I love the FIRE movement. It’s like discovering a new super power. The future starts looking bright and all my financial problems melt away (or that is the hope).
The Financial Independence Retire Early community is full of passionate people who want to change their lives. They are sick of the rate race and being told how to spend their time. FIRE proponents won’t let anyone tell them how to live their lives and they focus on self-reflection and improvement. They do a great job giving a great big FU to people and ideas that say they have to live a miserable life like everyone else.
I started reading FIRE blogs last year. I was curious about what these “wackos” were trying to say. Could you really retire early after saving aggressively for 10 years? I was overwhelmed with excitement in how our future could look if we changed our perception of money and changed our behavior.
Since then, I’ve been consumed with the core concepts of FIRE:
- Spending less than I make
- Shooting to save at least 50% of our income. Before we paid off our consumer debt, this money went towards paying off credit card balances.
- Reduce the amount of financial waste in our lives.
- Stop making stupid financial choices and whining like a bitch about the consequences of those choices.
- Learning to enjoy what we have and avoid hyper-consumerism
- Figure out how we want our future to look, and pursuing those financial goals.
These concepts are all fantastic. They have opened up my eyes and I now see the promise land. But like anything good, there are risks in taking it too far.
Money is Not Everything
There is a point where the FIRE movement can cause us to focus on money too much.
I think when we prioritize money too much, we implement the exact thing FIRE is trying to avoid: focusing on money. When our top priority becomes 100% about the quantity of dollar bills we are saving and how much we are reducing costs, it tends to sacrifice what is more important than our finances.
FIRE is about realizing that life is more important than money.
It is like going from one extreme to another. FIRE is passionate about getting rid of throwing our money away on things that don’t make us happy. But if we exchange that perspective and focus on money too much, we miss the whole point in what the FIRE movement is about.
Instead of being miserable in how we spend money, we become miserable in saving crazy amounts of money. Is that outcome any better than the behaviors we are trying to change? Is sacrificing our happiness for the chance to retire early worth our sanity?
These are the questions I’ve started asking myself. Some people will say that sacrificing for a short time is worth the cost in being able to retire early. There is definitely truth in this statement. But there is a point where this can go too far.
What is More Important than FIRE
Once you take the FIRE pill, it becomes easy to think that nothing is more important than money. But if we dig deep, I think most of us would agree these things are more important than the balance of our investments:
- Freedom to do what we want with our time
- Our friendships
- Marriage and kids
- Doing things that make us happy
- Enjoying life
I’m not saying we have to spend a shit ton of money to do these things, but there is a point when we start sacrificing these things on the
Don’t Be an Asshole
I could tell my kids that we are no longer going to give them an allowance because we want to save money. Or I could use the excuse to my wonderful wife that we can’t afford a present this year for her birthday. Or that we have to cut our date night fund because that is money being “wasted.”
But these financial choices are prioritizing FIRE concepts more than what is most important to me.
I don’t want to make my kids and family feel guilty about spending money. If your family starts to get nervous about any kind of money conversations with you, because they know you are a FIRE freak, that is a sign you have taken things too far.
It becomes about communicating with yourself and your family about what you are trying to accomplish. Maybe there are areas that you want to cut back spending because they hurt your long term goals. But there could be areas where you compromise either for your own
It is the classic case of not taking a good thing too far. Don’t make money a contentious conversation in your household.
We also need to realize that everyones perception and implementation of FIRE is going to be different. There is not a one size fits all. It would be easy if there was a definitive FIRE manual, but that doesn’t exist (maybe I should create one?)
Learning to Enjoy Life
When I was spending more money than I earned, I was buying into the lie that purchasing large electronics was going to make me happy. The extreme opposite of that concept is thinking that saving every possible cent is going to make me happy. I might have less debt and a larger bank account, but the outcome becomes no different.
When we exchange extreme spending with extreme saving, we are switching one bad situation with another.
Balance becomes key. If we look at both sides of these two negative extremes, they have one thing in common: focusing too much on money.
How a healthy balance plays out is going to look different for everyone. For me this might mean justifying spending more money on date nights so we can have more time to do fun things together. Or it might mean spending money on Netflix to provide something that we can do together as a family.
If we aren’t enjoying life, maybe we are taking things too far. But only you can answer that question. There are no right or wrong answers, since you are the only judge of your personal finances (other than maybe your spouse).
The Core Concepts of FIRE are Not the Problem
Reducing financial waste, spending less than you make, and having time flexibility are all positive things that will benefit our lives. No one is going to achieve these things and say “man, I hate having so much flexibility with my time.”
These goals are worth some sacrifice. But the problem becomes how they play out in our lives.
One analogy I have been thinking about relates to working out and eating healthy. We all would agree that working out and eating healthy is a good thing. But when we spend every waking moment trying to pump iron, or when consuming every single calorie becomes like starting world war three, this positive pursuit quickly becomes a nightmare.
The good thing about FIRE concepts is that they are not defined in concrete. A healthy implementation of FIRE is going to look different for everyone. And it most likely is going to shift and evolve over time. There might be periods of time where it makes sense and is healthy to cut back in certain areas. But there also might be times where spending extra money on things or experiences is going to be worth the cost.
The FIRE movement focuses on thinking about how to save and spend money in a way that makes you happy and pursues your financial goals. Sacrificing either of these things is a major mistake.
What If You Died Today?
One way to see if we have proper balance is to envision our death. I don’t mean “literally” think about how you are going to die. But rather, how the choices you are making today will make you feel if you realized your life was going to end immediately.
When thinking about dying today, asking yourself these questions can help determine if you have a healthy balance implementing FIRE:
- Will my spouse or kids be happy when the FIRE “nazi” is finally dead?
- Does how I’m spending and saving money leave me with positive feelings?
- Would I spend my time any differently?
- Will my family look back on my financial choices positively or negatively?
- Is there an area of my life I wish I spent more time or money on?
- Are there any choices I would make differently, knowing my death is imminently near?
Death is a sad time, but it also brings to light the things that are most important to us.
For me, there are a few things that stand out that I’m not doing a great job on now, that I am going to start prioritizing:
- I don’t spend enough personal time with my kids. We do a lot together like homework, reading, etc. but not much else.
- Getting a better idea of how my spouse would like to pursue FIRE. We both love the FIRE concepts, but I think there are some differences in implementation that we need to hash out. We both have equal power in this conversation in figuring out how to pursue our goals.
- My physical health has not been a priority, which includes what I eat and my physical activity level.
How to Avoid Setting Your Life on Fire with FIRE
It all boils down to self-reflection and communicating with your family about what matters most.
And this is where things get complicated because you and your spouse might not 100% agree on the implementation of FIRE. Maybe if you were single and didn’t have a family, you would handle things differently. But we don’t live in a vacuum, and we can’t ignore the desires of our significant other.
Even if you are single and don’t have to worry about these types of relationships for the time being, that doesn’t mean you don’t have some hard choices to make.
You have to figure out what costs are worth cutting back on. There might even be budget categories that you want to increase. Of course, saying that, some of you are probably thinking “did he just recommend that implementing FIRE might mean spending more money on certain things?!” Yes, you heard that right.
I’m just going to say it as directly as I can: FIRE is not about focusing on how you shouldn’t spend money. It becomes about figuring out how you SHOULD spend money.
This involves clearly defining your hopes, dreams and financial goals. Maybe there is a world where we can live and be happy without any discretionary spending and spending as little on food as possible. But that would require sacrifice life enjoyment for me and my family, and would not be worth the cost.
Cutting Costs and Spending Can Only Do So Much
No doubt, we should all pursue getting rid of as much financial waste in our lives. But spending money can making living more enjoyable and comfortable. Maybe there are people out there that can live a barebones life, without much spending at all. But that is not what I would consider enjoyable, unless I have to.
Instead of cutting costs to the point of misery, it is better to increase your income as much as possible. This allows you to increase your savings and gives you more flexibility in your spending.
In my opinion, it is the “creme-de-la-creme” of FIRE. A high savings rate, with margin in your budget to not live like a hermit crab.
The more I work on Money Stir, the more motivated I become in getting the site to a spot where I can generate income. At first, I’m just trying to bring in any amount of money. But I’m hoping this can grow beyond that to make more than I currently make from my 9-5 job.
The more things you pursue to increase your income, the more likely something will take off that has a drastic impact on your personal finances. For example, we run our own salon business and are continually trying to make that grow.
Implementing FIRE effectively requires optimizing how you use your available time.
Before implementing FIRE, I spent most of my free time doing the following:
- Watching TV
- Watching more TV
- Going out to eat a lot
- Sitting down to watch more TV
- Not reading
- Getting up 15 minutes before I needed to go to work
I spent most of my time doing things that really didn’t provide anything of value. Notice that nothing on this list is pushing me towards our long-term goals.
These days, this is what I prioritize:
- Going to bed at 10 PM and waking up at 5 AM.
- Limiting the amount of TV I watch.
- Reading more
- Spending most of my free time working on this blog
My time management is not perfect. Especially considering I just re-launched a new site theme twice in the last month, I’m spending too much time on this blog. But the good thing is that this is not time that was wasted, and I can now get back into a more reasonable blog schedule.
It is also important to re-emphasize that optimizing our time isn’t all about making sure everything we do is trying to bring in more money. It is more about spending our time on things that matter most to us.
The FIRE movement prioritizes time optimization as much as it deals with our personal finances.
Being passionate about FIRE is a good thing. But it is more than just focusing on money and our personal finances.
We aren’t going to win any awards if we implement a method of FIRE and yet are miserable. It requires finding a balance that works best for us and our family. Some people might be more comfortable cutting costs in certain budget categories, while you feel more comfortable spending more money in that same category. And that is okay.
Don’t let anyone tell you how you should implement FIRE. We can ask questions and share our story, but there is not one right way to live a FIRE life. Every one of us will approach FIRE differently since we aren’t robots.
Do you struggle with a FIRE addiction? How have you tackled the problem?
Chris Roane is a financial blogger who loves to be transparent about money-related issues. He’s paid off massive amounts of credit card debt and is the blog author of Money Stir. His main focus on Money Stir is talking about how money relates to our relationships, personal development, and how to plan for the future we want. He’s been quoted on Market Watch, The Ladders, and other publications.