Let's say I manage to cut our spending by a lot. Is it possible, with our current situation, to grow a big enough mustache so I can retire way before 65?
Yup! Totally possible. It's just math. Save up 25-33x your annual spending needs, and congratulations - you can live off your 'stash.
One of the amazing things about cutting your annual spending needs to save more money: You will get better at spending less. So the money that you DO manage to save will last further.
Example:
You have savings of $10,000.
Every month, you save $100. You spend $2,000.
Your savings rate is $100 / $2,100 = 4.7%.
You are adding $1,200 to your stash each year.
You currently have savings sufficient to live for $10,000/$2,000 = 5 months.
At the end of 1 year of saving this way, you will have $11,200. Your stash will have increased to 5.6 months worth of expenses, for an increase of 0.6 months.
Now let's say you find a way to cut 10% from your spending budget, and you apply it all to savings. Your new figures:
Every month you spend $1,800.
Every month you save $300.
Your savings rate is 14.3%.
You are adding $3,600 to your stash each year.
At the end of 1 year of saving this way, you will have $13,600. Your stash will have increased to 7.56 months worth of expenses, for an increase of 2.56 months. Holy freaking multiplier, that is a big difference - more than 4 times as much as your prior savings rate.
This is because your amount saved is higher, but your monthly spending requirements are also lower.Learning how to decrease your spending has a huge multiplier effect. Not only are you saving more money each month, but the money that you do save goes much further.
At your current savings levels, you are correct in that it will take you forever to save anything substantial. But start poking around the site and the forums, and I bet you that you'll find a way to trim your budget by 5% before you know it. As your saving muscles grow, suddenly 10% will seem do-able...then 15%...then 20%...