14 Pieces of Outdated Money Advice That Can Derail Your FIRE Plan

FIRE – Financial Independence, Retire Early. That’s the dream, right? Quit the rat race and live life on our own terms. It’s totally doable. Plenty of people join the FIRE movement and manage to retire pretty quickly. And there’s a LOT of advice out there on how to do it. Sadly, much of the advice is outdated or just plain bad.

1. Ignore High-Interest Debt

It’s often suggested to tackle high-interest debt first. However, spreading your payments to cover all debts might sometimes make more sense. It’s about finding a balance that keeps you afloat without overextending on any front.

Or you could go with the snowball tactic, paying off your debts in order of smallest to largest. Every time you pay off a small debt, you put that payment toward the next smallest.

2. Don’t Worry About Your Emergency Fund

money in an emergency fund jar
Image Credit: Shutterstock.

The old advice of a six-month emergency fund doesn’t cut it anymore. With job markets fluctuating, aiming for a nine to twelve-month cushion is prudent. This larger safety net can be a lifesaver when unexpected expenses or job loss hits.

3. Just Focus on Maxing Out Your 401K

Maxing Out Your 401K
Image Credit: Shutterstock.

While maxing out your 401k is beneficial, especially with employer match, don’t miss out on other investment avenues. Diversify your savings into accounts with more flexibility to ensure you’re not overly penalized for accessing your money when needed.

4. Rush to Buy a Home

invest a large amount
Image Credit: Shutterstock.

Owning a home isn’t the financial silver bullet it once was. Consider your lifestyle, mobility, and the hidden costs of homeownership. Sometimes, renting provides the freedom and financial flexibility that aligns better with your life goals.

5. You Can Only Invest a Large Amount

invest a large amount
Image Credit: Shutterstock.

The digital age has democratized investing, allowing you to start with minimal funds. Use platforms that enable small investments to gradually build your portfolio without breaking the bank.

6. Prioritize Paying off Debt, Not Investing

pay off debt
Image Credit: Shutterstock.

While being debt-free sounds ideal, it shouldn’t come at the expense of growing your wealth. Balance paying down debt with strategic investments to ensure your money works for you.

7. Make Minimum Payments

make minimum payments
Image Credit: Shutterstock.

Paying just the minimum on loans, especially if you can afford more, prolongs your debt and accrues more interest. Adjust your payment strategy to chip away at the principal faster, without straining your finances.

8. Stick Rigidly to Old Financial Plans

financial planning jigsaw
Image Credit: Shutterstock.

The financial world is ever-evolving. Don’t be afraid to update your money management strategies to reflect current realities and opportunities. A flexible approach can yield better long-term benefits.

9. Find a High-Paying Job

find a high paying job
Image Credit: Shutterstock.

The job market has changed. High-paying jobs are not as plentiful, and loyalty to a single company may not be rewarded as it once was. Be open to exploring different opportunities and paths to financial growth. I prefer the method of growing multiple income streams. It lets me pursue different interests and skill sets and makes sure that if one avenue dies off or slows down, I still have other sources of income.

10. Live in Austerity to Save More

Image Credit: Shutterstock.

Cutting out all leisure activities for the sake of saving can be counterproductive. Allowing yourself some enjoyment and relaxation is essential for mental health and can prevent burnout.

11. Clinging to Your Car Unnecessarily

family in a car
Image Credit: Shutterstock.

While going carless isn’t feasible for everyone, evaluating your transportation needs and alternatives can uncover savings. Consider carpooling, public transportation, or cycling if they fit your lifestyle and location.

12. Work Multiple Jobs Nonstop

working multiple jobs
Image Credit: Shutterstock.

The notion that working endlessly is the only way to financial stability is outdated. Focus on maximizing your primary income source and seek passive income opportunities to enhance your financial health without sacrificing your well-being.

13. Never Eat Out

cooking a home meal
Image Credit: Shutterstock.

While cooking at home is economical, completely cutting out dining out can diminish your quality of life. Find a balance that allows for occasional treats without derailing your budget.

14. Don’t Talk About Money

discussing money with friends
Image Credit: Shutterstock.

Open discussions about finances can offer new insights and support. Don’t shy away from sharing experiences and strategies with trusted friends or family. A collective wisdom approach can lead to smarter financial decisions.

 | Website

Katy Willis is a writer, lifelong homesteader, and master herbalist, master gardener, and canine nutritionist. Katy is a preparedness expert and modern homesteader practicing everyday preparedness, sustainability, and a holistic lifestyle.

She knows how important it is to be prepared for whatever life throws at you, because you just never know what's coming. And preparedness helps you give your family the best chance to thrive in any situation.

Katy is passionate about living naturally, growing food, keeping livestock, foraging, and making and using herbal remedies. Katy is an experienced herbalist and a member of the CMA (Complementary Medical Association).

Her preparedness skills go beyond just being "ready", she's ready to survive the initial disaster, and thrive afterward, too. She grows 100% organic food on roughly 15 acres and raises goats, chickens, and ducks. She also lovingly tends her orchard, where she grows many different fruit trees. And, because she likes to know exactly what she's feeding her family, she's a seasoned from-scratch cook and gluten-free baker.

Katy teaches foraging and environmental education classes, too, including self-sufficient living, modern homesteading, seed saving, and organic vegetable gardening.

Katy helps others learn forgotten skills, including basic survival skills and self-reliance.

She's been published on sites such as MSN, Angi, Home Advisor, Family Handyman, Wealth of Geeks, Readers Digest, and more.

Leave a Comment