Put Some FIRE Into Your Finances
FIRE stands for financial independence and retire early, and as I’m sure you will agree these are excellent money goals to be aiming to in life. Of course, it’s not enough to have such goals, as you need to know how to get there as well. Luckily, it’s not as hard as you may think, keep reading to find out more.
Pay what you owe.
One of the first things to get sorted when you are looking to implement FIRE goals is to pay off any outstanding debts. This can seem like a bit of a bummer to some people because they want to start building nest egg straight away. However, nine times out of ten it makes much more financial sense to get rid of anything outstanding before you try and amass your fortune.
The reason that this is the case is due to interest rates, the percentages applied to loan and savings. Of course, those rates applied to loans are nearly always higher than those applied to savings and what this means is that keeping your debts open is costing you more than you can make by saving money.
Therefore it is a much better idea to pay off your debts first as it will save you money in the long run, money that can be put towards your financial independence and early retirement fund.
Collect what you are owed.
Another important aspect of meeting your FIRE goals is to pay attention to any money that you are currently owed. This money may be something relatively straightforward like a loan you have given to a friend or expenses that you can claim back on your tax allowance.
However, collecting what you are owed also relates to more complicated issue such as getting compensation from a personal injury claim that you are entitled to make. In fact, it is always worth considering this as an option because not only can you be awarded enough to cover your medical bill, but there is also usually a provision for any inconvenience caused to you.
An amount that can then be used to top up your FIRE fund, and why not see something positive come out of this experience of suffering?
Save like your life depends on it.
Smart savings can help you achieve your FIRE goals.
Now, saving is a huge part of achieving your FIRE goals, and as such, it needs to be taken seriously. This means that not only do you put away a little of what is left each month but that you have a clear plan for every year until FIRE can occur.
In fact, many people that successfully achieve their FIRE goals save extra by splitting their spending into necessary, and nice categories. Then while they always buy the essential items, they also try and do without the nice items where possible as a way to boost their savings and reach their FIRE goal more quickly.
Invest with the best.
Last of all, very few folks will achieve their FIRE goals by saving alone. That means that investing their savings wisely, so they work as hard as possible is crucial to success.
Investing is, of course, a complicated issue in itself and you can read more about this here, to help you meet your FIRE goals in the shortest time possible.