“Most people start from, ‘How much money should I save?'” Steven told Business Insider. “We very much approached our finances the complete opposite, which was, ‘How much money do I need to spend to be a happy and fulfilled person?'”

For the Florida-based couple, who quit full-time work in their late 20s after saving most of their income, that number came to a maximum of $26,000 a year.

“We just asked ourselves, ‘How do we make everything as cheap as we can without making huge sacrifices?'” Steven said. “And then we found that we were pretty happy doing around $18,000 to $26,000 a year combined.”

Even when their salaries, which started below $40,000, increased over time, they maintained their lifestyle. He added: “We thought, ‘Well, there’s no reason to spend more if we make more if we’re already happy. We’ll just save extra and reach freedom faster.'”

The ‘sweep away method’: Spending enough to live a happy life and investing 100% of the excess

The Keys kept their spending within the $18,000-and-$26,000-a-year range, which comes out to about $1,500 to $2,200 a month, and “swept” their remaining income into investment accounts.

They coined their accounting strategy the “sweep-away method.” In a way, it entails paying yourself last: You figure out the minimum you need to live a fulfilling life, then sweep 100% of the excess into savings or investment accounts.

Where your money gets “swept to” depends on where you are in your financial journey.

If you don’t have an emergency fund, you might place your excess in a high-yield savings account for emergencies. Once you have enough cash set aside — experts recommend having about three to six months’ worth of expenses saved up — you might use the excess to pay down high-interest debt. When you’re debt-free, you could then sweep your excess into an investment account where your money can compound over time. 

Courtesy of Lauren and Steven Keys

The Keys keep a $5,000 balance in their checking account, which is more than enough to cover their monthly bills, and as income from their various revenue streams comes in, that balance grows. At the end of each month, “we sweep all that excess money away to a more productive investment account, leaving the checking account with a clean $5,000 baseline balance again,” they wrote on their financial-independence blog.

They said that, to work, this strategy requires you to spend less than you earn: “If you’re not yet at a point where your expenses are way lower than your income, then you need to work on that first.” But as soon as you’ve created a gap between your income and expenses, “consider ditching your budget altogether. It’s less stressful.”

When asking yourself how little you can spend each month or year without feeling deprived, Lauren said to consider the freedom you can create by living on less: “Don’t think of it in terms of, you don’t get to buy things; but, you’re buying your future back. You’re buying time and freedom versus a new car or a gadget. It’s a no-brainer when you are pitting those two things against each other.“

Tracking their net worth instead of their expenses

While the Keys have never tracked their spending, their net worth is one metric they keep monthly tabs on. Between their real-estate holdings, stock-market investments, and cash, their net worth sits just above $1 million as of February 2024, according to investment-account screenshots and property-appraisal documents viewed by BI.

“The reason we like net worth better than anything else because it captures the whole picture and encourages big-picture actions that affect your total financial situation in a positive way,” Steven said.

You might pay down high-interest debt and automatically transfer $2,000 from your checking account monthly.

“If you’re looking at how much money is in my checking account as your financial metric, that’s going to be very misleading because it looks like you just lost $2,000,” he said. “If you look at your net worth, you’ll see that that’s just a transfer of assets from one place to another. You didn’t lose any money at all. In fact, you made a smart choice in putting it somewhere where its yield is higher.”

It’s also motivating to see a number such as net worth tick up each month, Lauren added: “When we did our monthly check-ins, it really was encouraging to see how much progress we were making. It’s good reinforcement if you’re struggling to see your choices adding up over time.”