In the vibrant FIRE (Financial Independence, Retire Early) community, our present desires often throw down the gauntlet to our more stoic retirement plans. However, as we've noticed, the most disciplined among us can veer off the path and go to extremes. They focus so intently on the future that today starts to lose its colour.
We speak from experience when we tell you life isn't just about storing nuts for winter. Sometimes, it's about enjoying the ice cream before it melts. So, where do you draw the invisible line between future goals and current desires? How do you ensure that in your efforts to reach FIRE, you're not burning yourself out before you get there?
In this latest episode of the Aussie FIRE podcast, we unpack how you can live a rich life now while building an even richer one for the future. We share the mindset and perspectives we’ve learned from our personal FIRE journey to help you find the happy middle ground (and keep the motivational fire burning). One where joy meets mindfulness, and life feels like a ride you're actually in control of.
Does the FIRE community get carried away?
In a world obsessed with instant gratification, the concept of delaying pleasure for future gain is often seen as radical. Yet, for many on the path to Financial Independence (or FI), it's a way of life.
Lean too far one way, and you might find yourself missing out on life’s simple pleasures. Tilt too far the other way, and the dream of FI could drift out of reach. In other words, striking a balance is a crucial but often-overlooked part of any FIRE journey. The thin line between saving and living
The pursuit of FI often brings us face-to-face with our spending habits, compelling us to make tough choices. Dave recounts periods of working exhaustive overtime, sacrificing sleep and well-being for the sake of saving. While these efforts accelerated his financial goals, they also led to burnout and a temporary disconnect from the joys of life.
Similarly, Hayden describes his own penny-pinching adventures—from choosing cheaper transport options to dining on dollar hotdogs. All in the name of saving a few extra dollars.
We reflect on these experiences with a mix of pride and pondering. Was the sacrifice worth it? Skipping out on social outings or opting for the cheapest possible meals might save money in the short term. But at what cost to our happiness and health?
Dave points out how, over time, one becomes better at denying oneself pleasures in the name of saving. Yet, this discipline can lead to a life more about what you're not doing rather than what you are. Yes, foregoing a little holiday break might nudge you closer to your goals. However, there's wisdom in questioning not just the cost, but the value it actually brings to your life today.
So what’s the solution? How can we better balance the two?
The importance of evolving in your FIRE journey
Looking back, it’s easy to wonder if we should have loosened the purse strings a bit more to enjoy life's simple pleasures. Like a coffee with friends or an impromptu dinner out, for instance.
Hindsight may tempt us to believe we could have struck a better balance between saving and spending. However, it's important to remember that the decisions we made were based on our values and priorities at the time.
As we mature in our financial journey, our relationship with money evolves. We learn that it's not just about saving every penny at the cost of what we already cherish at the moment. Rather, it’s about asking yourself: “Does this expense align with my priorities and bring genuine joy?”
Question assumptions and embrace change
There’s good news: our understanding of frugality is changing. We are learning that there are innovative ways to save while also living your definition of a rich life on a budget. This mindset of questioning and exploring possibilities can lead to more sustainable and enjoyable ways to reach our financial goals.
This may sound cliched, but it all boils down to one concept: what works for one may not work for another. The journey to FI is deeply personal, and should be navigated in a way that brings satisfaction, meaning, and happiness to you.
In the same vein, what constitutes a worthwhile sacrifice varies from person to person. When you pursue FIRE, you should do so with understanding of the trade-offs you’re willing to make. Ultimately, it’s about finding that balance that feels meaningful and sustainable over the long term.
How to stick with your savings goals when you want to spend money?
Automate your finance
First up, Dave suggests an almost too-simple solution: automate your savings. Decide on a chunk of your paycheck that goes straight to savings, and feel free to spend what's left with peace of mind.
This one not only helps you hit your savings goal, but also liberates you from the mental load of financial guilt. After all, once your savings are set aside, every dollar spent is a dollar you can afford to spend.
Allocate a “fun fund”
Dave's seen the extremes—folks who fall into the ultra-frugal trap, where spending feels like sinning. If you count yourself among them, it's okay to loosen up—responsibly, of course.
His advice? Set aside a designated "fun fund." Setting aside a specific budget can help you enjoy life's little luxuries without derailing your financial goals. Think of it as a budget for avoiding budget burnout. It’s a way to maintain your staying power so that you may achieve your FIRE life sooner.
Know when not to pay for convenience
Let's talk about food—often the center of the debate on the cost of convenience. Many of us would gladly skip an hour behind the stove for more pressing or enjoyable activities, especially on those jam-packed days. The real question then becomes, how much convenience can you afford?
To find out your number, Hayden suggests evaluating the expense of dining out against the cost of a home-cooked meal. The difference is the true premium of convenience. From there, some people can decide based on how much their budget would allow for convenience. However, other FIRE folks would question whether the time saved is worth the extra expense in the first place.
The latter inevitably brings us into the territory of valuing time over money. It’s a hot topic for many, especially those with higher incomes.
The argument goes, if you can earn more per hour than the cost of hiring out, why not do it? However, Dave points out that this theory doesn’t always hold water—especially when you're not working 24/7. Life isn’t a ledger, and time isn’t always money.
Most of the time, we just need to be honest whether the time saved is genuinely productive or just an excuse for laziness. There are times when doing things yourself is not just about saving money, but about finding balance and fulfillment outside of work.
Earn more to spend more
And what if you want to bump up your spending a bit? One approach is to allow yourself to spend more only if you increase your income. This way, you're thanking yourself for your hard work and delayed gratification, without compromising your savings goals.
Zooming out, Dave reminds us that financial growth and enjoying life aren't mutually exclusive. For those stuck in a frugality rut, taking stock of how your assets have grown over the years can be incredibly liberating. Realising that responsible spending won't derail your progress might just be the permission you need to enjoy life a bit more.
What about the idea of using rewards to stay motivated?
For us in the FIRE community, Financial Independence is our Everest. It’s a trek, no doubt, and hikers certainly don’t climb to the top in one go. So, Dave hits the nail on the head when he talks about the power of setting smaller goals along the path to FIRE.
There are two parts to this idea. First, setting smaller, achievable goals can act like mini milestones that keep your spirits high. This is where you can pause, look back, and appreciate how far you’ve come. Second, the idea is to treat yourself whenever you hit one of these targets. It's like telling your brain: "This feels good. Let's do it again."
However, not all of us get the same kick from a splurge. For some, the joy of a reward doesn't quite outweigh the effort of earning or saving that extra dollar. Hayden’s approach? He revels in the interest and dividends earned from investments . And this might work for you too. This way, you're only skimming the cream off the top and don’t feel about dipping into the principal amount.
Yet, for some, the sheer act of making progress is motivation enough. Watching your investments grow and pay for expenses, bit by bit, can be a powerful driver. It could start with a coffee a week, and before you know it, you're covering half your rent with passive income. These moments remind us why we started on this path in the first place, and it’s worth celebrating.
Lastly, there’s the idea of rewarding habits rather than just progress. Dave points out that while milestones are great, the real win is the habits that get you there. Rewarding yourself for sticking to your investment schedule or for consistently saving can be just as impactful. You are acknowledging the effort it takes to stay the course, even when progress seems slow.
Final thoughts
From what we’ve seen, the journey to FIRE isn't just about pinching pennies or splurging without a care. The crux of the matter is to foster a mindset that welcomes moderation and mindfulness in spending. If you ask us, the most effective FIRE strategy you can do is to find that golden middle ground that you can stick to for the long haul.
It’s okay to splash out on experiences that sprinkle joy into your life—a lunch out with mates, a trip to see family, or whatever it may be. These splurges are part of what makes life rich and textured. Yet, at the same time, it’s part of discerning which expenditures truly add value and satisfaction to you personally.
If you’re feeling the pinch, you can get proactive by setting aside cash for those must-spend moments, be it from interest or dividends. Or finding clever ways to cut costs elsewhere. Maybe it's about giving each dollar a job or even giving them their own space with separate bank accounts. Whatever the strategy, the key is to keep at it, mull over your choices, and take steps, however small.
And that's a wrap on this episode! If you have any feedback or topic suggestions for us, reach out on our Instagram at @pearlerhq or drop us a line at hello@aussiefirepod.com or visit our [Aussie FIRE Podcast page](https://pearler.com/explore/listen/aussiefire) for more episodes. Head to pearler.com for more financial inspo, tools, and community insights.
Here's to finding your financial balance—and happy investing!
Dave and Hayden
