FIRE adherents are uber-savers ― they save 50 percent or more of their income ― who strive to stop working for others sooner rather than later. They aren’t interested in gaining more wealth in order to have more to spend; it’s quite the opposite. They are intent on living their best lives for less. And it starts by rethinking their relationship with money, with an eye to achieving financial independence.
Adherents keep track of their spending down to the penny and question how much every purchase truly costs them. Dollars spent are equated to “hours of life energy,” a phrase coined by Vicki Robin, the now 72-year-old co-author of the 1992 bestseller Your Money or Your Life and who has unwittingly become an idol of the FIRE movement. To paraphrase Robin’s words in a Time interview, if you earn $300 a day and want to buy a $100 pair of shoes, you should ask yourself whether those shoes are really worth nearly a third of a day of your precious time on Earth.
FIRE devotees gather in multiple forums, camps and retreats, and, of course, they write blogs, and more blogs. There is also a growing FIRE subreddit called /r/financialindependence that now has more than 365,000 subscribers. There, followers discuss strategies, techniques and lifestyles with the goal of simplifying and redesigning how they live so they can reduce their overall spending and instead save and invest their money for the future.
Success stories are celebrated, tips are shared and there is much conversation about separating needs from wants and how to find contentment with less. Those interested in gaining wealth for the purpose of excessive consumption are in the wrong subreddit, for sure.
But it quickly becomes clear reading the forum that while FIRE is a lifestyle choice, it is not one totally free of issues. Those who adhere to a “financial independence, retire early” philosophy sometimes struggle finding partners who share their values and approach to money, and are often misunderstood by family members who conflate the idea of not wanting to work until a traditional retirement date with being “lazy” or “unambitious.” Community acceptance among like-minded people seems to be one reason the subreddit thrives.
The message of the FIRE movement is this: Let’s blow up the idea that we should work for 40 to 45 years of our life before having fun and getting to do what we want. Why spend the bulk of our healthy years working for someone else?
Even if retiring at a young age isn’t necessarily your goal ― or you’re in a job that hardly pays enough to save at all ― there are lots of practical tips to take from FIRE that will help you save and manage your money. Here are a few:
1. Make saving money your default action.
Most people treat savings as whatever is left over after all their monthly expenses are paid. Reverse that and fund your savings first, said FIRE devotee Justin McCurry, a transportation engineer who retired in 2013 at age 33 and now has $2 million in investments with his house paid off.
McCurry lives in Raleigh, North Carolina. His wife retired a few years after he did, and the couple has three children. Two of them will be attending college in less than five years, an expense McCurry already has covered.
He says success all starts with your approach to spending. Here’s what it should look like, he told HuffPost: When you get paid, immediately put half of it in a savings/investment vehicle, and then whatever you have left is what you will live on.
And, yes, people living in high-rent areas like New York City and Los Angeles are going to struggle with this, he allowed. “But you really can’t spend 50 percent of your income on housing” and expect to retire early, he said.
2. Use a money tracker to know what you spend.
Just like keeping a food journal of what you eat for a diet accountability program, FIRE adherents track what they spend. You should know where every dollar goes, McCurry said.
He uses Personal Capital to track all his spending as well as all investments. It provides a summary of all income, expenses and investments on one screen ― and, yes, it is free.
3. Having a social life can cost a lot of money but doesn’t have to.
Many of us socialize around food. We eat out and drink with friends as an evening’s entertainment. It’s a budget-busting behavior, and it’s one that’s hard to change.
Newbie FIRE starters, unsure how to engage with friends in other ways, are advised to get out in front of the problem and start organizing less-expensive activities for their friend group. Hikes, bike rides, a beach picnic, board games and concerts in the park are all free. So are programs at the public library, many events at local colleges and just binge-watching TV at home with friends.
Begin by tackling work-arounds for eating and drinking out, like a potluck meal or enjoying drinks in someone’s home. Be creative: How about an Instant Pot potluck? Or a wine-tasting at which everyone brings a different bottle to find the best bargain for under $10?
If you do go out for drinks, bring enough cash for just one drink and nurse it. If you go for dinner, order an appetizer only or get a reasonably priced dinner and drink water. If a friend wants to “just grab dinner,” be ready to suggest a couple of places and talk them up as “hole in the wall” joints with great food but low prices.
If you need further motivation to cut down on dining and drinking out, just look hard at how much you spend each month at restaurants and bars. For what a glass of wine with dinner costs in a restaurant, you could likely buy a whole bottle. Apply the “what is it worth to you” question here: Is the act of having someone else pour the wine and wash out the glass really worth paying three times what you would spend if you did that yourself?
Be the one who issues the invites for less-expensive activities, advised a subreddit poster. Ultimately, the poster added, you just may need to make more friends ― ones with less-expensive tastes.
4. Do it yourself whenever you can. And if you can’t, offer to swap services.
Mow your own lawn, clean your own house, walk your own dog and make your own lunch instead of having UberEats deliver it. When you pay for convenience, you are spending money that could be saved.
Instead of paying for a ride to the airport, ask a friend to drive you and promise to repay the favor when they travel. Exchange pet sitting services. Help your neighbor’s son with his homework if he helps you paint the garage.
Learn to change your own oil, fix your own sink leak and refinish your own table.
When you change your money priorities to funding your savings first, you will have less to spend on convenience, and doing things yourself will ease the pain of paying someone to do things for you.
5. Shop just for necessities, and do it smartly.
End recreational shopping, both online and in stores. Don’t buy things just because they are a good deal; buy only what you need and will actually use. Having a bad day is not an excuse for binge-shopping.
You can borrow books from the public library for less than it costs to own them. Hit thrift stores before you buy something new. Garage sales are also great for shopping on a budget. Organize a clothing exchange with your friends or at your children’s school. Never buy new clothes for a single-use occasion, like a wedding, a ski trip when you live in a warm climate or a dress-up outfit for your child. Instead, try to borrow what you need or make due with what you already have.
FIRE followers also suggest that for gifting occasions, ask for gift cards that can be traded or exchanged. They also buy them for themselves when they are on sale or cost less than the stated value.
6. Kids don’t have to be budget-busters.
The estimated cost of raising a child from birth through age 17 is $233,610, or as much as almost $14,000 annually, the Department of Agriculture says. That doesn’t include paying for college, and it may actually be higher in urban areas.
It behooves parents to ask why kids cost so much. Who hasn’t seen a toddler play more with a cardboard box than the toy that came in it?
Without question, children will cost money. It is not surprising that in a survey of FIRE followers on Reddit, 77 percent said they didn’t have and weren’t planning to have children.
Raising your kids to be savers will do all of you a favor. They really don’t need to upgrade their phone every time Apple releases a new one, nor do they need expensive summer camps, designer clothes they outgrow in two months or the latest and greatest electronic games.
Instead, spend time with them, McCurry says, which, if you retire early, you will be able to do in spades. When we spoke to him, he had just spent two weeks volunteering at his kids’ school on a project.
“I never would have been able to do that if I wasn’t retired,” he said.
7. Yes, you can still travel ― but do so more frugally.
There is no place like home when it comes to staying on a budget. But who wants to do that when there is a whole world out there waiting to be explored?
FIRE adherents travel, and they stay with friends or relatives, do house-swaps and use discounted gift cards, for example.
“I bought $200 worth of Airbnb gift cards for $173 at Raise.com [a gift card buy/sell exchange] when they offered 10 percent off sitewide,” said McCurry.
Another reader tip is to get loyalty rewards whenever you can. Many cruise lines offer special pricing for repeat customers who join their cruise membership programs. Some use ebates.com to book travel (and shop) to get further discounts.