The FIRE movement is getting much attention in the personal finance world. FIRE stands for Financial Independence, Retire Early. Here’s the basic idea: FIRE followers typically have well-paying jobs early in their career. They work very hard, scrimp and save at extremely high rates to accumulate a sufficient nest egg to “retire” sometime in their 30s or 40s.

FIRE draws on deep roots: think Ben Franklin, Henry David Thoreau and the “Whole Earth Catalog.” There are aspects of FIRE to like. The idea of spending less on material things and enjoying life more is attractive, of course. So is the pursuit of focusing on finding the time to live your values.

That said, I’m not a FIRE fan. There are far less extreme ways to live a life of purpose and sound finances. For one thing, I’m wary of the practicality of the approach long-term, especially considering that it’s reasonable to expect its well-educated followers will live long lives. Long-term portfolio harvesting plans that work on a spreadsheet often falter with emergencies and health care expenses.

For another, I don’t like the association of frugality with cheapness. People on the FIRE bandwagon are proud cheapskates, at least during the phase of accumulating money. Their approach reinforces the prejudice that frugality is synonymous with penny-pinching. That perspective is wrong.

Frugality is about quality, not quantity. The frugal try to take the environmental and ethical implications of spending into account. Here’s how Simon Wilson Strauss in 1920 captured the essence of the thrifty mind-set in his “History of the Thrift Movement in America.” Thrift, he said, means spending judiciously and consciously to encourage the finer experiences of life: “The skilled workman, the artist, the musician, the landscape gardener, the designer of beautiful furniture … all those, in fact, who, through the devotion of their abilities, contribute to the real betterment of mankind, must be given support through judicious expenditures.”

Lost in the FIRE movement is a sense of purpose or meaning. What is the financial independence for? Work doesn’t have to mean drudgery. The workplace is a community, and work can be creative. For example, look at the rise of an artisan economy with brewpubs, handcrafted outdoor gear, handmade shoes and pottery. Personal finance should support household decisions that give purpose and meaning. Spend wisely. Embrace frugality. But steer clear of the extremes.


Chris Farrell is senior economics contributor, “Marketplace,” commentator, Minnesota Public Radio.