A moment of reckoning
In January of 2020, I found myself renting an expensive apartment, spending a fair amount of money on food and gear, and dumping money in to my truck more often than I wanted to. Up until that point I’d maintained a story that I was living a modest, frugal lifestyle, and the reality I found myself in didn’t match up with that. Cognitive dissonance sucks, and I had a small freak out moment.
Dimly remembering a book about frugal living I’d flipped through years ago, I searched back through my ebook reader. Ah. There it is: Early Retirement Extreme, by Jacob Lund Fisker.
The gist of the book is that through 'extreme' frugality, developing useful skills, and a systems design approach to your life, you can save around 85% of your income and retire comfortably in five years.
The "retire in five years" part isn't actually the point of the book - Jacob put that in as a "carrot" to entice people to his system. Financial independence is merely a side effect of the ERE philosophy (so, as a note to any colleagues who might be reading this, I have no intention of quitting my job anytime soon).
The point of ERE is to live an ecologically sustainable, socially just lifestyle that is adaptable to economic, political, and climate instability. In other words, ERE is the answer to the question "How can I, as a middle class Westerner, run my life such that I'm not a net drain on the world/society, protect myself from the risks of societal dissolution as much as possible, and maximize my autonomy?"
It is this true intent behind Jacob's work that led some to start calling it "Emergent Renaissance Ecology", rather than "Early Retirement Extreme", and the former is the definition that I have in mind when I write the acronym ERE. The concept of retirement is almost entirely irrelevant to me.
ERE is a map, not a set of instructions. By that I mean you will not find a step-by-step prescription or set of tips and tricks for how to "do" ERE. You will find, mostly, philosophy and strategy - an intellectual framework for how to construct your own set of instructions unique to your own life that are in alignment with your own values. It is not a light read — there are differential equations in the section on skill acquisition, to say nothing of the short chapter in the back about financial matters — so it’s not for everyone, but I ate it up.
Despite Jacob being allergic to the idea of linear lists and prescriptions, I want to format this reflection on my first year as a prescription for myself, if I could go back to January and give myself some advice based on what I know now. This list may or may not be useful to anyone else, and it should not be taken as “the ERE way”. It’s just a set of realizations relevant to my journey that it would be nice to time-travel back to January and cheat my own progress.
The Big Three
The first step in frugality is always to optimize the big three - housing, transportation, and food. These are anyone's biggest expenses. The standard example is to move somewhere close to work and a grocery store, so you can sell your car and get around via bicycle.
My situation is a little different, because my house has wheels on it, so transportation and housing are tightly coupled for me. In January, the big move was to escape my expensive apartment, which I promptly did by the end of February.
I could have optimized food earlier - I stopped going out to eat, but my grocery bill was still quite high. It wasn't until September that I seriously focused on getting my grocery bill under $200, and it was easier than I thought.
#nobuy
The next step is to stop spending money on anything that isn't food. I didn't do a "#nobuy" month until February 2021, and I wish I'd done it sooner. It changed my brain in profound ways. I didn't realize just how deeply I was programmed to assume that the solution to all of my problems involved buying something.
This step implies stopping hobbies that are expensive, and ceasing the consumption of things that weren't doing you much good anyways, like Netflix. This step is very related to a Cal Newport style Digital Declutter, which I’d recommend to myself doing at the same time. The point of it is that it should free up a bunch of time and space in your life (and mind), giving you an opportunity to gain perspective on your life and intentionally choose how to spend your one precious shot at life on this void-hurtling rock.
Diversify your essential skills
With the extra time you have, since you stopped doing anything that costs money, focus on learning useful skills, starting with essential activities. Gaining broad skills is a core principle of ERE, but this "starting with essential activities" aspect only recently clicked with me. There are things in your life you can't avoid, like eating, sleeping, and talking to other people, so engage in those activities with a high degree of intention and focus on mastery.
Cooking is a perfect example. Everyone has to eat; might as well get really good at it. You'll have more free time because you stopped a bunch of inessential activities, so you can spend time learning the principles of good cooking. You also might struggle at first with stopping activities that you used to use to "reward" or "indulge" yourself; learning to cook tasty food is an excellent way to “reward” yourself in a healthy way that encourages skill development.
Personal finance is another no-brainer. You'll be saving >50% of your income, so you have to come up with something to do with it. Index investing is a common answer, but there are so many options: dialing in tax-advantaged accounts, possibly doing a self-led curriculum in economics and investing, getting into microlending and peer to peer investments, and self development and entrepreneurial endeavors.
Self-development is another obvious essential. You're always stuck with yourself and your own thoughts. Devote time to reading and introspection. Try to work on sensitives, insensitivities, mental "bugs", old baggage, emotional wounds. Get curious about why you do what you do, and seek to understand yourself better.
Interacting with other humans is another thing you can't avoid, even in the midst of a pandemic. Whose life wouldn't be improved by developing skill and fluidity with other people? Whose relationship with their significant other wouldn't be improved by implementing a weekly check-in? Everyone can benefit by reading Non-Violent Communication, Cialdini's work, or any number of well regarded books on cultivating healthy relationships.
Deprogram Yourself
The final bit of advice I'd give my old self is to keep in mind that mostly this early process is about unlearning. It takes a while to unlearn the idea that you solve solutions by buying things, that if you want to spend quality time with your friends you need to go to a restaurant, that you "need" a car, or that watching shows is the best way to relax. Adopting practices and then trusting the process, leaning in to the discomfort, and maintaining consistency, is how to literally change one's mind.
To summarize:
Optimize the big 3 - housing, transportation, and food.
#nobuy and Digital Declutter, as these go hand in hand.
Focus on learning essential skills to become a more broadly competent and self-aware human.
Remember, it's mostly about unlearning. Be consistent and put in the time.