This article is part of a new HerMoney Healthline series where we ask pros in a wide range of fields for their top tips on making it through the social and economic crisis caused by the coronavirus pandemic. Browse past HerMoney Healthlines here.
If anyone can save during tough times, it’s people who live by the FIRE principles, like Grant Sabatier. Grant is a leader of the “Financial Independence, Retire Early” (FIRE) movement, and author of “Financial Freedom: A Proven Path to All the Money You Will Ever Need.” Sabatier went from broke — he literally had just $2.26 in his checking account, and $0.01 in savings — to millionaire, to financially independent in roughly five years. (Oh yeah, and he’s only in his 30s!)
FIRE is a topic we love covering here at HerMoney. The concept is simple, but the execution is more challenging — the goal is to retire early (as early as your 30s or 40s) by saving and investing between 50% and 75% of your income. Yes, those numbers are eye-popping, but many people have found ways to make it work, by keeping their expenses low and raising their income. It’s not possible or right for everyone, but there are some amazing takeaways from the movement for everyone, even for those of us who don’t want to retire early.
Ask The Important Questions
Think about the life you were living prior to the pandemic and ask yourself: Do you want to live that life? The silver lining of this whole thing, if there is one, is that things have slowed down. Granted, that’s the very thing that’s driving many of us stir-crazy at the moment, but we’ve also been given some time to reflect on the financial life we’re living and the overall path we’re walking. When is the last time you thought in earnest about your retirement date? When is the last time you sat down with your partner to discuss your bigger money goals together, like buying a home, having a child, or saving for higher education? If you’re working from home, take that hour that you would have spent on your daily commute and sit down and start asking these questions.
Know What You Want Your Money To Do For You In Future
FIRE has always meant living life on your own terms, and using your money to do just that. Specifically, think about the trade offs you were making for money — do you want to make those moving forward? Now is the time to think critically about how much we’re spending — every day, we are encouraged to consume, and oftentimes the only way out of the spending cycle is introspection, and making a conscious effort to think about the future in the present. In another decade, what would you like to be doing with your life? What are ten things you’d like to do before you die, and how can your money help you get there?
Save Every Penny You Can
If you’re still earning a paycheck while working from home, your expenses are likely lower (no commute, no lunches out, no happy hours, no dry cleaning, the list goes on), so you should be trying to save as much money as you possibly can during this time. While simply not spending this money is a great start, be proactive and move some of this money into your savings or investment accounts so it’s secured for the future.
Be Generous Whenever Possible
For those of us who have job security and are still bringing in our earnings, it’s time to embrace the spirit of generosity. Who in your life is hurting right now? What charities do you support, that could use an additional donation right now, to fill people’s immediate needs? Millions of Americans are struggling right now, and those of us who can should donate to the people who have less.
Embrace (And Breathe Through) The Stress
Guess what? If you’re worried right now, you’re absolutely not alone. Everyone is stressed about money — even those who have saved plenty of money and who were prepared for the pandemic. No one likes to see the economy hurting, or millions of our fellow Americans out of work. There are still a lot of unknowns right now, which are anxiety-provoking even in the best of times. Embrace the stress you’re feeling, but know that this, too, shall pass. We can finally see the light at the end of the tunnel. We are coming out of this in a positive way, and people will be saving more than they ever had before when this is all said and done.
If you or a loved one are struggling to make it through these economic times, we’ve got you covered at HerMoney, with a complete list of coronavirus resources, including a breakdown of 401(k) FAQ, details on the stimulus checks and who qualifies, a look at how to file for unemployment, and who’s hiring now.
If you’re interested in learning more about the FIRE movement, over the years we’ve broken it down with some incredible guests, including Jamila Souffrant, Scott Rieckens, Jonathan Mendonsa, Brad Barrett, and Vicki Robin. Also, you can check out Sabatier’s podcast on thriving during the pandemic here, and his original HerMoney podcast about the FIRE movement here.
More From HerMoney Healthline:
- Frank Abagnale, author of The New York Times’ Best-Selling book “Scam Me If You Can,” on how to stay safe from financial scams during the coronavirus
- Melanie Katzman, author of the best-selling book, “Connect First: 52 Simple Ways To Ignite Success, Meaning, and Joy At Work,”on how we can stay connected
- Charles Duhigg, author of “The Power of Habit” and “Smarter Faster Better,” on how we can all rock the whole “working from home” thing
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