Hi guys! I came across an article about twenty-somethings who are saving for retirement. They also mentioned the FIRE Movement (Financial Independence, Retire Early). Are you familiar with it? Are you saving money using some kind of savings system, too?

36 comments

  2. Don’t spend it on trinkets you don’t need, buy good food to fuel yourself, maybe some nice clothes to look professional if your job requires it

  4. Maaaaan, we’re 40 and screwed so I have zero clue how 20-somethings can do it. Gotta have an amazing job from beginning or start putting away at start of your very first job. (And never have an emergency where you need to take a loan from it)

  5. I was fortunate that my folks turned me on to it early, and I am doing the same for my kids. I started mowing lawns around 8, and would earn about $40/week. My dad offered to match whatever I would put away for college, so I would keep $20, save $20, and he would match the $20. I never thought much of it, until I needed it, and it had grown a fair amount over that time. Now, my kids that are not even teenagers yet, have saved over $1k, just by being willing with their birthday money, Christmas money, etc. They see the benefits of it, and feel like they are really sticking it to me by doing it.

    When I was on my own and got my first real job, I signed up for the company match immediately. It was “free” money, and if you never have had it, you never will miss it. I think I started saving or investing $10/week, and then would save or invest any “found” money like tax returns or anything of that nature. If I would get a raise, I would increase it just a little bit – I wasn’t used to having it, so I didn’t miss it. I just progressed that way over time. When I had a sufficient emergency fund built up, I started investing anything after that.

    It can seem like an impossible hill to climb, but I just kept telling myself that even if I never got to where I wanted to be, I will be in a better place than if I did nothing.

  6. I’m in /r/fire so yeah I’ve heard of it šŸ˜€

    The gist is generally to live on significantly less than you make, and make use of tax advantaged accounts (401k, 403b, 457, IRA, HSA, etc.)

  7. In my 20s i lived in a less desirable area with a bunch of roommates. At one point we packed 5 bros into a 3 bedroom. Guess how many of us had girlfriends lol. I paid down debt quickly but still spent a ton on food and bars. My advice would be to track your expenses. Back then i used excel but they have apps for that now.

  8. Iā€™m in my mid 20s and max out my 401k, Roth, and also have extra to invest. Itā€™s a 2 step process

    1. Get a high paying job
    2. Donā€™t spend your money on stupid shit and keep your expenses relatively low

    Both easier said than done.

  9. I save money by being a reclusive weirdo with no social life. It’s surprisingly effective.

  10. In my 20s and I put over 20% of my income into retirement savings with the goal of being able to be retired comfortably at 55

  11. A. Have a job that can your living expenses and have money left over for your savings/retirement

    B. Live bellow your means

    I’m not great at either of them rn but that’ll hopefully change in a few years

  12. FIRE definitely seems to skew to people with very high earning jobs and also very few expenses. So uh yeah, I’m sure its easy to do that if you’re 25, earning 6 figures, not married, no kids, and very unlikely to have sudden medical expenses.

    I save money by putting some away when I can. So when tax refund, credit card cash back, annual bonus, etc… comes in, I take a chunk of that and stash it away. I also contribute to my 401k a bit above my matching.

    My wife and I only have one car and that helps keep expenses down too.

  14. I havent had extra income to save at all in my entire life. Came from a low class family -> homeless -> being a university student. My hope is that if I can somehow pay off my debt to start but I’m in my mid thirties and every single investor person I talk to tells me Im in too late and unless i save half my paycheck ill never afford retirement so IDK what I’ll do. Just keep living and working i guess.

  15. I put 15% in my 401k.

    Another $2k per month to dollar cost averaging in stocks.

    I keep a certain flat amount in my regular bank account as my spending money / emergency fund.

    After all that, at the end of each month, any excess left in that account above that flat amount, I move to a money market account to get that higher interest.

  16. /r/FinancialIndependence is a great sub, but in general personal finance is stupid simple. Thatā€™s not to say itā€™s easy of course. Iā€™m on track to retire in my late forties. General advice would be focus on maximizing income, and cutting expenses on anything thatā€™s not a personal priority.

  17. I save a higher % of my income than most people do, yes. Built up a reasonable emergency fund, the rest to investment/retirement accounts – primarily automatically – %’s of my pay directly deposited there.

    Mostly I keep my major/fixed expenses pretty low (I could afford a larger place or flashier car, I don’t really have much reason to want either), which lets me run a pretty nice lifestyle in terms of a lot of travel and not worrying about how much dinner out or the like costs.

    That said….that still only works when you make a decent enough living to have choices rather than be spending everything just to make the cheapest lifestyle you can find match your income.

  18. Iā€™m a bit older than 20 something but I have always been a terrible saver. Over the past year or so I have gotten better.

    My system

    – retirement savings is automatically taken from my paycheck. It is treated as like a tax in my mind.

    For everyday savings I use the two bank system. One bank has a debit card and is for liquid money. The other bank is strictly savings. I am able to transfer money between them but it takes a few days. No more dipping into savings for an expensive night out.

    I have 60% of my paycheck direct deposited into the savings account each payday. I do pay my rent from this account also.

    My liquid account gets the other 40%. It is used for other bills (phone, electric, etc) and daily expenses. If there is anything leftover in this account the day before payday, it gets moved into the savings account.

    Although there have been times I have had to dip into the savings account, it is growing with little effort on my part. I have peace of mind knowing there is a cushion of my own money just in case.

    I started my savings ā€œplanā€ putting 40% in savings and gradually increased it. The 60/40 ratio works for me. Paying my rent from it eliminates feeling broke around rent time.

  19. I’ve heard of it, but I’m really not interested in following it, at least not any extreme version.

    When I was in my 20s, I was on the poor side because I chose to work in a poor paying but idealistic and fun field (field biology research, I loved the work). As a result, I got very good at saving money while not actually being able to save much because I didn’t have much. That choice made retiring extremely early extremely hard.

    In my 30s, I moved to a better paying field while only slightly increasing my spending, and remaining in work that I both enjoy and feel good about ethically. I’m 40 now. I’ll probably be able to at least move to part time work sometime in my 50s, if not fully retire. I may choose to do so, I may not. If I had kids, I’d probably be working until they were grown regardless of my age.

    Most of the people I hear about trying to retire super early, like in their 40s, are young and in extremely high paying jobs that they dislike. Not all, but most. People planning to retire in their 50s seem more like they’re enjoying their life, just living frugally and usually childlessly.

    As someone who basically sacrificed earning money in my 20s in order to do things I’d love to do after retirement but probably won’t have the physical fitness or energy for? I think the people working like crazy their early years in order not to work their later years are backwards. The now is guaranteed, the future is not.

  20. Have a good job, a high earning spouse, and no kids. Bought a house in a medium COL area in 2018 that we refied to 2.5% in 2020. The money just kinda piles up even after maxing out 401k, backdoor Roth, and HSA.

  21. I try to save money but I don’t really make enough to take advantage of everything. I just have a ROTH IRA and another regular stock account. I don’t even have a 401k available as I’m a contractor.

    Live with parents to save rent.

  22. My parent’s paid for my school and I stayed at home longer than I should of. I am in my mid 30s and I have roths and maybe 6 months of salary in savings in case I lose my job. I don’t use an app.

  24. Yup. Currently on the path to FIRE and financial independence. I donā€™t personally know anyone else doing it, though.

  25. My husband and I are older than a bunch of reddit – but we’ve lived substantially beneath our means for a long time. We had no money and a bunch of student loans when we first got married. We both also had horrible jobs with horrible bosses at the time. So we felt trapped.

    We made a pact that we’d base our standard of living on one income and save the rest. We weren’t always able to do that, but we kept pretty close to it. So we have a condo vs a house, but it’s paid off. Big purchases, such as furniture, we bought with bonus money. We had one car for a long time. Now we have two. Paid cash for both. Student loans are gone.

    We still took trips and traveled. I had a travel heavy job for a number of years, so I had tons of points.

    We’re in a comfortable spot now and on track to retire in our early 60s.

  26. I have never made all that much money so the idea of retiring with $2m in the bank at age 40 has always seemed bizarre. I have never been interested in living like an ascetic in order to save 60%+ of my income.

    My strategy has always been to put a large chunk of money into retirement accounts automatically from every paycheck. I have saved at least 20% of my income in retirement funds each year (in addition to whatever amount my various jobs have also contributed.) This is mainly because I am afraid of not having enough money when I retire. My mom has a pension and owns a house, and she is fine. My dad has neither, he is not as fine as he wants to be. So, all of my focus has been on building my relatively low pay into decent retirement funds.

    I have a small “emergency fund” that I just toss a few hundred dollars into every month, but I also use it occasionally for big expenses etc, so it’s very up and down. Rarely has as much as $10K in it. Recently I took several thousand $ out of it and bought my first treasury bonds, which have a guaranteed interest rate of like 11%. I hope to leave that money there for a long time. What I don’t really have is a big chunk of “savings” that I could use as, for example, a down-payment on a house. That’s my next goal.

  27. Yes. I’m Gen z with 20k cash saved and 5k in stocks. I made about 52k last year.

    I’m young, living at home. That means no kids, paid off car, no bills. I don’t even pay car insurance.

    I was going to buy a tesla but decided to invest. I basically day trade until I make 50 bucks a day. Then reinvest. I have my cash in a 4 percent annual return at robinhood. Ready to invest at a moment notice.

  28. >Are you familiar with it?

    Yes, though not the term. I don’t want to wait until I’m 50 before I can retire. So I’m saving money now to ensure that I can stop working at any time and / or so I can retire sooner and don’t have to rely solely on retirement money to get by.

    I also like being able to come and go when I please and take time off when I want. Having a retirement is good though, but I don’t want to be held down on just that for such a large portion of my life.

  29. Iā€™m using the system of spending all my disposable income living in the moment whilst Iā€™m young and healthy and saving nothing and then just killing myself instead of retiring

  30. I think a lot of the people who preach FIRE as this amazing thing that everyone should be doing are out of touch with reality. Not everyone is able to get the high-paying job needed for this to work. People with chronic health issues are not able to reduce their spending in the same way.

  31. In my 20s I focused more on travel and hobbies than saving which I donā€™t regret at all. Despite not having a high paying job I still managed to save up about 1K a year.

    Now Iā€™m 30 and in a significantly better paying job thatā€™s going to make it a lot easier to start contributing to my retirement accounts while still have disposable income.

    Really the best savings plan is going to depend a lot on your personal circumstances and what you want to prioritize in life.

  32. FIRE is represented by people with high paying jobs who were lucky/fortunate to score them at younger ages.

    I got lucky and had a live-in job my first 2.5 years of professional work, so no rent or utilities, and I had access to a cafeteria for three meals a day (with a free meal plan). I saved like a motherfucker those 2.5 years knowing I wouldn’t be there forever. Now I’m on my own and I’m lucky to be able to put $100 away per month.

    I actually just filled out a form at work to max out my retirement plan contributions so my take-home pay is about to go even lower, which is gonna suck, but as to your question, “saving” is now being put into my retirement accounts mostly, plus what little I can muster up to put away in a regular bank account.

  33. I’m working on going FIRE. I don’t use any particular savings system, and could probably be more efficient with getting to FIRE than I am, but max 401k, max HSA, invest a fair amount in normal investments, save in a high yield savings account.

    The biggest “system” I use is just budgeting.

  34. I have a 401(k).

    In addition to that, I’ve got a weekly auto-transfer set up on my bank account to put 10% of my salary into savings.

  36. so many different ways to save money but no matter which way i do it i always start by spending and saving very minimally for one month. then whatever leftover i have from my paycheck sits in my account and is my start. i will always have one month of pay in my account.

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