What do you do when you’re fed up with your job and always living for the weekend?
If you’re this young Boston couple, you decide to save more than two thirds of your income so you can retire to a homestead in the woods of Vermont before your 35th birthdays.
Meet Mr. and Mrs. Frugalwoods, a software engineer and communications manager, respectively. Last year, they decided they’d had enough of the 9 to 5 routine lived out in office cubicles under artificial lights. It left them drained and frustrated, with little energy and creativity to cultivate their interests and tackle the projects they dreamed about.
It also meant the outdoor enthusiasts could only go hiking on the weekend.
So they avowed to sock away as much money as they could and retire in 2017 — at the ripe age of 33. (They blog about their triumphs and travails at Frugalwoods.com, using the “Mr. and Mrs. Frugalwoods” alias so as not to tip off their employers to their early retirement scheme.)
The couple met their freshman year at the University of Kansas, which they graduated from in 2006 with zero student loan debt, something they noted wouldn’t have been possible at a pricier, out-of-state school. Their parents helped them pay for school, they had scholarships and they both worked campus jobs to help cover living expenses. Mr. Frugalwoods worked at the school art museum as a photographer and Mrs. Frugalwoods was a tutor at the campus writing center.
Upon graduation, they climbed the ranks in their respective careers and started making good money. They settled in beautiful Cambridge, MA and bought a four-bedroom home that was walking distance to Harvard and MIT.
This is when they realized they’d achieved exactly what they’d set out to. They had made it, in other words, but weren’t fulfilled. They were stressed out and slaving away for salaries they spent very little of.
It only took one conversation for the couple to decide they wanted something different for their lives — and soon. They began to sketch out an extreme frugality plan that would allow them to retire in their early 30s. They started by nixing their dinner plans for that evening.
“It was kind of a watershed moment,” says Mr. Frugalwoods. “We didn’t go out to dinner that night. Or the night after that. Or for the next year, really.”
The Frugalwoods did not start in negative territory or even from scratch. They’ve never had any student loan, car loan or credit card debt. They’re healthy and have been healthy enough so far to avoid any major medical expenses. They’re also well-educated (both have bachelor’s degrees and Mrs. Frugalwoods has a Master’s), pull in dual incomes and intentionally put off starting a family right away.
“We’re not investment bankers, but it’s undeniable we make good salaries and have managed our careers very carefully,” says Mr. Frugalwoods. “On the other side, we’ve optimized expenses.”
As you can tell from the pseudonym they’ve chosen for themselves, the Frugalwoods have fully embraced the frugal lifestyle. They portray themselves as total hippies and “frugal weirdos.”
How they became frugal weirdos
The couple has always been sort of frugal – and proud of it. Last year their expenses amounted to just $13,000 (not including their mortgage) and they socked away a jaw-dropping 71% of their income.
“We got there by truly focusing on every single line item,” says Mrs. Frugalwoods. “No expense is safe.”
In previous years, they’ve saved upwards of 60% of their income without breaking a sweat. Last year, though, they buckled down with an early retirement goal in sight and started cutting out even more costs. “The only way to figure out what was really necessary for us to be happy and what’s superfluous was to cut things out then reassess,” says Mr. Frugalwoods.
How do they do it? For starters, they’re fiercely independent. “Most things people would pay someone else to do, we do ourselves,” says Mrs. Frugalwoods. They’ve conquered a lot of the typical tasks you might find in a self-sufficient household – they do all their own cooking, cleaning and home maintenance.
To leave it there would be an understatement, though. They only ate out twice last year. They found rot in an exterior window trim and figured out how to replace the entire thing themselves, a Herculean task that saved them hundreds of dollars. Mrs. Frugalwoods lets her husband cut her long hair, now, too.
“The first time she asked me to cut her hair, I was like, do you really want me to do that?” remembers Mr. Frugalwoods. They watched a few YouTube videos and put their learning to the test. ”It was kind of an empowering moment. She was like, ‘Yeah, you can cut hair!”
Mr. Frugalwoods even hacked their standard-issue Sodastream so it hooks up to a 20-pound carbon dioxide tank. Annual estimated savings: $461.
Doing these sorts of things themselves — things they’re not trained to do — requires them to learn new stuff and figure it out. (Don’t ask them what they’d do without Google or YouTube.) Turns out, this has been a big source of entertainment and fulfillment.
“It’s a really joyful cycle, to gain a new skill and have an experience,” says Mrs. Frugalwoods. “It’s kind of become a game for us and we really enjoy the challenge.”
Plus, with a zero dollar entertainment budget, they’re tasked with making their own fun.
“We’ve really created substitutions for anything we used to pay for,” says Mrs. Frugalwoods. For instance, instead of paying for a date night dinner at a fancy Boston restaurant, they prepare a homemade meal together, set the dining room table (a $75 solid wood Craigslist steal) and enjoy a romantic dinner by candlelight. Afterwards, they might opt for watching PBS or a movie from the library, since they don’t have Netflix and haven’t been to a movie theater in six years.
On the weekends, you’ll find them hiking in the mountains, drinking beer and refinishing a chest of drawers they got from a garage sale or hosting a backyard barbecue with friends.
What about beloved hobbies that cost money? For Mrs. Frugalwoods, that was yoga. Instead of giving it up or going solo and foregoing the community, she worked out a deal with her yoga studio where she can take free classes in exchange for manning the front desk.
They rarely spend money on physical things, either, and when they do it’s almost never new. Most of the furniture in their house was purchased second-hand. Their “cosmetically challenged” Honda Odyssey minivan is 19 years old. Mrs. Frugalwoods hasn’t bought clothes for 17 months, even though she’s five months pregnant. (She’s gotten hand-me-downs from her sister and a few other women.) The baby’s nursery is being set up on the cheap, too.
“We’ve given up on the idea of perfection,” says Mrs. Frugalwoods. “There’s an element of whimsy to our lifestyle.”
There’s also an element of tenacity. Mr. Frugalwoods rides his bike to work year-round, saving on gas and public transit fare, which means he makes the arduous trek during Boston winters. “It turns out there is no more euphoric feeling in the world than walking into the office with your bike encrusted in ice to make you feel like a badass,” says Mr. Frugalwoods. (Boston’s last snow piles didn’t melt until July.)
Something else to know about the Frugalwoods: they like to do their research.
“Both of us are very serious planners. We don’t go into anything without considering how it’s going to work in reality,” says Mr. Frugalwoods.
For instance, the couple toured more than 270 open houses over the years, enjoying the opportunity to take leisurely strolls through different neighborhoods and snoop through other people’s homes. They also learned real estate lingo and what they were looking for in a home, which was helpful when they were ready to buy.
In 2012, the couple finally bought a house in Cambridge, taking advantage of low interest rates to nab a 3.85%, 30-year mortgage. At that point, the real estate market had taken a breather and since there were no other bidders they were able to negotiate under list price for the property. They put $60,000 down (or 13%) on the $466,000 house.
“We were careful buyers. Like in everything, we researched to death and then moved quickly,” says Mr. Frugalwood.
They even researched the type of dog they were going to adopt and settled on a rescued retired racing Greyhound. She costs $1,000 or so to feed and care for every year (a luxury, they’ll admit) but is a breed that is low-maintenance and doesn’t require extensive grooming or fancy toys.
They take preventative measures like brushing her teeth to avoid big costs down the road and don’t spoil her much — unless it’s with homemade costumes.
What is perhaps surprising about the Frugalwoods is that they don’t have a budget (“spending is like a gas: it’ll expand to fill whatever space you give it”). So, in other words, if having a budget means thinking about how much you can spend on things every month, the Frugalwoods are focused on how little they can spend.
They don’t take a calculator to the grocery store or obsessively check spreadsheets, but they do spend with almost painstaking deliberation.
“We discuss every purchase together,” says Mrs. Frugalwoods. “We were talking about buying deodorant this morning, so we do bring consciousness to even very small purchases.”
The upside? By sweating the small stuff, they have peace of mind when it comes to the big things. They could both be laid off tomorrow or lose their house in a fire and be totally fine, they calmly inform me.
They could also retire in two short years.
On retiring to the woods
The couple has figured out that they need to work until 2017, saving as much as possible along the way, in order to retire and live on their nest egg for the rest of their lives. Then they’ll snap up 20 or more acres of land in southern rural Vermont — paying in full with cash — and decamp to the homestead.
“Our plan does not demand us making any more money after 33,” says Mr. Frugalwoods. “That’s wild to say.”
The next thing he tells me is that pulling in zero income is unlikely. “I’d be shocked if we didn’t make a little money here and there.”
For instance, Mr. Frugalwoods plans to continue consulting a bit for his current company and imagines he can turn his love for welding into a side gig. Mrs. Frugalwoods is passionate about writing and might try to do some freelance writing and editing from the comfort of the homestead. Right now, she crams in blog posts at 6 am before rushing to work.
“She could very well write the next great American novel,” says Mr. Frugalwoods. “But she won’t need to worry about if the book is going to sell or not, she can just write for the enjoyment.”
In addition to interests that might be revenue-generating, there’s a ton of things the couple envisions getting to do on their own schedule. Mrs. Frugalwoods plans to tend to a robust kitchen garden so they can grow their own fruits and vegetables. Mr. Frugalwoods loves astronomy and is going to set up a an observatory. (His current job doesn’t allow him to stay up all night and sleep all day, he jokes.)
“I have a very long list that involve things that take up lots of space or lots of time,” he says.
They also plan on building a rental or two on their new property to put on Airbnb. They think southern Vermont’s proximity to Boston and NYC and its host of of tourism attractions throughout the seasons — fall apple picking, winter skiing, summer hiking, and spring maple syrup — will help them keep it rented 55% to 65% of the time. (This isn’t just a guesstimate: Mr. Frugalwoods, the software engineer in the family, programmatically scraped Airbnb for rentals in the region and built a database of properties and rates, and also collected utilization information using their unpublished but “fairly obvious” booking API, which is a computer programming interface).
This locale also puts them less than three hours away from Cambridge and the property they’ll continue to manage.
Right now they figure they could rent their Cambridge house for $4,000 a month, which is double the mortgage. Depending on how hot the real estate market stays, they think they could pull in as much as triple the mortgage.
Expenses will change a bit on the homestead. They anticipate paying for Obamacare, since they won’t get health insurance through their employer anymore. They also know starting a family will increase their expenses but by being stay-at-home parents, they hope to save on certain costs, like childcare.
All in all, with the rental properties and potentially a little income on the side, plus the generally low cost of living on the homestead, they expect to essentially break even for the foreseeable future. That will allow their retirement accounts to continue growing, untouched, for years to come.
“I do think we live what we consider a luxurious frugal life,” says Mr. Frugalwoods. “We live very comfortably and have everything we want.”