Is FIRE Right for You?

Is FIRE Right for You?

A relatively old idea with a new name is gaining increased interest among Millennials. Proponents of FIRE — Financial Independence, Retire Early — work toward early retirement by reducing spending during their working lives to build the funds needed for future financial freedom. While this austere, strict saving philosophy may not be for everyone, some of its principles may help those looking to meet ambitious financial goals.


The first part of FIRE — financial independence — is the main goal of its proponents. Independence doesn’t necessarily mean retirement, but rather the financial ability of FIRE followers to use their time as they see fit, whether to travel the world, volunteer or open their own businesses.

For most of us, our goals are more traditional. We may want to save for a nice home, a child’s college education and a comfortable retirement, the latter perhaps near normal retirement age instead of in our 40s. FIRE’s personal finance practices can still help you reach these goals.


You can use FIRE principles without brown-bagging your lunch for eternity by first defining a financial target. Next, identify and pay off your highest-interest debt, working toward being as debt-free as possible.

Go through your budget and identify where you can spend less. How much you sacrifice should correlate with how important your goals are. Maybe you don’t need to keep your car for 20 years, but an extra couple of years without car payments can help.

At the same time, you might consider earning more via overtime, a second job or gigging, and putting this money toward your most important goals. Save as much as possible early on to take advantage of time and compounding, and do it in tax-deferred vehicles when possible.

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