4 tips if you're yearning for financial freedom

By Nicole Webb 29 April 2020 3 min read

For some of us, financial freedom is the ultimate dream.

But many of us write ourselves off before we even get on the path, putting our crushed dreams down to bad luck or resigning ourselves to the fact it's never going to happen.

So, we decided to seek out some average Joes who have achieved the impossible dream.

These clever people generally put their success down to a commitment to healthy habits, rather than luck or happenstance.

They got down to business and they are now happy residents of the FIRE (financial independence, retire early) community.

Here's what we learned:

1. Resist lifestyle creep

Lifestyle creep can be a big problem, especially as you progress your career and come into more coin.

It's a natural evolution of earning more and spending more.

Steve and Courtney Adcock are faithful followers of the FIRE movement. They retired at 35 with savings of $1 million+.

They now enjoy a life of travelling around America in an RV.

But the Adcocks know the temptation of lifestyle creep all too well.

They were earning reasonably good coin, pulling in $130,000 in the years before they retired.

Steve says the problem with high salaries is they’re deceptive; they make us think we have more wealth.

But if income is only supporting your spending, then you're not netting more wealth.

Steve explains the differences between an average and extraordinary Joe.

The average Joe sees his needs rocket to match his income, while the extraordinary Joe keeps his needs in check, allowing him to turbo charge savings.

2. Prioritise future you, as much as the current you

It's easy for us to kick our financial plans — whether it’s scraping together a home deposit, saving more for retirement or paying down the credit card debt — down the road.

We don’t need to think about it now; it'll be a problem our future selves can deal with.

The trouble is achieving these goals relies on more than hope.

Early retirement requires proper planning, commitment to a bigger goal and maintaining good money habits; you can’t just wing it.

By focusing on future you, as much as the current you, you're less likely to spend on impulse purchases or treat yourself “just because."

According to Adcock, it doesn’t mean giving up the things you love. If you like access to the full-service gym and it enriches your life, then keep it.

But you also need to be judicious about things you think are adding value to your life and consider if they actually are.

3. Know the difference between price and quality

When we make purchases, it's common sense for us to be guided by price and what we can reasonably afford at the time.

But when we make one-off purchases or buy big investment pieces, we can do so under the perception that it’s a premium product or service.

FIRE follower Tanja Hester retired at 38 to enjoy the spoils of Lake Tahoe.  For her, the debate of price vs quality is a big one.

Hester says when shopping she usually errs on the side of quality under the expectation these items hold up better in the long run.

To test this theory and to give some solace to her hip pocket, she ran a review on a few items (ink pen, watch, and sofa) she spent a pretty penny on, to see how they stacked up.

Hester evaluated how the products had fared in terms of use and durability and only one of the items (her sofa) stacked up. And the other two, well, they probably weren't worth the cost.

While modern marketers do a fantastic job at pedalling the quality of a premium product or service to justify its price, it's not a sure thing.

So, weigh up when it makes the best sense to foot the bill for a higher price tag.

4. Don't miss out on life

One of the things, Hester so poignantly identified in her quest for financial liberation and early retirement is the crossroads many of us come to: should I save like a demon or enjoy life?

Hester maintains she didn't get the balance right while saving.

She missed out on a friend's wedding in Italy because she'd rather save than spend, and that’s a decision she still regrets.

Hester advocates making smart decisions to save for the future, but she also talks about the importance of pacing yourself. Your savings goals should still allow you a cushion to enjoy life.

This is echoed by Adcock who says the best way to test this is to choose to spend money on experiences, not things.

So those are the tips from savvy FIRE starters to help you get started about thinking of ways you could reach financial freedom.

If you're feeling inspired, here’s some FIRE blogs you may wish to follow.

4 tips if you're yearning for financial freedom