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How to Achieve FIRE Without Being Miserably Cheap

The concept of FIRE—Financial Independence, Retire Early— is pretty straightforward. If you can save up enough money when you’re young(er), you can have a ton more flexibility later in life. You might choose to quit your job and start a business, or unload your house to travel the world. If you can save, you can create a future that suits you instead of having to wait for that magical day when you can start withdrawing from your retirement accounts or start getting Social Security benefits.

But like all pursuits, there are those that take the basics to the extreme. Someone might have a six-figure salary, but only spends $15 per week on groceries for a family of four. Or think of the couple who builds their own tiny house in a relative’s driveway to avoid housing costs.

Those extremists may get attention because they’re going the extra mile to achieve their goal. We all love a success story, right?

But success with FIRE doesn’t have to require extreme measures, according to some in the community.

Why you should DIY your FIRE strategy

At its most basic, FIRE challenges you to spend less than you earn and save the rest in low-fee investments. ChooseFI explains it as saving 25 times your annual expenses in order to reach financial independence. To do so, you should try to save between 40 and 50% of your income each year.

That savings rate might feel impossible for you. But lest you feel hopeless before you even begin, the New York Times spoke with a few women who are following the tenets of FIRE while adapting them to their lifestyle.

Here’s Kiersten Saunders of Atlanta, who writes the blog Rich & Regular:

Saunders acknowledges that there’s not a single perfect formula for financial success. And so the pillars of FIRE, which include lowering your housing costs, driving used cars, increasing your income, cutting grocery bills, among others, don’t have to be tackled in any order. Nor do you need to achieve a completely frugal lifestyle in order to succeed.

Here’s Saunders in the Times again:

Some of the personalities cited in the New York Times have still gone to some pretty extreme lengths to gain financial independence. But Saunders’ quotes are what drive home so much of what gets forgotten about personal finance: it’s about your values, not about achieving a magic number someone else told you to work toward.

Options for new FIRE hopefuls

In fact, some FIRE fans have even broken their ethos down into varieties more like a Choose Your Own Adventure book than a one-size-fits-all roadmap.

There’s leanFIRE: That’s the one where you live as frugally as possible. FatFIRE is for those who don’t want to give up their lifestyle while they save. And semiFIRE helps you plan to “semi-retire” early and work part-time. Those varieties each refer to the lifestyle you’re targeting for your early retirement.

Take Fritz Gilbert of The Retirement Manifesto blog for example. He and his wife took all their vacation time when they were younger so they could start seeing the world then rather than wait for retirement. “Sure, we could have saved more aggressively and retired earlier, but we felt the “sacrifice” we made in saving for retirement at the level we did was appropriate for our life,” he writes.

At the end of the day, the goal is to be able to withdraw 4% from your nest egg every year and still have plenty of money for many years to come. But what if you’re still a long way from saving half your income so you’ll be able to draw from that nest egg later?

ChooseFi says to focus on one percent at a time. “You don’t need to eat the whole elephant today, or even this year. Just focus on what you can do this week to get 1% closer to your end goal,” its beginners’ guide advises. That may mean increasing your 401(k) contribution, or it may just mean packing your own lunch for work. It could mean negotiating your cell phone bill, or thinking about an additional part-time job you might enjoy. One percent additional savings here and there can go a long way over time.

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