Financial independence, or the ability to retire early and work when you want, is the latest craze in the finance world. But here’s the truth: if your partner isn’t on board with saving large percentages of your salary, then it’s nearly impossible to achieve this goal.
Here’s how Financial Independence Retire Early (FIRE) works. You save enough money to never have to work again. This can be done through a variety of tactics, like passive income or investments. But most people pursuing financial independence tend to have a few things in common: high savings rates, automated finances and optimized earnings.
Financial independence doesn’t happen overnight. For most people, it’s a process that takes years. That’s why it’s important for FIRE millennials to find a frugal money match. Take a look at 3 tips from 3 red hot millennial couples who are dating while handling FIRE.
#1: Know your individual financial goals
Here’s the deal—it’s hard to find your perfect money match if you’re unclear about your own money goals. This is especially true for people who are pursuing FIRE. The concept of early retirement is becoming more well-known, but it’s not the norm, and that’s why it’s important to clearly define and articulate your own money goals.
Years before 27-year-old Gwen Merz met her boyfriend Erik Tozier, she started working towards financial independence. For Merz, it was about personal freedom.
“Financial independence allows me to make decisions I wouldn’t otherwise have the luxury to make. I saved for five years and accumulated $200,000. That money allowed me to quit my job and move to Minneapolis to live with my boyfriend, and also allowed me to take a chance at becoming an entrepreneur,” says Merz.
For Stephanie Kibler, a 31-year-old living in Fairfax, Virginia, pursuing financial independence began as a way to become “rich” in the traditional sense—fancy cars, expensive clothes and big houses. Now, it means much more than that.
“The more I learned about money and financial independence, the more I realized that what I wanted was not so much the stuff that I thought rich people had. I wanted the freedom to buy things that brought value to my life without using debt to do it,” says Kibler.
“It’s not necessarily about buying anything fancy or expensive for me, but knowing that I can buy things that I want or need without relying on an employer or my next paycheck to supply that purchasing power,” she says.
#2: Be honest about your dating deal-breakers
Pursuing financial independence and early retirement is not for the faint of heart. It requires that both partners work together to make short-term sacrifices. Sometimes this means cutting expenses and earning more through additional hours at work. Because of this, most people who pursue financial independence have some sort of dating deal-breaker when it comes to a partner’s money habits.
“A large amount of consumer debt was a deal breaker,” says Merz.
“If they lived beyond their means and had a lot of debt from over-consumption, that would signal to me that we weren’t going to be compatible. I was prepared to deal with student loan debt as that’s at least necessary in some situations. I also looked at their attitude toward debt. If it was normal to have debt and they weren’t inspired to pay it down quickly, I knew we wouldn’t be compatible,” Merz says.
For some millennials pursuing FIRE, similar money beliefs are key when it comes to a romantic partner.
“If my girlfriend were a big spender, it would have made our relationship much more difficult,” says Cody Berman, a 22-year-old in Massachusetts.
“Given my inherent frugality, we would have surely ended up arguing about a purchase or spending decision,” says Berman.
For Kibler, it took personal experience to figure out her financial deal breaker before she met her husband, Grant Kibler.
“I once dated a guy who very literally didn’t believe that he would live to retirement age. He didn’t see the point in saving for retirement, but more importantly he was generally reckless with things like credit cards and health insurance…It ultimately did not make sense to date someone who couldn’t picture himself growing old—someone who believed that I would outlive him by several decades and wasn’t making financial plans for that.”
#3: Be comfortable growing together, not apart
When it comes to maintaining a successful long-term relationship, it’s crucial that you and your partner grow together. For couples pursuing FIRE, this often means growing jointly-held investments and savings. It also may mean growing together in terms of lifestyle dreams and goals.
Even if you and your partner begin the relationship with different money interests, it’s still important to find common ground.
“At first, I was a full-blown finance nerd. I am all about the numbers and could look at spreadsheets all day,” says Berman.
“My girlfriend, however, couldn’t care less about the math, tax hacks, or technical side of financial independence. She eventually got on board when she realized we could live a life of absolute freedom. She could pursue her dream projects and we could travel the world,” he says.
If you’re in a happy relationship, but your partner is reluctant to seek financial independence, Berman says that it’s important to “figure out what your partner wants and use that ‘want’ to pitch the FIRE lifestyle.”
Another way to ensure that you and your partner are growing together instead of apart is to plan finance dates. For Kibler and her husband, money dates are monthly occurrences where they discuss finances to help keep them on the same page.
“We sit down once a month at the kitchen table with my laptop. I show him our numbers, and we discuss what we’re going to do with our savings for the month,” says Kibler.
“We have a lot of little conversations about money throughout the month, but we don’t worry about it too much because the course is usually set during those monthly meetings. The little conversations throughout the month are course corrections, like piloting a plane, to keep us on the flight path we agreed to already.”
Pursuing FIRE requires a lot of dedication and planning, but for these couples, working together towards a shared goal of financial independence has made all the difference. Whether you’re single, married, dating or somewhere in between, talking about money with your other half is always a wise idea.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal and accounting advisors before engaging in any transaction.