- Adherents to the FIRE (financially independent, retire early) movement often aggressively cut spending to boost their savings and contributions to investing accounts.
- At one point, Scott Rieckens and his wife, Taylor, were banking 78 cents of every dollar they made.
Scott Rieckens, 38, of Bend, Oregon, like everyone else, is stressing about the state of the world these days.
"There's so much volatility with the pandemic, inflation starting to take hold, wars happening everywhere — maybe I'm drinking from the firehose of doomscrolling, but there is so much going on," he says.
One thing that he's not particularly worried about, however, is money.
Rieckens and his wife, Taylor, spent years practicing the money habits of the FIRE movement — short for "financial independence, retire early." Watch the documentary about their journey to early retirement, "Playing With FIRE," or read his book of the same name, and you'll quickly understand that goal comes with its own set of stressors. But after years of slashing spending, saving prodigiously, and investing consistently, Rieckens says his finances are no longer front of mind.
"With everything that's happened, boy, does money feel like the last thing I should give a s--- about. It's a privileged position to not give a s--- about money, but that was always kind of the plan," he says. "I'm so grateful we found the FIRE movement when we did, because taking out that financial stress has been huge."
Video by Courtney Stith
For Rieckens, taking steps toward financial independence and a low-stress financial life meant establishing a set of priorities and aligning his finances accordingly. At one point during his journey, he and his wife were saving 78 cents for every dollar they brought in.
Here are their top tips.
The couple had been living in San Diego for about five years when Rieckens realized something was off, financially.
"We had the best of all worlds. It was a great place to create a career, and it was a phenomenal place to live," he says. "Slowly but surely, our careers were growing and the city was growing up around us. We looked around five years in, and every time our paycheck was inflating, so was our lifestyle."
Rieckens said the lifestyle creep continued even after the couple welcomed their first baby. To attempt to keep the couple on the same trajectory, "my solution was to work harder and make more money," Rieckens says. "I went down the rabbit hole of e-commerce, Fulfillment by Amazon, the whole thing."
When Rieckens heard of the FIRE movement, which typically prescribes cutting back on your expenditures in order to aggressively save and invest your income, "it seemed to be describing a way out of my situation."
Video by Mariam Abdallah
To determine if such a move were viable, Scott and Taylor each made a list of the top 10 things that made them happiest. The lists were nearly identical, with family, friends, time together, and time outdoors among the top selections.
Once they realized that the most important things in their life didn't come at a cost, slashing those expenses became much easier, Rieckens says.
The couple embarked on extreme cost-cutting measures. Rieckens estimated that the couple spent somewhere in the neighborhood of $10,000 a month, a total that included rent, two leased vehicles, and a dining out habit.
"It didn't take much to slash that in half," says Rieckens. In order to do so, the couple focused on the "big three" expenses: housing, cars, and food.
"The thought process was, 'Let's find a lower cost of living with the same high quality of life. And let's take a hard look at how much we care about these vehicles.'"
It turned out wheels didn't matter too much to the Rieckenses — they used SwapALease.com to transfer their two car leases to other drivers and bought a reliable used Honda for $6,000 to share. And in what some would consider a difficult move, they packed their bags for Bellevue, Iowa — Scott's hometown — where they temporarily moved in with his parents.
Video by Stephen Parkhurst
"Living with my parents in a small town, we were spending next to nothing. We got our savings rate up to 78% at its peak," Rieckens says. "But that's not reasonable. I wouldn't recommend it to anyone with a brand new kid. We needed our own space."
Even if you're not willing to go to such extreme lengths to save, Rieckens notes that finding small, cheap ways to reward yourself can make cutting back more palatable. The Rieckenses, for instance, slashed their eating out habit and stuck to a fairly low-cost diet of at-home meals.
"Some people would have considered it deprivation," he says. "We invested in good kitchen equipment. It made it better and easier to cook food at home."
Once they had saved up enough money, the young family eventually bought a house and settled in Bend, Oregon, which offered "cheap and fulfilling" time outdoors, as well as a great public school system and relative proximity to extended family.
As far what they were doing with all the money they were saving, Rieckens follows and generally recommends a pretty basic framework. The top priorities: establishing an emergency fund and paying down high-interest rate debt.
"If you're a beginner, make sure you pay down debt as fast as you can, starting with the highest interest rate debt first," he says. Establishing an emergency fund, he adds, contributes greatly to a feeling of overall financial security. "We were able to create a stable, safe strategy with a lot of contingencies and emergency plans."
Video by Jason Armesto
From there, he says, prioritize saving in tax-advantaged retirement accounts, such as a 401(k) or IRA. Within those accounts, especially when someone is looking to accumulate rather than preserve their wealth, Rieckens favors low-cost index funds and ETFs. Investing in lower-cost funds reduces the potential for investing fees to eat into your returns and hamper the chances of for compounding gains in your portfolio.
If you're struggling to balance various financial goals, it could be a good idea to enlist a professional, Rieckens points out. "Finding a fee-only financial planner is the most advantageous way to get help," he says. "I advocate for it. This stuff can get really complicated."
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