Frugality Buys Freedom: How and Why I Quit my Corporate Banking Job

Frugality Buys Freedom: How and Why I Quit my Corporate Banking Job

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Cody

Founder at Fly to FI
Cody is a personal finance junkie who constantly tracks his net worth with Personal Capital.

He also runs Side Hustle Courses that teach others how to make $$$ outside of their day job through blogging, Etsy, and freelancing.
Cody
Hit me up!

This post was first published on RockStar Finance. Some minor edits have been made to accurately reflect the timeline.


I was 7 months into my first corporate job and I just couldn’t take it anymore — the long commute, the unfulfilling work, the lack of autonomy. This couldn’t be what the next 40 years look like, could it?

Trust me, I had heard the “welcome to the real world” spiel from every single family member, friend, colleague, random guy on the street … you name it. Unlike them, though, I believed that there was more to life than sitting behind a computer for 40+ hours per week. There had to be!

Fortunately, I found a way out by combining a few fundamental concepts: frugality, intentionality, and entrepreneurship. These lifestyle choices put me in a position to quit my corporate role and pursue my passions. Once you understand the options that frugality buys, your possibilities are endless.

Where Did My Money Journey Begin?

I grew up in a middle-class family in a small town in central Massachusetts. I was extremely fortunate that both of my parents were decent with money and taught me the basics of saving and investing.Cody Berman Headshot

From an early age, I quickly became obsessed with money. I wanted to know how to make more, save more, and invest more. Seeing the numbers in my bank account increase by $5, $10, or $20 gave me a rush.

All throughout grade school, middle school, and high school, this same mindset consumed me. How could I maximize that number in my bank account?

It’s probably no surprise to you that I chose my college major through the following process:

  • Google “What major has the highest income potential with a Bachelor’s degree?”
  • See ‘Finance’ on the screen
  • Run with it

This was it. I was going to be an investment banker on Wall Street raking in a handsome $150k my first year out of college. I was going to be rich!

During my first two college years, I reached out to nearly 400 finance professionals on LinkedIn and kept a diligent Excel spreadsheet to track each interaction. It was insane. I studied hard, participated in extracurriculars, networked A TON, and was fortunate to land internships after both my freshman and sophomore year.

Everything was going according to plan… then suddenly, it all changed when I discovered the FIRE (Financial Independence, Retire Early) movement in the first semester of my junior year.

Time > Money

What in the world was I thinking?! I was ready to give up 80+ hours of my week trapped behind a desk for what? The money? What good was money when I didn’t have the time to do any of the things I enjoy?

Time and Money

After immersing myself in transformative FIRE-related content, I quickly realized that time was our most valuable asset, not money. Money was just a tool to help us design and craft our ideal lifestyle.

You’ve probably heard the adage “nobody actually wants a million dollars; they just want to live like a millionaire”. This is true on the deepest, most fundamental level. Most people want the freedom to travel, spend time with family, live care-free and all of the other benefits associated with the millionaire lifestyle – not the pile of cash.

Unfortunately, freedom and exorbitant wealth are too often conflated and people end up spending 40+ years stuck behind a cubicle “chasing the dream”. Life doesn’t have to be this way, but media-inspired consumerism has been trapping millions of people for many decades.

Consumerism is the enemy of freedom.

Choosing Life Over Money

At the time of my FIRE discovery, I had already received multiple offers for investment banking internships and other high-caliber finance positions. Most of these positions would have set me up for 80-90 hour workweeks and all-in full-time compensation between $100K and $125K. Sounds nice, right?

Despite the cushy pay, I would have little to no time for the things that I truly value like family, relationships, and travel.

I ultimately decided to reject all of these offers and accept a lower-paying corporate banking position with a better work-life balance. Needless to say, everyone told me I was an idiot.

I worked for three months in that internship and received a full-time offer at the end of summer. Although I certainly didn’t love sitting behind my desk for 8+ hours, I thought the job was tolerable, so I accepted.

Planning My Escape

During the final two years of my college career, I started side hustling like crazy. I knew that if I wanted to escape the corporate lifestyle, I needed to diversify my income streams. I also knew that I would need to save as much money as reasonably possible in order to build a financial runway.

By the time I started my full-time job, I had co-founded a disc golf company and launched a financial independence blog and podcast. Although these were only earning a few hundred dollars per month, the income diversity laid the foundations for my escape.

After the W2 paychecks started to roll in, I was able to save between 80 to 85% of my income. This was made possible due to a variety of intentional choices that drastically reduced my cost of living.

A Look into the Numbers

To give you a better idea of my actual finances before quitting, I’ll break down my monthly spending and income streams.

Monthly Spending

Housing: $0/month. After graduation, my mom let me move back into the house. This was by far the most powerful expense-reducing choice I made. It has saved me thousands of dollars! (Edit: FYI — for those who think this is the only reason I was able to quit my job, I was paying $350 for housing + utilities for the two years prior to moving back in. The housing wouldn’t have made much of a difference.)

Auto/Transportation: $600/month. Each month I paid $360 for a monthly train pass into Boston (the commute was brutal), $120 on car insurance, and around $120 on gas.

Although this seems high, it was much more cost effective than driving into work which would cost about $300-400 on gas per month, $120 on insurance, $280 in tolls, and between $200-400 for parking. Yikes.

Food/Alcohol: $300/month. I was able to eat well on $30 per week through intentional grocery shopping. I would typically load up on chicken when it was on sale ($0.99 or $1.49 per pound) and then supplement each meal with a bunch of veggies. Personal hygiene items are included in this category (e.g. deodorant, toothpaste, razors, etc.).

The remainder of the $300 is typically spent on going out to eat and alcohol. I could cut this out completely if I wanted to, but I choose not to give them up for the social benefits.

Travel/Discretionary: $200/month. I love to travel. However, I hate spending money. I discovered the best of both worlds when I learned about travel rewards and now I can travel the world for nearly free.

My discretionary spending is rare at best. Around the holidays is the only time I will purchase a non-essential material item. I’d rather put my money toward freedom!

Total Monthly Expenses: $1,100.

Income Streams

All income streams are after-tax for simplicity.

W2 Banking Job: $4,800/month. Working in corporate banking definitely helped to accelerate how much financial runway I can build in a short amount of time.

Side Businesses: $800/month. Between the disc golf company, blog, and podcast I was able to earn an average of $800 per month.

Freelancing/Miscellaneous: $250/month. Most of this income was from random side jobs and projects I pick up throughout the year. Although this varies drastically from month to month, I converted my annual 2018 earnings into monthly figures for this analysis.

How Much Can I Save?

Total Monthly Earnings – Total Monthly Expenses = Total Monthly Savings

$5,850 – $1,100 = $4,850.

Since my annual expenses were around $13,200 per year, I was able to save a full year’s financial runway in approximately 2.8 months. Let me show you how this intentional frugality drastically accelerated my ability to build a financial runway.

Income: $5,850 * 12 = $70,200

Expenses: $13,200

Gap: $70,200 – $13,200 = $57,000

Time to Build One Year of Financial Runway: $13,200 / $57,000 = .23 years (2.8 months)

 

Imagine now, that I spent $60,000 per year on average. If my income remained flat, it would take me nearly 6 years just to build up one year of financial runway!

Income: $5,850 * 12 = $70,200

Expenses: $60,000

Gap: $70,200 – $60,000 = $10,200

Time to Build One Year of Financial Runway: $60,000 / $10,200 = 5.88 years (70.6 months)

Frugality is a powerful tool once you understand how the numbers work.

The Current State of Affairs

Let’s bring this back full circle. On January 14, 2019, I put in my notice to quit my corporate banking job. My final work day was January 31st.

Since I started, I was able to save around $30,000. This is equivalent to nearly 2.3 years of annual expenses… frugality can truly buy freedom!

Let’s compare this situation to alternate scenarios with higher annual expenses.

Financial Runway with $30,000

Even if I were to move my annual expenses up to $20,000 per year, this would reduce my financial runway by more than 9 months! At $30,000 in annual expenses, I’d be cutting my financial runway down to only one year!

Since I planned to keep my expenses somewhat consistent (~$13,200 per year…or less), I created 2.3 years of financial runway to pursue my entrepreneurial ventures. In the worst case scenario where I earned a total of $0 pursuing my passions, I could always return to the corporate world.

But again, none of this would be possible if I spent every dollar that I earned. Understanding the connection between frugality and freedom is instrumental in designing your ideal life.

How Can Frugality Buy You Freedom?

I didn’t write this post to brag about how little I spend and how much I can save. I shared my story because I want to show you what is possible.

A recent Forbes study revealed that 70% of Americans either dislike or are actively disengaged with their jobs. But life doesn’t have to be this way! If you can save 1, 2, 5, or even 10% more than you are currently saving, you can vastly increase your financial runway and options in life.

Your financial life is a constant tug of war between your freedom and your spending.

Spending and Freedom Tug of War

Every single dollar that you spend pulls against your financial freedom, and every dollar that you choose not to spend expedites that freedom.

Regardless of your age, sex, race, marital status, religion, and a host of other factors, there is some way for you to reduce your annual expenses. Whether it’s downsizing your home or cutting out your weekly Starbucks coffee, every dollar you save buys you freedom in the future.

Are you willing to push back against consumerism and buy back your most valuable asset: time?


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Note: I am not a financial advisor or fiduciary. All the information presented in this article reflects my opinion. I am not liable for any financial losses incurred related to this content. My content is always written with the readers’ best interests in mind. I believe that my content is helpful and well-researched, but it is not professional financial advice. For more information, read our Privacy Policy.

10 thoughts on “Frugality Buys Freedom: How and Why I Quit my Corporate Banking Job”

  1. If some of your monthly income is passive income, even that wont go away though you stopped working- so that will make your cushion go even further. When the government was shut down and my agency was possibly also going to be closed, I did a calculation of how long my savings would last (if I had to use it to pay for everything) 21.75 months. If my husband is still working, 145 months. or 12 years. That’s not even touching any of my investments. I’m astounded at how few people look at their savings in terms of how long it would last them. At a meeting with a director of a regional office, he hadn’t even ever thought of his savings and retirement in terms of months it would support him.

    • Wow. Yes, it is truly astounding how some other people think about their finances. It’s great to hear that you understand the power that savings can give you. Often times, people will ask me why I “deprive myself” and live on so little… when in reality I am using my money to buy myself freedom. Thanks for reading!

  2. Wow Cody! What an incredible story – and you’re still a “baby”! (Not really, just my middle age mom self talking…) Seriously, you should be VERY proud of what you have accomplished at such a young age – I’m sure your parents are bursting with pride as well! I look forward to reading more and seeing how your adventure continues. 🙂

    • Thanks so much, Tracy! It’s definitely an exciting time in my life and it’s all possible due to understanding how frugality can buy me freedom. Thanks for reading!

      • You are amazing! Such insight and understanding! I would love to see you develop a program for high school students. Kids today know nothing of personal finance.

        • Thank you Karen! I definitely want to reach as many high school and college-aged kids as I possibly can. I’ll definitely get an awesome head start on my road trip. 🙂

          • That’s awesome Cody. I listen to you on your podcast and wanted to see how you started and found this article. It’s really cool because I’m doing the same thing but a bit different. I’ve been paying off a lot of debt this past year and saving all I can even moved back with my mom. My plan is to quit my job and move to Mexico and benefit from the low cost of living and make my savings go a long way. I will be hustling to make some income but be able to give it all my attention and focus and learn and grow as a person. Thanks for all your content.

          • Hi Dennis,

            That sounds awesome, man! Would love to hear once you make the transition. Maybe even a guest post if you’re up for it. Best of luck with everything going forward and I hope to hear from you again soon!

  3. The most valuable asset is time for sure. Spending consciously and intentially is key. The clients I help to reach FIRE all want the same thing: more time and freedom to do what they want. Not a bigger house. Not more toys. They want actual time. Ironically, I find that since I retired early at 36 back in 2015, days go by much faster when you have more time. Days just fly by. I’m curious whether it’s the case for you.

    • Fortunately, I haven’t felt that yet. Probably because I’m so busy with the Financial Freedom Book Tour and all of my other side hustles. I guess I’ll have to circle back in a couple of years to see how my perception of time has changed.

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