FIRE (Financial Independence Retire Early) is a financial lifestyle movement with the motive of gaining financial independence to retire early. This can be achieved by extreme savings and investment. With the saving of 70% of the annual income FIRE proponents lines to retire early and live off small withdrawals from the saved funds.
Everyone wants to be wealthy. But it could be achieved by following some healthy financial steps for living a financial freedom life. The below mentioned are the lifesaving tips, which if you make a regular habit of your life.
Do a Budget Every Month:
Budget is the key step in every financial saving. Whenever it comes to saving money, planning of budget comes first. If you know, your income, your spendings, then you can decide where your spendings, does it worth or not, then you could plan accordingly.
Live Below your means:
When you are out of cash, you will start using your credit card at the end of the month, then it is you are living beyond your means. This habit will dump you in the stress of debt, which is completely opposite of being wealthy. Start living within your means in fact it will save you if you live below your means than within. This could be achieved if you avoid all your unnecessary spending’s and cut that credit card that opposing you from being wealthy.
Check your spendings:
Many of us spend thier money without any proper planning, it's because we do not track our spendings. Once you start tracking your spendings, you will see the difference and will cut unnecessary spendings, which will save you a lot of your money in your pocket. Checking your spendings makes you stay accountable to your budget and will help you know your money balance availability.
Keep an Emergency Fund:
Always keep an emergency fund whether you may use it or not, it will always protect you from unexpected expenses. If you do not have an emergency fund and suddenly if an emergency comes, you must get into debt to recover the unexpected expenses. So, having an emergency fund to your account will be a life-saving hack. All goes smooth and god, no worries you have extra money saved in your account, if not, if anything emergency you are ready and that will not ruin your financial life, as you have your emergency fund saved.
Save for Big Purchases:
Every one of us wishes to have a big brand-new TV, a luxurious sofa, remodel our lawns or balconies or kitchens, etc. But, how to get all those? Save money for it, it may take time, but you will get all things you needed without paying extra, which means without interest. Some choose to purchase on loans, but loans do not come without interest, so you will be paying more than the price. So, save for your bigger purchases to live a stress-free life with luxuries.
Make an extra income source:
It always feels good when you get extra, try to get some money from extra sources, go for a part-time job, or invest at some good interest gaining schemes in which you can gain some money, that adds on to your account. And with a part-time job, you can get some more. All these can be added to your income, which will be a great help and support to your financial status.
Save for retirement:
We always think about our future, the main motive is we want to secure our future. So, save your money for your future, so you could relax and enjoy your retirement saved fund during your golden days.
FIRE Concept is gaining momentum globally, and many find it appealing. But one must also be aware of the pros and cons of it. Instead of focusing on early retirements, focus on financial freedom, so you could retire early to pursue your dreams. As it's very clear money is the fuel for life, as without fuel vehicles won't run in the same way without money life will be stressful, so aim at financial freedom, for a secure life.
How do you get FIRE (financial independence and retire early)?
- Clear all your debt
- Save and invest early for your retirement proponent.
- Avoid unnecessary expenses
- Keep Low liabilities.
How much does it cost to retire a fire?
It begins with 70% of your annual income, once your reach approximately 30 or 25 times of your annual expenses, you may quit your job or completely retire from employment.
What are the Variations on FIRE?
- Fat FIRE - Individuals with more traditional lifestyles, who save more than their average retirement investor.
- Lean FIRE - Individuals with minimal living, extreme savings, necessitating a far more restricted lifestyle.
- Barista FIRE - It is for the employees who quit 9 to 5 job, but still employs part-time work to reach the current expenses, if not that would erode their retirement savings.
- Coast FIRE - Applicable to Part-Time job followers, but still have a maximum savings fund for retirement.