Live now vs Save for FIRE….

I read a wonderful article today written by my fellow Belgian FI blogger AmberTreeLeaves. The article of his title was “endless doubt on FIRE“. I was behind on my FI blogger reads and read it a week too late. But, the article was very thought provoking and I would really recommend a read.

Since there were already quite a few posts, commenting there was probably not going to be too helpful…hence this new post 🙂 Hope AmberTreeLeaves does not mind stealing an idea for a post from his blog!

That post by AmberTreeLeaves raised a conflict that I often had and continue to have within myself. One sentence from the post captures this conflict very well: The conflict is mainly between travel /live now and prepare FIRE.

I go through the same conflict in my mind….not just with travel, but also things like buying a car, etc. My parents sacrificed a lot in their present and postponed all their enjoyment to the future. And it did not end well. I went through some years where I did the opposite…living for the now..I guess I was running away from my parent’s philosophy. And when I discovered Financial Independence, I swung the other way….live for the future only and my family was none to happy about it 🙂

But, I have now come to a fair medium. I have come up with a decision framework that helps me rationalize live now OR live for the future vs the benefit I am getting. This has helped making sacrifices easier. Let me state two example cases.

  1. Lets assume a family vacation costs $5000 on average and hypothetically our family’s post tax take home salary is $60000. My requirement is that I want to have one vacation each for the next 10 years before my kids head out to college. So, I need roughly $50000 to fund all the vacations. $50000 adds one additional year to my family’s expected FI target. Considering that we will never get that many chances to spend time together as a family after kids head out to college, this addition is worth it to me.
  2. Now consider purchasing a new luxury car like some of my friends have. The car costs $80000 and after financing and maintenance costs, it can rise up to $90000 at least…yes, I could not believe it 🙂 With the same post-tax family salary of $50000 per year, it would add almost 2 years to my expected FI target. For me, getting freedom 2 years earlier is more important than driving a luxury car. Don’t get me wrong…I like the cars…I have sat in them and I think they are awesome….but not awesome enough compared to achieving freedom 2 years earlier…for me.

I am trying to apply this framework for every major decision…it had helped me rationalize family vacations and buying a new car. Next is applying this for buying a home. I am curious how do others deal with this conflict. Lemme know your thoughts please.

And once again, thanks to AmberTreeLeaves for a wonderful and thought provoking post. It took me back in time to a period when I learnt some important lessons.

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5 thoughts on “Live now vs Save for FIRE….

  1. Thanks for adding this framework to the discussion.

    Looks like you have found a good balance… I think we are on the same page.
    With our travel fund, we actually delay the FIRE date. As you say, going on holidays with the kids needs to happen before they get too old and independent… Worth the money.
    Cars are gorgeous. One day, I would like to drive a Tesla … just not now. A regular car does the job as well…

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  2. Vacations & holidays with FIRE are funny. We are putting off travelling now, so we can travel when we are older instead. I suppose investing more and letting compounding do its thing is worth the wait.

    At the moment we are just trying to have the ‘cheap fun’ that is available to us. We will save the expensive fun, such as overseas holidays for later in life.

    Tristan

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    • Thanks for dropping by!

      Every family’s journey is unique…so, if postponement works for you, then why not I say! Make sure you add some stress breakers in between…it could be travel, camping, etc and the journey towards FIRE will be smooth!

      Awesome best wishes on your FI journey.

      Liked by 1 person

  3. Looks like you’ve found the right medium. Live now vs. save for FIRE decision will be different for each individual. While it’s great to live now, we all need to plan for the future. Finding the right balance is so important. If we just keep saving and not enjoy life now, do you think you can really enjoy your life once you reach FIRE? Probably not. 🙂

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    • Thanks for dropping by!

      It is a constant battle to achieve the balance and get the entire family on the same page. But, converting the cost into additional years before FI seems to be working for now.

      Like

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