Before getting married and becoming a parent, Kiersten Saunders says the best way to describe her early relationship with money was "misplaced abundance." "I felt like there was a ton of money in the world, and I just needed grab my piece of it," she says. "So I focused a lot on earning."
The problem was that she was spending at a rate that was twice as much as what she was earning. Saunders spent her 20s thinking that making money was easier than managing it, so she racked up consumer debt and was living paycheck to paycheck. When she met her husband, Julian, in 2012, shortly before she turned 30, she was dealing with maxed out credit cards. Julian was the complete opposite when it came to money. "He was already very fiscally responsible," says Saunders.
Their first money conversation turned into a full-fledged argument. "He found out that I had put a vacation that we took together on a credit card and really had no intentions of paying it off," she notes. "And he told me that if he had known about my credit card, that he would have never dated me. And so that led to a breakup, but then we eventually got back together and had some real conversations about money."
Julian introduced Saunders to the FIRE movement (Financial Independent, Retire Early), a program that encourages devotees to save up to 70 percent of their income in order to retire well before the age of 65.
Soon, Saunders had reformed her financial habits, cut her rent in half, and started paying her debt off. In 2015, the couple tied the knot. "We were really looking forward to the next chapter in our lives," says Saunders.
But on their honeymoon in South Africa, the newlyweds soon realized how much their current careers were curbing their ideal plans. "We wanted to take vacations that were months long, and we wanted to travel on Tuesdays, and we wanted to be able to sleep in and eat breakfast every day," says Saunders.
The pair, who has one child together, began to feel there was more to life than what they were experiencing in their day-to-day in the United States. They also realized they had more money than they thought they did, thanks to the exchange rate from U.S. dollars to South African rands. "[We realized that] we have enough money right now to live a happy life," says Saunders. "We just need to give new purpose for our income. And that purpose was going to be retiring early."
They decided to start working toward their goal as soon as they returned from their trip. From 2013 to 2017, they paid off $200,000 in debt, including auto and student loans, credit card and tax debt, and a mortgage. "Then, we would continue to take the same amount of money that we were throwing at our debt every month and just invest it in different vehicles," explains Saunders. "The ultimate goal was save up [about] $1.2 million dollars in a stock portfolio and to throw 67 percent of our monthly income into low-cost index funds until that amount amassed."
The couple aimed to retire and live off of a percentage of their portfolio, as well as rental property income, in the near future. In 2017, they welcomed their son Beau, and Saunders found that being torn between her corporate work and motherhood left her feeling even more dedicated to saving, investing, and accelerating the journey to financial independence. That same year, they began sharing their goals and experience on a website called rich & REGULAR, which they founded to inspire better conversations about money.
"When our son was 6 months old, we had just paid off the mortgage in our primary residence, and we were really excited to tell the world about the FIRE movement," says Saunders.
It's all paid off. Earlier this year, Saunders left her corporate job to become a full-time, six-figure entrepreneur with multiple streams of income, a large part of which revolve around content creation.
She has also committed to shifting perceptions in order to address the racial wealth gap. "I think the media has done us a disservice by only showing certain versions of wealthy Black people," says Saunders. "They're either all athletes or they're Oprah, or they're the Obamas. What we're trying to do is create a narrative and an image of what that looks like so that Black families can aspire to be rich and regular instead of rich and famous."
Here Saunders shares her best tips for saving and spending in order to achieve financial independence—and maybe even retire early.
Steer Away From Linear Thinking
When you're talking about investing or a portfolio, says Saunders, money won't grow at the same rate as a salary. "It can double every seven years depending on what you're invested in," she says. That's why she advises breaking away from a linear timeline and focusing on your own. The same is true for entrepreneurship, which gave Saunders a new perspective. "It broke me out of the idea that money has to come in every two weeks," she says.
Saunders explains that a linear model also contributes to the racial wealth gap: "Data shows if you're Black and working, the likelihood that you're going to become wealthy off of your salary is slim to none." In fact, according to a recent study by McKinsey & Company, Black Americans can expect to earn up to $1 million less than white Americans over their lifetime.
That's why Saunders encourages people to focus on net worth, or the value of assets a person owns, minus liabilities. "We always say net worth is the only financial metric that matters, regardless of what salary you make," she notes.
Be Mindful and Intentional
While the FIRE movement might have very specific rules of thumb, Saunders encourages people to simply be mindful and intentional about their spending. And that doesn't mean you have to forget about things you enjoy. "There are lots of things we didn't sacrifice on," she notes. "I didn't sacrifice on travel—that's still really important for us. And I can't drink cheap wine."
Instead, the couple has found ways to save money on travel through points and discounts while being conscious of purchases. "Before we buy something, we question why it is that we're buying it and try and address it at the root," says Saunders.
Find Where You Can Save at Home
Because her husband is a former chef, Saunders says Julian has a way around the kitchen that has helped them save on mealtime. "He was able to figure out the right systems and meal prep and meal planning and management of food to be able to not have to eat out all the time," she notes. "There's a lot of things that you can do at home to elevate your experience from just investing in better glassware and plates and lighting a candle and turning on music and just having more fun."
This is something that Saunders says a lot of people have especially been learning through the pandemic. "Your home can also be a place that cultivates joy," she says. "You don't have to leave to have a good time."
Build a Supportive Circle
Financial success is largely determined by the people you surround yourself with, says Saunders. "For us, a lot of the questions that we get are around how did we get our family on board or how do we deal with friends? Or how do we say 'no' to going to events that we didn't budget for?" notes Saunders. "How do we not give gifts every year?"
The answer: Being in a community with people you relate to can help normalize certain financial habits so that they feel easier. "It's about creating a new normal and helping people connect with other like-minded people who are pursuing the same goal," says Saunders.
Have a Purpose for Your Income
Saunders' best advice for people who want to become financially independent and retire early? Realize that your budget is not the same thing as a purpose for your income. "They're complements, but they're not the exact same thing," says Saunders. "Establishing a purpose for your income, whether it's financial independence or more choices, is critical. Because if you don't give your income a purpose, somebody else will."