The FIRE movement—shorthand for financial independence, retire early—emphasizes aggressive saving and strategic investing to build a nest egg large enough to stop working well before the traditional retirement age. Oftentimes, participants save more than half their income to build seven-figure portfolios that will sustain them in early retirement.
Andy Hill, a family finance coach who pursued traditional FIRE before pivoting to a more flexible version of the movement known as Coast FIRE, doesn’t think everyone needs to accumulate millions of dollars to achieve financial freedom.
There’s a simpler, more sustainable path, the 44-year-old told Business Insider: “Coast FIRE, combined with FU money, is the cheat code for the FIRE movement.”
Coast FIRE still involves front-loading your investments, but the goal isn’t to stop working altogether. The goal is to get to a point where you can stop contributing to your nest egg and “coast” into retirement. You can then redirect that money toward other priorities, whether that’s spending more on experiences, working fewer hours, changing careers, or starting a business.
Hill’s Coast FIRE number was about $550,000 invested by age 40. Assuming a 6% annual rate of return, that balance could grow to roughly $2 million by retirement age, which he said was “plenty for us to live on.” Had he been pursuing traditional FIRE, his target would have been significantly higher.
The second part of Hill’s cheat code is “FU money” — a cash cushion that gives you the confidence and freedom to walk away from a job or situation that no longer aligns with your values.
Hill, who felt trapped in a stressful corporate marketing job, determined he needed 12 months’ worth of living expenses in his FU fund before he would feel comfortable leaving behind a steady paycheck and trying something more entrepreneurial.
Courtesy of Andy Hill
In 2020, he and his wife, Nicole, reached both their Coast FIRE number and their FU fund goal. It allowed Hill to leave corporate America and focus on turning Marriage Kids and Money — a blog and podcast he started as a side project in 2016 — into a full-time business. Nicole also left her corporate job and attended trade school to become an aesthetician.
Hill views FU money as a bridge between where you are and where you’d like to be: “It helps you walk into a life that you are excited about.”
How to build your “FU fund”
Hill recommends keeping FU money in a high-yield savings account, where it remains accessible while earning a higher return than a traditional savings account.
The first step to building that warchest is knowing where your money is going.
“Understanding our expenses was super key to understanding what we actually needed to live on and what was realistic for Coast FIRE and FU money calculations,” he said. To stay on track, Hill and his wife held monthly money meetings to review their spending, discuss upcoming expenses, and evaluate their progress toward shared financial goals.
“It can be extremely revealing when you look at the numbers and say, ‘Does this really align with where I want to go in life or our family values?'” he said. “And if it doesn’t, it’s an opportunity to eliminate, modify, or change it.”
When looking for savings opportunities, Hill recommends focusing on the biggest spending categories first: housing, transportation, and food.
“The bigger expenses matter the most,” Hill said. “Those are some of the harder questions to ask yourself: Do I actually need this house? Do I need these cars? Are they helping me get where I want to go?”
He cautions against treating financial independence as a game of deprivation.
“It can’t be about finding the cheapest option. It can’t be about what’s the most frugal hack here, because you need to also consider life enjoyment,” he said. “I like to look at the expenses that don’t kill your joy first.”
Increasing income is the other side of the equation, especially in today’s inflationary environment.
“We really need to figure out how to combat inflation by inflating our own income,” he said.
Start with your current job: Can you ask for a raise, go for a promotion, or work overtime? Next, consider a side hustle that leverages an existing skill.
Whether through spending cuts, higher earnings, or a combination of both, the goal is to create enough financial breathing room to build a cash cushion that expands your options.
“FU money allows you to move toward something that’s better,” Hill said.
