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The financial habits that can help you retire early

Discover five money habits from people who achieved financial independence, including smarter spending, aggressive saving and investing

Aaron Burden / Unsplash

Retiring early sounds a little like winning the lottery without actually buying a ticket. You leave the daily grind behind, reclaim your mornings and finally have time for the things you kept saying you'd do "someday." But for people in the FIRE movement—short for Financial Independence, Retire Early—early retirement isn't about getting lucky. It's about getting intentional with money long before the last day at work.

A report by Reader's Digest explains that the basic FIRE strategy comes down to a surprisingly simple equation: spend less than you earn, save the difference and invest it so your money can grow. The goal isn't necessarily to live an extremely frugal life. Instead, people pursuing FIRE focus on spending money where it matters most while cutting costs that don't add much value to their lives.

That can mean tracking every expense, rethinking expensive habits, moving somewhere more affordable or finding ways to increase income. It can also mean resisting the temptation to keep up with everyone else's lifestyle. After all, there's not much point in buying the fanciest car on the block if it means working years longer to pay for it.

The best part? You don't have to completely overhaul your life overnight. Many of the money habits highlighted are surprisingly practical and can be started at almost any income level.........

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