Categories
Make Money From Home

7 Mistakes Young People Make When Joining the FIRE Movement – GOBankingRates

…….

sturti / iStock.com

Many generations, including Gen Z and millennials, are working to join the FIRE movement. FIRE — Financial Independence Retire Early — is based on the premise of saving as much money as you can now to retire early and achieve financial independence. 

The Future of Finances: Gen Z & How They Relate to Money
Learn More: 7 Surprisingly Easy Ways To Reach Retirement Goals

While Gen Zers in particular have some financial leverage over previous generations, success with FIRE means making careful money moves. If you’re a young person planning to join the FIRE Movement, take caution not to make these mistakes.

Getting Obsessed With Reaching a Number, Not the Endpoint

Maggie Tucker is the co-host of the personal finance podcast called friends on FIRE. Tucker, who recently retired early at age 41, said a common mistake young people make when joining the FIRE movement is obsessing with reaching a number instead of enjoying the journey along the way. 

“When young people first learn about FIRE they can get really excited and motivated, and this initial excitement can lead to a complete obsession with the goal and the endpoint,” said Tucker. “We think it’s just as important to enjoy the journey along the way. There is a way to balance staying focused on your goals and enjoying the journey and the money you’re working hard to earn. It’s all about balances and tradeoffs.”

Take Our Poll: How Do You Typically Split the Restaurant Bill?

Underestimating How Much They Truly Need To Retire

If you think you can live on $25,000 a year in retirement, Tucker recommends considering doubling this number with kids and recalculating to determine what you really need. 

Young people often underestimate the future cost of medical insurance, having a family, home emergencies and other unexpected expenses. 

Samantha Hawrylack, co-founder of How To FIRE, also said not saving enough money is a major problem facing young people who want to reach FIRE. Hawrylack recommends starting small. Cut costs and set aside a certain percentage of your income each month. This will increase your savings rate over time and allow you to invest for the long term. 

See: Take These 7 Key Steps Today to Retire a Millionaire

“If you can’t save a lot at first, it’s OK. Just make sure you’re automatically transferring money into your savings account each month so you can gradually increase your savings rate,” said Hawrylack.

Going In Without a Plan

Young people who want to reach FIRE should not start unless they have a plan. And …….

Source: https://www.gobankingrates.com/retirement/planning/mistakes-young-people-make-when-joining-the-fire-movement/

Leave a Reply

Your email address will not be published. Required fields are marked *