Members of Ireland’s Fire community are experts in thrift, and they save up to 75pc of their salaries. ‘Fire’ stands for ‘financial independence, retire early’.
hey often have well-paid jobs in the tech industry or financial services. But they drive old second-hand cars, avoid convenience stores, have cheap, oven-free ‘easy dinners’, and roam the aisles of supermarkets looking for discount deals. They may shun the luxuries of four- or five-star hotels for cheap camping holidays.
Do they have lessons for the cash-strapped public at large as we endure the cost-of-living crisis?
The aim of this lifestyle movement, which became popular among millennials over the past decade, is to put away so much money early in their career that they give up the shackles of a full-time job by 50 or even younger.
They have been inspired by a guru of frugality, a software developer known as Mr Money Mustache. The Canadian blogger, whose real name is Peter Adeney, brought the movement into the mainstream. He saved so much money in a decade that he was able to retire as a software developer by 30.
According to the Washington Post, Adeney describes the typical middle-class lifestyle as an “exploding volcano of wastefulness”.
Tens of thousands have spent years honing their skills in penny-pinching and discuss their approach at meetings, in blogs and in numerous podcasts.
Michael Houghton, a 38-year-old New Zealander who lives with his wife and three boys in the Limerick suburb of Castletroy, saves three-quarters of his income as a software developer.
There are three methods used by the Fire community to achieve what they consider ‘financial freedom’: saving money through thrift; increasing their income, often with a ‘side hustle’; and investing their savings.
At 38, Houghton is in his fifth year “pursuing Fire” and says he has accumulated an investment portfolio worth €300,000.
He reckons that if he continues on his current path of extreme saving and investment, he could retire in four years. But he plans to continue working, at least some of the time.
Houghton says he has made huge savings since he gave up drinking alcohol in 2019. He sometimes has alcohol-free beer, but is just as likely to stick to sparkling water.
“It’s difficult, when having a fresh pint of Guinness in a pub is one of the best things about being in Ireland, but when you have kids, and you are getting up the next morning, drinking is not worth it,” he says.
His kids tend not to get the latest games consoles, and he says they make do with older versions. There is a lot of money to be saved by being just a little behind the times technologically.
“We were given games consoles from families that had outgrown them, because they were getting a later model,” Houghton says. “Our kids were perfectly happy with the older model we got for free, and the second-hand games are dirt cheap.”
He says his outlook is shaped by his upbringing in New Zealand, where consumer goods tend to be expensive and harder to get, because they have to travel a long way.
“You end up putting up with the things that you have,” he says.
The family goes to great lengths to cut food waste and reduce grocery bills by planning meals carefully.
“We’re a five-person family with three boys. So we aim to spend €30 per day. So, if we were shopping for three days, we’d aim to spend €90.”
The family has at least one oven-free ‘easy dinner’ every week. He says dinner does not always have to be a cooked meal; it could be leftovers or something like ham sandwiches.
Takeaway meals are rare. If a family spends an average of €30 per takeaway, cutting out one a week would save about €1,500 a year.
Houghton, who presents The Irish Fire Podcast, says he believes in investing in savings to make savings.
That means he is prepared to make a significant outlay if he believes he will recoup the cash and make significant savings in the medium to long term. He spent over €8,000 installing solar panels that heat water and generate 83pc of his electricity, and has already slashed his energy bills.
He has also responded to soaring motoring costs. He traded in a petrol-guzzling 2006 Toyota Corolla for a much more fuel-efficient 2013 diesel Renault Scenic costing €6,000, and his fuel bills have plummeted.
Houghton says it is important to plan trips in the car carefully to keep costs down, and sticks to a tip learned from his father to inflate the tyres at exactly the right pressure to save on diesel.
“If I have to drive somewhere to shop, I don’t just factor in the cost of what I am buying,” he says, “I also factor in the fuel cost.”
He adds that it sometimes makes more sense to buy everything you need all in one day, rather than making a number of trips during the week.
Emer Farrell, a software engineer in her late 30s living in Birr, Co Offaly, is one of the most prominent members of Fire, with more than 14,000 followers on her Instagram account.
Her page tells of her “journey to save money and reduce waste” and how she paid off nearly €28,000 in debt in one-and-a-half years. She saves €3,000 a month. By the age of 50, she hopes to have saved enough to retire.
Farrell’s @onefootinthesave social media page aims to go “head to head with the cost-of-living crisis”.
One of the approaches she favours is sharing resources to save money. Visitors to the page are advised to borrow outfits for big events and to house-swap with friends for a “good-value holiday”.
She also recommends car-pooling and “sharing food with neighbours to minimise food waste”.
When it comes to socialising, Farrell recommends:
⬤ meeting friends for a walk and picnic instead of expensive lunches;
⬤ a soft drink or water in between alcoholic drinks;
⬤ being the designated driver and not drinking alcohol at all’
⬤ Come Dine With Me-type meals with friends at home instead of restaurants.
Dave Goggin, a former sales manager with Electric Ireland who is married with a two-year-old son, was an early adherent of Fire. He has a blog, Firedave.com, and now runs a free switching service, Dolphin Utilities.
Fire is a lifestyle movement for people who want to move away from consumerism and buy time back, he says.
“I knew something was missing in my life and I asked, ‘Is it just the grinding nine-to-five?’ I thought to myself that there has to be more to life than doing a job for the next 50 years.”
Like many other Fire members, Goggin believes in overpaying on his mortgage so that he will lift the debt earlier, and he also clears credit-card bills immediately so that he does not pay interest.
Like others in the movement, he shuns the expense of a new car and a car loan with big interest payments.
“I think to myself how many hours I would have to work to recoup the money from buying the car,” he says. “It’s like having another mortgage.”
He says a new car drops in value “quicker than a brick” and prefers a vehicle of a certain age that will retain its value. He always pays in cash.
From his expertise with his switching company, Goggin says householders should be switching gas and electricity providers every year to get the best offers.
“A lot of people are still on rates with no discount applied,” he says.
He encourages people to be active to secure discounts on bills. Rather than renewing their account with their insurance company automatically every year, he advises people to get in touch four weeks before the renewal date and ask: “What are you going to do to keep me?”
When booking holidays, Goggin advises people to travel on Mondays and Tuesdays, when plane fares tend to be cheaper.
Rather than booking expensive hotels for €300-€400 a night, Goggin and his family took a tent and a fishing rod to Castlegregory, Co Kerry, this year for a camping holiday.
Members of the Fire movement globally tend to have an FI (financial independence) number.
This is often arrived at by estimating their living expenses and multiplying that figure by 25. So if a family lives off €25,000, their FI number would be €625,000. This is the target number for saving where, in theory, they could retire or be financially independent. When they reach that figure, they live off this amount by drawing down 3-4pc a year.
Goggin aims to save 70pc of his income every year but, like others in the Irish Fire movement, he has no intention of retiring early.
“The more I go down this path, the less I want to stop and do nothing,” he says.
Many Fire enthusiasts aim to pursue a ‘passion project’, and that may involve working in the community or doing something they enjoy.
Of course, there are no guarantees that their investments will build them a nest egg that would enable them to quit.
In the US, Fire investors typically put their earnings into exchange-traded funds, investments that often track the performance of the stock market. In recent months, shares have been more volatile, and inflation has eaten away at savings.
Fire investors here, such as Michael Houghton and Dave Goggin, are more inclined to invest in property.
Of course, to save vast amounts of money, those who adhere to the Fire philosophy have to have a reasonable income in the first place if they want to save 50pc or 70pc of their earnings.
For those on low incomes facing high rents and spiralling energy costs, that kind of saving rate is likely to be impossible.
Fire adherent Mrs Money Hacker, a Cork-based blogger who prefers to remain anonymous, works as a business systems analyst and saves about €20,000 per year with her husband.
“Depending on what we do, we could reach financial independence in between eight and 14 years,” she says.
“We are currently looking to sell our home and move to a cheaper place outside the city. Remote working has opened more options to move out of the city and reduce our living expenses further. We are happy to buy something cheaper because of the financial security it gives us.”
Not every Fire enthusiast takes frugality to extremes. There is ‘lean Fire’, where participants try to scrape by on a tiny amount (once they have made their savings), and ‘fat Fire’, where they continue to live on a healthy income but still aim to retire early.
As a single mother of three children aged between 13 and 21, Limerick-based start-up consultant and Fire enthusiast Clara Galvao says, “I am a frugal person, but I am not a radical saver; I am a balanced saver. My aim is to have financial independence, not early retirement.”
Galvao, who is Italian, aims to save about 25pc of her income every month. She takes her children on holidays and she saves up the money for the break.
She buys the same amount of fuel for the car at service stations as she did pre-Fire, but reduces her number of trips so that it lasts longer.
One of the best ways of saving is to cut out impulse buying, particularly with clothes, Galvao says.
“I would never go into a shop to buy clothes on a whim. I would go in once or twice a year and buy them in the sales.”
Aoife Gaffney, who runs money-mindset mentoring service Prudence Moneypenny Coaching, is not a member of the movement, but has been interviewed on The Irish Fire Podcast.
She tells the Independent that saving works best if it has a positive goal.
“If your mindset is that ‘we are doing this as a family so that we can go on holiday next year’, or ‘I am doing this so that I can shave 10 years off my mortgage and stick it to the bank’, it makes everything so much easier.”
There is a difference between frugality and prudence, she says.
“You could tell someone to turn off the light, but then they end up falling down the stairs.
“Money only has value if it’s moving, especially with inflation. A lot of people are sitting on cash up the chimney, under the bed or in a bank account. It’s losing value.
“It needs to do something,” Gaffney says. “Most financial planning services are complimentary. Sit down with someone — or maybe a few people — and get some independent advice on good ways to move that money.”
https://www.independent.ie/business/personal-finance/want-to-retire-at-50-how-to-cut-your-cost-of-living-by-irelands-most-devoted-savers-41975132.html Want to retire at 50? How to cut your cost of living, by Ireland’s most devoted savers