Set on FIRE? Here’s the first thing to do.
If you are interested in pursuing Financial Independence or Early Retirement the first step is calculate your expenses. Get a clear picture of exactly how much you spend per week, month, and year to see how much income you need to replace. There may be expenses you have now that you will not have once you reach financial independence and there may be additional expenses once you retire, but for planning purposes we are going to start with the current state. You know you can live with your current spending because you are currently doing it. Get your bank statements and credit card statements out and crunch the numbers. How much did you spend last month and how much did you spend over the last year. Do not count any money that went toward saving or investment, just expenses. At this point you do not need to go into detail about your spending, that will come later. The goal here is to get an annual expense estimate that we can use for our calculations.