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If you dream of achieving a FIRE lifestyle, as in Financial Independence and Retire Early, you’ll need to wisely save for FIRE.

The idea of retiring early is appealing to many people. After all, who wouldn’t want to have more time to travel, spend time with family and friends, or pursue hobbies? 

It may be appealing, but it isn’t easy. Retiring early can be a challenge, especially if you don’t have a large nest egg saved up.

In this article, I’ll give you 8 easy-to-follow methods to amp your goals as you save for FIRE.

An Introduction to the FIRE Movement

The modern FIRE movement started in the late 2000s with the rise of mainstream financial blogs and podcasts. While the movement may have achieved mainstream notoriety, it does not have mainstream success. As in, it’s incredibly difficult to achieve.

Despite the challenge, the FIRE movement has a lot of appeal. Even if saving for FIRE feels like an impossible dream, you can still see financial benefits as you work towards this goal.

People committed to this movement save and invest aggressively. They also typically live well below their means to help them achieve their financial goals and save for FIRE.

How You Can Start Saving for FIRE

If you’re interested in joining the FIRE movement, there are a few things you’ll need to consider. 

First, you need to develop a save for FIRE savings plan. This plan should include your current income, expenses, and savings goals. Once you have a plan in place, you’ll need to stick to it. This may mean making some sacrifices in the short-term so that you can enjoy the long-term benefits.

Here are a few tips to help you start your plan to save for FIRE:

1. Set a savings goal.

You’ll need to first figure out how much money you’ll need to retire early. This will depend on your lifestyle and expenses. Once you know how much money you need, you can start saving towards your goal.

2. Increase your income.

If you can, find ways to increase your income. This could mean getting a raise at work, finding a new job, starting a side hustle, or investing.

3. Calculate your savings rate.

Your savings rate is the percentage of your income that you’re able to save each month. To calculate your savings rate, simply divide your monthly savings by your monthly income. For example, if you save $500 each month and your monthly income is $2,000, your savings rate is 25%.

As your income grows, you may want to maintain or increase your savings rate to support your FIRE goals. So if your monthly income grows from $2,000 to $3,000, try to increase your savings from $500 to $750 to maintain a rate of 25%.

4. Increase your savings rate.

The higher your savings rate, the sooner you’ll reach financial independence. If you’re saving 5% of your income, try to increase it to 10%.

There are a few things that you can do to increase your savings rate. 

First, you can reduce your expenses. This could mean cooking at home more often, canceling unused subscriptions, or finding cheaper alternatives to your current expenses. 

Second, you can increase your income. This could mean getting a part-time job, starting a side hustle, or asking for a raise at work.

5. Reduce your expenses.

The more money you can save, the faster you’ll reach your retirement goals. Take a close look at your expenses and see where you can cut back. 

If you’re eating out 5 times a week, see if you can cut back to 2 or 3 times. If you’re no longer using your HBO subscription, then cancel it.

You don’t need to trim all expenses, but get rid of anything that isn’t serving you and save the rest!

6. Automate your savings.

One of the best ways to stay on track with your savings is to automate it. That way you never have to miss what was never available for you to spend.

You may be able to setup a direct deposit from your paycheck into your savings account. Another option is to schedule a monthly transfer from your checking account to your savings account. This way, you won’t even have to think about it.

7. Invest your savings wisely.

Once you have a healthy savings to get you started, you can start investing your money. This is a great way to grow your savings and reach your retirement goals faster. 

There are many different investment options available, so do some research to find the ones that are right for you.

Psst if you’re interested in getting started with stock market investing, I recommend reading The Bogleheads’ Guide to Investing.

8. Stay disciplined.

The key to reaching financial independence and retiring early is to stay disciplined with your savings and investment plan. This means sticking to your budget, making regular investments, and resisting the temptation to spend your savings.

Over time you may need to adjust your plan as your financial situation changes. For instance, if you experience job loss, then you may need to reassess your situation. You may also want to increase your savings rate as your income grows.

Retiring early is a lot of work, but it’s achievable with hard work and dedication. By following these tips, you can establish a savings and reach your retirement goals sooner than you think.

More Ways to Accelerate Your Savings for FIRE

Here are some additional tips to help you reach your FIRE goals:

Start saving early.

The earlier you start saving, the more time your money has to grow. Even if you can only save a small amount each month, it will add up over time.

Live below your means.

This is one of the most important things you can do to reach your FIRE goals. If you can spend less than you earn, you’ll be able to save more money.

Invest in yourself.

This could mean getting an education, training for a new career, or starting your own business. By wisely investing in yourself, you may be able to vastly increase your income and therefore reach your FIRE goals sooner.

Just keep in mind that it’s a huge consideration to take on student debt. If you’re considering a program, keep in mind your potential income and the long-term costs of your education.

Be patient.

Reaching your FIRE goals takes time and effort. Don’t get discouraged if you don’t see results immediately. Just keep saving and investing, and you’ll eventually get there.

The FIRE movement is a lot of work, but the rewards are rich. By following the tips above, you can start your savings for FIRE and be on your way to a more financially secure future.

Think building a savings for FIRE will add fire to your life? Check out the posts page for more ways you can FIRE Your Career and achieve financial freedom.

FIRE Your Career: Achieve Financial Freedom Through Your Career & Spend MORE Time Doing What You Love.

Products I recommend in this article:

The Bogleheads’ Guide to Investing (book on how to get started with stock market investing)

Disclaimer: I am not a financial advisor and none of the above should be construed as financial advice. For financial advice, please seek advice from an accredited financial advisor.