We started our travel therapy journey to travel more and gain financial freedom. Thanks to FIRE we have been able to explore new places (like Portland, OR this past weekend), and save money.
(More to come next week on our Portland trip, including our visit to Multnomah Falls —>)
What the Heck is FIRE?
What is the FIRE movement? FIRE stands for financial independence, retire early. Themes that often pop up in the FIRE community include: freedom, charity, passion, and self mastery. To me, FIRE is all about becoming a self- empowered individual who can choose how best to leave his or her mark on the world. I’m hoping that “FIRE-ing” will increase my freedom, allow me more time to pursue projects of passion and charity, and increase my health in both body and mind.
Like many people, maybe even you, I identify with the “FI” part of FIRE.
I have found that many people worry little about whether or not they work ten or sixty hours per week as long as they are passionate about what they are doing, feel as if they are contributing to a higher cause, and are secure in their knowledge that their basic needs are already met.
I want to follow a path that I create for myself, guided by principles and values that I have installed into myself. Plus, it would be nice to go on a hike on a Wednesday morning if the weather is perfect and rain is predicted all weekend. There are many reasons to strive for FIRE.
No matter what intrigues you personally about FIRE, its important to know how to start. Perhaps you haven’t thought about what your life goals are or what you want to be doing in 5, 10, or 20 years. In that case, I would highly recommend getting a notepad out and writing some ideas down. The goals can be abstract, maybe even insane. This “big picture” planning doesn’t need to have numbers or specifics attached to it, that is more in the realm of implementation and planning.
It is highly likely that you have given this topic some thought. That being said, it is inevitable that you will need to feed, clothe, and shelter yourself- and probably others. You will need a source of income to cover the mandatory expenses that you and your family require for survival. The less time it takes for you to cover those needs, the more freedom you have to pursue your goals. It matters not whether you want to spend the rest of your life in a cabin in the woods fishing everyday, open a small business, spend more time with your family, or pursue work that is personally meaningful to you. In other words, the motive doesn’t matter- the reality of the situation remains the same
I’m sure you have heard some version of this story before
Recently, management has made some changes that really affect the way I have to do my job. I’m being forced to do things I’m not entirely comfortable with and I do not fully understand. I don’t have a full grasp on the ethics behind the business I am in. I’m being pushed down a path I didn’t really choose. But hey, I have to put food on the table somehow and I really don’t have any other options. My benefits are good and the pay is good. I guess that's the way the cookie crumbles!
Wouldn’t it be nice to be able to step back, assess the situation, and make a decision based on your values and priorities rather than someone else’s? In the example above, the person is stuck between a rock and hard place. What if that person had no pressure to do anything that contradicted her personal values in order to put food on the table and pay rent? I’m willing to bet that he/she would not feel so trapped.
Of course, it takes time and effort to plan for financial independence- and everyone’s goals are different. However, the principles remain the same: live below your means and invest the savings. The first step we took towards gaining freedom and achieving financial independence was setting up a tracking budget. Basically, we track every single penny that goes into or out of our accounts. Sounds easy right? Well, it actually is pretty easy with the right tools. It does take time and effort to log all expenses and income, and that’s a fact. After tracking your spending habits for a few months, you start to paint a much clearer picture of where your money is going. This is the information you need in order to make informed decisions to leverage whatever advantages you have going for you.
Here are the options that I am aware of: track expenses automatically with an online tool like Mint.com, Youneedabudget, or tools built into your online bank account, or track expenses manually on a spreadsheet.
I have used services such as Mint in the past, and they generally work well, except when they don’t. About twice a month all of my accounts de-sync and I lose valuable data. An automatic tool like Mint takes very little time to set up, but leaves something to be desired in terms of accuracy. I never felt fully confident that all of my data was being properly recorded
Recently, I have been using a spreadsheet template from themeasureofaplan.com. The site offers templates available in both excel and Google sheets formats.
It takes about 10-20 seconds to enter each expense. The spreadsheet offers tools to help you plan, track different expense categories, and view a small set of graphs and charts. It’s a less automated option, but it costs nothing and provides completely accurate data. Plus, as an added bonus, you can customize the spreadsheet to fit your needs. I find this to be the most useful aspect.
Erin and I keep our own spreadsheets and I combine both of them at the end of the month into one sheet. This makes reviewing personal and combined spending a cinch! Most importantly, it gives us all the data we need to make informed decisions about how we want to spend and what we want to save for.
This is step one for us, and it could be step one for you also. This is the small picture, day to day stuff that I was talking about earlier. Without doing the small stuff, it’s impossible to plan for success when it comes to the big stuff.