I suppose.

My Lean FIRE budget looks like this:

  • Home = $609.29
  • Medical = $15.30
  • Groceries = $800 (apparently our fancy milk consumption alone is $200/month)
  • Other = $75.41

TOTAL = $1500

So if I do the math, $44,000 will last me 29 months or 2.4 years if I use my emergency fund solely and don’t get or have any other income.

My second 2009-2010 mistake I learned from: Not having any side income

I was at home, with very low cash reserves, having unfortunately taken the last year off to travel around the world (spending money no less), and I had to end up selling off my investments to have enough cash to pay rent and so on because I:

  1. Didn’t plan a proper EF for 2-5 years
  2. Didn’t have any side incomes to speak of

I learned that I was reliant on my contract work and if that dried up, I was F*CKED.

I vowed to never be dependent on my job again, so I started up side incomes and built them steadily since 2009 to where they are today.

How much side income? I only need $1000

If I can get at least $1000 in cash a month meaning anything BUT from dividends because I reinvest all of the money right back into the market, this would mean that I would only need to cover $500/month out of my cash reserves.

So my $44,000 will last me 88 months or 7.3 years before I have to touch any investments.

I am 90% certain I can find another contract within 7.3 years, so this is a solid plan for now.

Also, my side income is actually ~$2300 in cash without dividends, so I may actually even get to save some of my side income for the months when it grows lean.

Save, save SAAAAAVE!

And how long would my investments last me?

I have about $500,000 invested in the market at this point in time (give or take the market), which without taking compounding interest into account, would last me 1000 months or 83.3 years

Even if I ended up with only $250,000 invested because everything tanks for years, if I stick to my $1500 budget and make $1000 in side income I can live off it for 500 months or 41.6 years until I find another contract.

Ergo, I am work optional… but on a tight budget

I could literally retire right now and never work again if I was careful with my spending. Even if my investments halved. Even if I never found another job again, but as long as I am able to rustle up some side income!

As I am not very keen on this idea to live on a super lean budget (I am not frugal at all and not happy being super frugal), BUT!!!

I am happy I have it as a backup, I still work on contracts because I love my job but to help plump up my investments and savings because I am not a fan of living on a tight budget.

I am happy I have the ability to cut in my budget so drastically because it was not that lean to begin with.

Most of all: I learned how to cut the fat

What I had to learn the hard way over the years is how to be able to cut the fat from my budget immediately.

I used to live on far less, and this is not anything new, just not my ideal situation.

Still, I am happy for many things such as:

  • No mortgageI paid $300K cash for my home because I don’t like owing people money and I also don’t like the idea of having to sell my investments now at a loss to pay my mortgage (if I had one)
  • No car loan – That was paid in cash too; if I can’t afford to pay for it in cash, then I can’t afford it.
  • Low expenses – Since we own our own place, we control the electricity bills (TURN IT ALL OFF), and it is cheaper than renting in the long run for us
  • Great savings – I could have saved more (we all could have), but hindsight is 20/20 and I don’t want to live a super frugal life only to then at the end “get to enjoy it all” and buy what I want. I want a moderate lifestyle, and that’s what I live until I can’tand then like now, I cut back drastically and only for the interim

Other things I am doing:

  • Stretching out what I have left – vitamins every other day or so, adding water to my shampoo so that I use less (and not like some queen who has lots of money to spend on it)
  • Going vegetarian/vegan – We have cut back on meat significantly and eat 20/21 meals vegetarian
  • Using half of my products – That is, HALF of what I used to put on my body and face, I put half as much product as I did before – actually I should get into the habit of doing this anyway, I am wasting a lot I suspect
  • Using up what I got – Old shampoo? Using it. Old cleanser? It is getting SQUEEZED
  • Cleaning the clock on all my products – I cut the tops off everything I can, and I use these silicone covers to keep the product from drying out as I scrape out the insides. Works GREAT. I get at least 3 weeks extra out of every bottle
  • Enjoying the small pleasures I have left – matcha lattes in the morning, yoga in the bedroom and a billion books to read that I have left until now to do so
  • Obviously no shopping at all – But I have credits from sites (referrals, shopping credits, sales) that I am hoarding now to save up for something I REALLY want. The plan is to spend $0 out of pocket.

Have you run your numbers? What’s your plan? Any other tips?


  • Susan Tan

    Why do you avoid selling stocks and use only cash reserves to live off of? After 3+ years or more, those stocks would have appreciated a lot such that you can get a profit in cash. Long-term capital gains taxes are the only cost.

  • Lee

    I love that people of such varying ages read your content. My husband and I had been working toward his retirement, so we had been cutting expenses, simplifying, and saving more, so we were prepared for this. He is still able to work, but my industry is shut down for now. I think we could continue indefinitely on his income and then on savings, but I really hope to get back to work at some point.

  • bw

    It is great to know you do not have to worry and can retire early if you choose to. Those numbers are good. 🙂 Hopefully things get better and better.

  • Maria

    Great post, I am in similar situation, no debts, house paid off, and checking how far I can stretch this, although admittedly your milk budget is a little different from mine, Is that mainly for your child, if so not sure you can change that..

  • Financial Orchid

    I think most ppl have ran worse case stress tests in these times n with everything closed.

    My reserve can last me until retirement age but I’ll still b alive at 60 but less likely employable then if I really were unemployed for 20 years.

    Good idea about cutting the tops off n scraping the tubes. Never thought to do that.

    Even with $900 a month bare bones spending myself it’s really unfeasible because I have to factor how I’ll spend my time if sitting at home all day.

    Eventually we need to go outside a bit n then we will want to spend smthn however small comforts -a pastry, a drink at the park, a haircut fr someone besides yourself for a change, some supplies to make things at home.

    So I think it’s more realistic for stress testing to allocate some leisure n entertainment spending even in a bare bone spending scenario with no active income.

    And I’m so thankful to bring in a bit of side hustle money even if it’s just $300 a month teaching English online but to have that peace of mind n know groceries can be covered in other ways is more of a mental reassurance more than ever right now.

  • LF Tommy

    I think you have a pretty good plan. I too have kept a large cash emergency fund, 2+ years current expenses. If the world continues to stop spinning then we should have enough to ride it out without putting ourselves in danger of virus exposure. We have automatically started to cut back on use of certain items which has reduced spending. That and the cancelling of our 2020 travel plans will stretch the cash buffer we have built up. Other than work from home gigs I don’t see a way to earn income at this point and I have no real thoughts of bargain buying yet in the market so you are ahead of me there.

    • Sherry of Save. Spend. Splurge.

      Work from home gigs are hard to come by, it is why I started on really pushing the blog and working on those streams of income back when the recession hit in 2009.

      Bargain buying – I will likely not do any of that until the dust settles at the end of the year.

  • Sheila G

    You have given a lot of practical advice here. As a super saver/spender/splurger here (75 years young) I have seen a lot of over-spending, indulging, and waste in my time. My husband and I are retired; own our condo, cars, and are totally debt-free. I am not as careful about utilities as you are, but everything else resonates with my practices. Thanks for always sharing so honestly, I feel like I know you! (we live in Seattle)

    • Sherry of Save. Spend. Splurge.

      Thank you! I’m all about enjoying life but I had to learn how to find a balance which I think I’m on. I don’t love my early retired budget which is why I want to keep working but I’m grateful I have it.

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