Being a single mum isn't stopping Serina's path to early retirement

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If you believe retirement only happens when you reach your 60s - and you want to retire earlier - then read on.

We've interviewed seven Aussies who are working towards financial independence, early retirement.

Welcome to the FIRE movement.

serina bird early retirement fire joyful frugalista

Serina Bird, 45
Aim: retire at 50
Income needed: $40,000
investment strategy: properties that could potentially be short-term rentals; passive investment in Vanguard funds; Acorns investment platform. 

Some "frugaleers" eat up the challenge of finding better, cheaper ways of doing things. They see it as liberating, not a deprivation.

Take Serina, also known as Ms Frugal Ears through her website. She is a single mother with two young boys who likes to take on budgeting challenges such as keeping her grocery bill down to $50 a week, including cleaning products and toiletries. She did it for a year.

"Yes, it is achievable. No, I am not starving," she says. "But it does help me pay half of my annual mortgage and it does dramatically reduce the amount of food waste."

Serina insists her frugal lifestyle is a fun and empowering choice. She blogs about it on her website msfrugalears.com.

"Life is abundant. And when you respect and understand money, it almost magically transforms itself into something that grows and grows and grows. In financial terms it is called compound interest," she says.

Serina took on the $2-a-day challenge to live below the poverty line for five days.

"I cook meals that cost less than $5, I do a lot of home fermenting and pickling, I cycle to work, I'm about to sell my car and most of my clothes are free or from an op shop."

She negotiated a better deal on her electricity just by asking for it and ditched her credit card. She makes her own kombucha for 10c a litre instead of paying $7.95 for a 750ml processed version at her local supermarket. She even forages for wild food such as salad greens and blackberries.

Her lounge room is full of things that have a frugal story: the lounge set from the Salvos; artwork by a talented high school student friend and from garage sales; the free bookcase from someone in her Buy Nothing Project group.

She says it is important to acknowledge that we don't really need too much stuff. "Most of it is just unnecessary clutter."

Serina says her divorce set her back on her goals but she is rebuilding. She has taken on students in a granny flat (when she lived in a house) to boost her income.

To cut costs and get fitter she has moved into an inner-city apartment, in spite of expensive body corporate levies. But it was a lifestyle decision; it reduced her car commute and has allowed her to cycle to work.

"I offset some costs through energy and transport savings but the big reason for the move is that I believe it will add years to my life as it allows me to be more active."

But Serina insists she also budgets for plenty of fun, including cruises, skiing and going to concerts. She loves family holidays, searches for bargain airfares and likes affordable Airbnb-style accommodation.

She has always practised "paying herself first".

"Each fortnight I was making 10% additional payments into super. I am a public servant on a defined benefit scheme, and a feature of that is that after 10 years' employment my work will match additional contributions up to 10%. So it made sense to do that."

She doubled her mortgage payments each fortnight. "Then any additional savings went onto my mortgage. For instance, if I stood in line for a coffee and then decided not to buy one, I would go back to my desk and transfer that $4 to my mortgage. That was my way of incentivising savings."

The key to saving more, says Serina, is to keep a record of what you spend. "Just like going on a diet, saving is about all the little habits you have." She likes micro-savings apps like Acorns. "It is a great way to see how little bits add up."

Serina likes to invest in property for income and capital growth. She has two investment properties and plans to accumulate more to put on Airbnb.

While it has worked for her, she admits property income can be uneven.

"A complication with the budget is that I have investment properties. Although I have factored in rents and indicative costs, the costs are unpredictable. It is difficult to be precise but I factor in more outgoings just to be safe."

To provide a stable income, she is beginning to build up passive investments in Vanguard index funds.

Serina loves her full-time job but in retirement she would love to have a balance between doing more writing and pursuing her entrepreneurial ambitions. She hopes to transition to part-time work.

Tips
- Mr Money Mustache, The Simple Dollar and Simple Savings websites.
- Noel Whittaker's books; articles by Paul Clitheroe and Suze Orman; The Australian Financial Review.
- Barefoot Investor for Travellers Facebook group.

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.