A high-earning millennial couple was in debt. 2 kids later, here’s how they’re on track to retire early.

Eman and Kristine Vergara started on their financial-independence journey in 2017.

Seven years ago, Eman Vergara came across a book that had long collected dust on his shelf. He realized neither he nor his wife, Kristine, had read it, so he dived into “Early Retirement Extreme.”

He couldn’t put it down or ignore the racing thoughts that followed. The investment banker spent all night playing with online tools, calculating their net worth. He figured out that if they saved more in their jobs — his wife was an accountant — they could retire early, or at least achieve financial independence.

The book catalyzed a realization — and a lifestyle overhaul for the Australian couple.

“We were definitely living a maximalist life, earning big incomes but spending just as big — sometimes bigger,” Eman told B-17 about their 2016 life.

The couple said they were making up to 400,000 Australian dollars. “But at the same time, we were spending most of the money that we were getting,” Eman said.

Shift to minimalism

A couple of more books and podcasts later, they turned to minimalism and cutting back on “frivolous” expenses, starting with a two-bedroom central Sydney apartment that cost AU$5,500 a month.

They sold their car and picked up rentals as needed, swapped brand-name supermarkets for Aldi, and cut back on travel and dining out. The lifestyle changes allowed them to pay off AU$24,000 in credit-card debt and about AU$26,000 in student loans.

The couple moved from saving 50% to 60% of their earnings in their first few years of minimalism to as much as 75% after moving from Sydney to Toowoomba, a city close to Brisbane, where the cost of living is lower than in big Australian cities. They bought a car after the move.

After about a year of focusing on debt repayment, they started fully investing their savings, Kristine said.

They have a combined net worth of about AU$3 million, or about $2 million. This is the couple’s portfolio breakdown:

• Property in Australia and the Philippines: AU$1.5 million

• Stocks: AU$900,000

• Superannuation account, a mandatory retirement plan in Australia: AU$500,000

The rest of their portfolio is in cash. B-17 has verified their net worth and breakdown.

FIRE with children

The couple have two children under 4 years old.

Since they started working toward financial independence, the Vergaras have had two children: a 3-year-old daughter and a 6-month-old son.

The early motivation behind moving to a more frugal lifestyle was having more autonomy — not being tied to a job or mortgage, and traveling as a family before their children are old enough for school.

“We want to raise our children as global citizens,” so they can have friends all over the world, Eman said. “That, to me has been the driver of coming onto this journey.”

Kristine retired from her full-time accounting role about three years ago, and Eman works in funds management with a flexible working arrangement. The couple refer to themselves as “coast FIRE,” a type of Financial Independence, Retire Early scenario in which a person saves up enough money for retirement and needs to make only enough money for ongoing expenses, which for them is about AU$120,000 a year.

Eman, 38, plans to take a sabbatical when he turns 40 and eventually travel nine months of the year while homeschooling the children. They already take about 12 trips a year and are hoping to increase their travel expenses to 40% of their income, from 35%.

Their expenses have increased since having children, primarily for their toddler’s extracurricular lessons and flight tickets. But they continue to save where they can, including using hand-me-down toys and clothes.

Their location helps, too.

“The health system is amazing, and I think this is a key nuance between Australia financial independence and American financial independence,” Eman said. “Health insurance is just not even something that we think about.”

Raising kids with a hunger for work

Eman and Kristine enjoy traveling with their kids.

Since they plan to be partially or fully retired in the next few years, the couple have strategies meant to ensure their children understand the value of work.

“We certainly don’t want them to see their parents just sitting at home doing nothing,” Eman said about his plans to work part time and volunteer.

“You want to raise kids with that hunger for an ambition,” Eman said. “I know what it was like being a first-generation migrant to work hard to succeed in my career and then be able to understand the power of compound interest and saving to be in a position where I am right now.”

Kristine said it was important to her that the children be involved in volunteering and community work and pick a trade skill from a young age.

There are three main money lessons they want to teach the children: saving at least half of their income, putting savings into an investment that allows compounding, and staying away from credit cards.

“I know people do credit-card hacking, but it’s just the temptation of having that card,” Eman said, referring to credit-card points and miles. “We simplified by just cutting all our credit cards when we found financial independence.”