Let me preface this by saying that every day is a work in progress. This blog encompasses all things fitness, female, and FIRE. But what is FIRE? Read on to find out, and please take note: these posts are based on my own personal experience and research. I am not a financial professional; this blog may have financial information, but should not be seen as financial advice. See my disclosure for more.
I grew up believing that credit cards were evil, and that every person should have two bank accounts: one savings and one checking. While I don’t think this is necessarily bad advice for some, I also don’t think it is the whole picture for most.
Fast forward to college, when my Dad gifted me The Motley Fool’s Investment Guide for Teens. I read it in less than a week. I love books almost as much as anything in this world, so demolishing a book in six days isn’t new, but this one in particular started me on a quest for financial knowledge in a way I hadn’t known before.
Not that I did anything much with this knowledge. One of the things I have realized most moving forward is how unimpressive knowledge is without action. I still took out student loans to travel and live abroad, even though the majority of my college was paid for with scholarships.
Eight years after graduating, I will finally pay off those student loans in a couple short months, but this is really only the beginning of my financial journey.
So what is FIRE? It stands for Financial Independence / Retire Early, but it really is just a community of people that are focused on getting their financial **** in order to put them in the best place for their future. These people work to get to a point where work is optional and focusing on building a life of intention by knowing and understanding the rules when it comes to financial literacy, among other things.
Over the past year, I’ve fallen in love with this community. You know the feeling when you’ve found your tribe? This is it. I’ve always believed in my “keep doing what you love, and eventually you’ll end up somewhere you want to be” mantra, but this fits my philosophy. Recently, my Dad gifted me another book, Choose FI (Your Blueprint to Financial Independence), and introduced me to the Clark Howard podcast as well as the Choose FI podcast, so I can’t take all the credit on the R&D phase, but I am so happy to be on this train.
Here we are in March 2020, and while I have big goals (raise your hand if you’re surprised), I am also very excited. I have already begun to take steps to get my finances in order:
My first step was to track my budget. I’ve always had a budget, but I mean actually track it. I want to be able to put things on autopilot and only spend a short amount of time with my finances, but I think I have to front load the work for that to be effective. This part has proven more difficult than expected, because so many of my expenses are variable, but more on that later.
My next step was to track my net worth. Shoutout to Personal Capital for the ease of setup to be able to actually see everything on one page. I honestly don’t do too much with this website now that I’ve set it up, but it is nice to be able to see progress over time. I have committed to checking this every 6 months to be able to track progress. Hold on while I set up a calendar reminder to do just that…
Other recent details have included cutting down on unnecessary expenses and moving my bank accounts to online no-fee versions of the same thing. I am almost at what I’ll refer to as “ground zero” ($0 in debt, which will take into effect as soon as my last student loan payment goes through).
So I’m putting it out there. I said I have goals, y’all, so here they are:
- Hit “Ground Zero” (aka $0 in debt)
- Max out Roth IRA
- Come up with plan to max out 401(k)
- Max out 401(k) in 2021
- Get over fear of credit cards and begin to use travel rewards (more on that later)
- Build emergency fund and figure out where to put it (I question the general consensus that an emergency account lives in a savings account)
- I have calculated my FI number (more about that here), and currently I can “retire” in 2040, but I have a goal of moving that date up by 5 years, so I need to develop a plan to do just that. Stay tuned.
Get fired up! What are your biggest dreams and financial goals? What is one action step you can take to get you on the path towards that goal? Write it down. Break it down into baby steps if you need to and put it on your calendar. Finances are only hard because we try to eat the whole pizza all at once. Take a slice. And get excited to eat another one after that. If you are interested in exploring this concept, here are a few of my favorite resources – start there and we’ll take this journey together.