The Wall Street Journal ran an interesting piece this week listing the FIRE (financially independent & retired early) movement as a key development in personal finance over the last decade. The overall focus of the story is on the 2010s as the “Decade of Frugality”.
We started our journey to FIRE long before we knew the FIRE acronym and many years before the 2010s began. That said, it’s great to see a positive personal finance trend is making the headlines after the financial debacles of the previous decade and the Great Recession. Society was better known for McMansion mortgages, soaring credit card debt, and widespread ‘affluenza’ at the end of the 2000s.
Below is an encouraging WSJ chart (from the article) on the growing US personal savings rate, based on Federal Reserve data. It’s great to see savings as high as they have been at any point in the last 25 years:
It’s interesting that the chart shows savings fell during the relatively prosperous 1980s and 1990s. You would think economic prosperity would be good for savings, but I guess that hasn’t always been the case.
Let’s hope that the principles of FIRE and living more frugally continue to guide behavior throughout the next decade.
How is your 2019 savings rate looking?
Image Credit: Pixabay
MrFireStation 
Super positive outcome for the FIRE movement if it has moved the needle on the overall US Savings rate. I’m expecting my savings rate to stay in-line with 2019; with the outside chance of hitting the RE button. Thanks for keeping us motivated through the finish line.
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Ooh … ‘Outside chance’? That’s exciting! What needs to happen for you to make your FIRE escape?
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Since my wife and I retired a couple years ago, our savings rate has taken a nose dive to nearly zero. But that was the plan all along as we transitioned into living on our savings. We live comfortably on two military pensions, representing about 75% of our income and investments for the remaining 25% of our monthly needs. Prior to retirement, we peaked at 40% savings rate.
However, we’ve found that our need to save didn’t disappear. In year two, we are having to save again. The savings are now focused on short term goals to fix up our retirement home–putting in a pool and finishing an apartment over our garage– go on some killer vacations 😁 So our savings muscle memory built from pre-retirement has helped us when we decided to do these upgrades and travel by allowing us to carve out savings in the last six months instead of dipping into our retirement investments.
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There’s always something fun to put money aside for, isn’t there? Will the over-the-garage apartment be a rental for you?
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Yes. The spending therefore will become nice added income, or as I suspect, an apartment for one of our four children at some point😆
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Perfect 👍🏻 We has a friend who lives in TN, but works in Washington DC during the week and has a studio apartment above a friends suburban garage. Reminds me of that Chevy Chase movie ’Seems Like Old Times’.
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