A couple who live off $7,000 a year share the exact budget sheet they use en route to early retirement

• Shannon and Sergio are on the path to join the FIRE (financial independence/retire early) community.
• Each of the past two years, they only spent $7,000 while traveling the country full-time.
• They shared their savings strategies with Insider, from house-sitting to travel-hacking.

You might want to take a page out of Shannon and Sergio's budget playbook.

For each of the past two years, they lived off just $7,000 ($3,500 each), all while traveling the country full-time. The budget is part of their journey to join the FIRE (financial independence/retire early) community.

The couple, who are in their late 30s and early 40s and declined to give their last names for privacy reasons, have been aspiring to retire early since the mid-2000s. Sergio, who works as an independent IT consultant, began his path to financial independence in 2006 and introduced Shannon, who works as a program management and corporate training consultant, to it in 2007 when they met. They've been saving ever since, documenting their experiences on the blog Screw the Average.

"We're incredibly fortunate to have very similar financial philosophies, instead of constantly being at odds with each other over how each of us spends money," they told Insider.

Depending on the month, they said, they tuck away 75% to 85% of their income. The chart below shows a breakdown of their $7,000 budget in 2019 and 2020, the latter of which they said wasn't affected by the pandemic.

And here's how that breaks down by a monthly average.

Shannon and Sergio shared with Insider the key strategies they used to cut their expenses over the past two years.

House sitting, travel hacks, and self-control

Housing
Housing is usually the largest budget line item, but Shannon and Sergio don't own or rent. Instead, they house-sit full-time, in which they typically take over housing responsibilities while a homeowner is away in exchange for free lodging. Currently, they told Insider they're house-sitting in Carlsbad, California.

In between house-sitting, they fill in gaps with hotels and Airbnb stays, which they said they often nab by employing travel-hacking via miles, points, and promotions. That kept their lodging under $300 annually in both 2019 and 2020.

Travel and transportation
Shannon and Sergio also don't own a car, choosing instead to take public transportation or walk. When traveling by plane, they once again break out the travel-hacking, using airline miles and, when possible, the Southwest Companion pass for 2-for-1 flights.

In a blog post, they called it "one of the best travel-hacking tools in the industry." They said it helped them save over 60% when booking a cross-country flight in 2019.

Food
Food is typically the second-biggest budget line item after housing, they said. But they managed to spend only $82 eating out in 2019 and $22 in 2020 (the latter likely due to the pandemic).

"We limit our eating out, but when we do it we like to do it for the experience and great conversation with friends and family, rather than just having a meal," they said.

In both years, they spent around $150 a month on groceries. They said they keep their grocery budget low because they eat "very little meat" and buy in-season produce. "Our goal, while not always possible, is to keep it at a $1 per pound or less," they said.

They also practice intermittent fasting for 18-plus hours a day, which they say makes them feel better. This means they're eating one, very large meal a day.

But they also have some extra help in the food department: Sometimes the homeowners they house-sit for offer them meals and groceries, and Shannon's company provides a per diem when she's traveling for work plus meals in the office when she chooses to work from there.

Medical
After running the numbers on their health insurance plan in relation to their medical needs, Shannon and Sergio found it's less expensive for them to pay out-of-pocket costs than higher premiums.

"Because we're both relatively healthy and don't (fortunately) have debilitating health conditions, we're able to purchase a high-deductible health plan that has lower monthly premiums," they said. Their medical budget also includes supplemental medical expenses, such as cold medicine and prescriptions.

Goods
Ultimately, Shannon and Sergio prefer to focus on experiences rather than material items, they said.

When purchasing items such as business expenses, they said they look at how they can stack promotions to get the best deals, from credit card offers and cash-back portals to sales and clearance items. For example, they once combined a sale with a Chase Offer and a TopCashback offer to save over 40% on upgraded Samsung SSD's (hard drives) for our laptops.

Self-proclaimed minimalists, they rarely buy clothing, only replacing it when it's well worn and beyond repair. When they do buy clothing, they try to purchase it secondhand but are willing to spend more on well-made, durable products that won't need to be replaced as often - like their backpacks, which they said are still in great condition four years later.

"We ask ourselves, can we do without, can we postpone, or can we find an alternative instead of immediately buying something we need," they said.

A few years away from FIRE

While some of Shannon and Sergio's budget categories, like medical expenses, business expenses, and groceries, increased in 2020, they were offset by less spending in other categories, like travel and personal care.

"The pandemic has affected the amount that we travel and move around, but because we utilize travel-hacking whenever possible, we've been very fortunate that the pandemic didn't really increase our expenses or make our lifestyle harder," they said. In some instances, their house-sits in 2020 were actually extended.

Shannon and Sergio hope to match, if not best, their expenses from the past two years in 2021. With budgets like these, they're a few years away from achieving their version of FIRE, which they said is less about formally retiring and more about having options and the freedom of choice in our lives.

"We're simply not the type to stop working in all capacities, as we enjoy what we do," they said. "Instead, we want the freedom (via financial independence) to not have to work, if we don't want to. For us it's about choosing when we want to work, who we want to work with and how much we want to work."