3 Common Money Mindset Traps of Late Starters to FIRE and How to Overcome Them

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We all know what is good for us.

More exercise.

Eat better food.

Save for retirement.

Sometimes, we even know HOW we should go about doing it.

So, what is stopping us? Or preventing us from starting? What is the difference between those of us who persist and those who quit when the going gets tough?

The answer is – our mindset.

The longer I’m on my FIRE (Financial Independence Retire Early) journey, the more I realise how many hang ups I have about money. And that how I think or feel or believe about money ie my money mindset, greatly influences the outcomes I’m trying to achieve.

When I first learned about money mindset, I thought it was all a bit woo woo. I’m practical, if nothing else! I wrote about how I transformed my limiting money beliefs after reading Jen Sincero’s book – You Are A Bad Ass At Making Money.

If you are a late starter like me, we’ve had a lifetime of absorbing these beliefs and attitudes. Most of the time, we’ve done so unconsciously, picking them up from our childhood and life circumstances.

I’ve discovered these are the 3 most common money mindset traps for late starters who are pursuing FIRE. Let me know in the comments if any of these resonate with you.

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I've NEVER been good with money

There’s probably a lot of proof that we haven’t been ‘good’ with our money. But I’m sure there is also proof that we’ve made some sensible financial decisions in our past. It’s just that our brains prefer to latch on to the negative side of things.

I know for me, the thought that I’ve never been good with money has a lot to do with not investing once I bought my house.

If only I hadn’t stopped investing, I’d be FIRE’ed by now. This is a refrain that can go on repeat in my head, especially when it’s a stressful day at work. And I just want to be FIRE’ed RIGHT NOW.

But it also frequently turns into – see, you should’ve been better with money. You’ve NEVER been good with money.

To turn that around, I now think – But I AM taking action now. I am investing in and out of superannuation (retirement account) and saving via sinking funds. I know my priorities now. I have a plan of action to reflect that and I’m following it. I am getting better with money.

In other words, I give my brain something else to think about. I present it with evidence that I am making better decisions around money.

If the thought ‘I’m good with money’ is too far reaching for you, then use a ‘bridging’ thought – ‘I’m getting better with money’.

It's too late for me now

What’s the point? I’m already in my 40s, 50s … it’s too late for me now. Whatever I do now will not be enough, so why bother? I’m destined to never retire.

Sound familiar?

I thought the same thing when I discovered FIRE at 47.

But then decided to have a go anyway, as we Aussies like to say.

After all, if I did nothing, I’d be in the exact same situation as I am now. There is just the chance, however slight, that my situation may improve if I did something, anything.

And it is AMAZING what taking action will do.

Despite starting later than most in the FIRE community (where the ‘traditional’ FIREee retires in their 30s),, I am on track to retire at 55.

Sure, I had some savings in retirement accounts including one that I hadn’t contributed to for decades. But had I not started to take action when I did, my retirement savings would still be slumbering.

I consolidated the two superannuation accounts and decided what to invest in. And now, I’ve reached Coast FI.This means that even if I never contributed another cent to my superannuation, it should continue to grow to my desired number by the time I can access it at age 60.

So it’s never too late to start taking action. Any improvement in your finances is better than no improvement at all.

I'm not gung ho enough for FIRE

Then once I embraced FIRE, I felt like a fraud in the FIRE community.

I wasn’t eating rice and beans. My food costs for one person is more than that of a fellow blogger with a partner and 2 children.

The young ones are side hustling with a passion and negotiating pay rises. I don’t want the extra responsibility to justify a pay rise. I’m trying not to get back on the path to burning out – been there, done that. Never again, shudder!

A few years into my FIRE journey, I can say with confidence that it’s best if you don’t compare your circumstances, savings rate, priorities etc with anyone else’s.

The better question to ask is – am I progressing in the right direction? If the answer is ‘yes’, leave it be. You’re doing a good job.

Can you do it faster? More aggressively?

Of course you can. But what is the trade off?

Consider your mental health. For example, juggling jobs or side hustles may result in a lack of time to spend with family and friends. Consider your health. Is the extra stress causing other medical issues such as high blood pressure?

Your FIRE journey is yours, unique to your circumstances. Know what you will give up to reach FIRE faster and know what you won’t. Sometimes, it’s only for a while until we sort out our finances and that’s ok.

My philosophy is that there is no point in reaching my destination of FIRE, only for ill health (physical or mental) to sabotage my enjoyment of it.


The shame

What we don’t talk about much in the FIRE community is how much shame we carry around these negative money mindsets.

First, there’s the shame that we haven’t been good with money all our lives. We are ashamed of the debt we racked up. We are ashamed of our paltry retirement savings.

Then there’s the shame that we’ve left it so late and now must play catch up. We have to learn from the young ones crushing it.

Lastly, there’s the shame that somehow we are not doing enough, not gung ho enough to be in the ‘proper’ FIRE community.

We may not have it within us to go back to living like we did at college – eating two minute noodles and vitamin pills (which is exactly what my friend did at university). Not now when we are finally earning decent incomes and are used to a more comfortable lifestyle.

Late starters, we must forgive our past selves. And grant our current selves more grace.

We can’t change our past mistakes and dodgy financial decisions. BUT our future is very much in front of us.

The second half of our lives is still ahead of us. We may live till our 90s!

We owe it to ourselves and our families to get our $h*t together now and start taking action.

Earlier retirement is possible. That dream holiday is possible. Whatever your dream is, it is still possible.

We know better now. We can do better now. If we start taking action.

It’s time we let go of our shame and our past and embrace our future.

Money affirmations

I know all this sounds a bit woo woo but it works. Once your brain is presented with a different view, it will start showing you evidence of things working. And opportunities will open up.

These are some of my favourite money affirmations.

Choose one appropriate to your situation and repeat it to yourself daily. Write it in your journal. Put it on a sticky note on your bathroom mirror so it’s the first thing you see in the morning and last thing you see before bed. You get the drift.

– I am taking charge of my financial destiny

– Every action I take will lead to financial freedom

– I am getting better at managing my money

– I enjoy telling my money what to do

– My financial future is not set in stone. I have the power to change it.

– I am grateful for all the money I have

– My financial future is so much brighter than my past

– I am capable of making good financial decisions

– Money comes to me easily and abundantly (this is mine right now!)

– I deserve financial abundance

Now, please don’t think that just by saying or thinking these affirmations, it is enough for you to reach FIRE. Of course not!

But together with deciding what your priorities are and taking action such as reining in your spending, increasing your income and investing the difference, it will do wonders for your financial situation. And they will keep you focused on the job at hand.

Final thoughts

The 3 money mindset traps for late starters to FIRE can be overcome by thinking new thoughts and taking action.

Positive money affirmations can help us by reinforcing the actions we are taking towards financial independence. They interrupt our pattern of negative thoughts and feelings of shame.

Most importantly, it’s time to forgive our past selves for the financial mistakes we made. And move forward with confidence that our financial future is much, much brighter than our past.

So, late starters, don’t let these money mindset traps stop you from getting started on your FIRE journey. Or derail you from your plans.

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The Joy of Spending My Money Guilt Free

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Yes, this is still a FIRE blog.

I am unashamedly pursuing Financial Independence as a late starter and plan to Retire Early(ish) at 55.

But I’ve also recently enjoyed a not-so-cheap 4 and a half week holiday in the United Kingdom. And … I absolutely loved spending my money during this holiday without any guilt!

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Before finding FIRE

I was the typical happy go lucky person, very laid back about money in my 20s, 30s and early 40s.

My philosophy then was – I earn it, I spend it and I save some of it … to spend later.

As long as I had a job (no worries about that – I was in a stressful, demanding job) and I could pay my expenses including my mortgage and travel, I was good.

Fortunately my parents drummed into me the importance of spending within my means. I will forever be grateful to them for this advice. And grateful to past me for sticking to this advice.

Finding FIRE

It comes as no surprise therefore when one day in my late 40s, I woke up stressed about the thought of retiring. I had a lot of things going on in my head – mainly that work is too stressful and that I can’t handle it anymore. I had a suspicion that I hadn’t saved enough for retirement. I was right.

So I googled how much I needed to retire and stumbled onto the FIRE community. And was inspired by much younger people who implemented these strategies to retire at 30!

Well, that boat has well and truly sailed sometime ago so the next best thing is to retire earlier than the traditional age. Mind you, there is no ‘traditional’ retirement age anymore. In Australia, it is illegal to ask anyone to retire – you can literally work until you die.

Most people aim to retire around 67 when they may be eligible for the government age pension.

Anyway, I thought that if it took the young ones 10 years to retire early, then why can’t I do the same and retire in 10 years? That would mean I’d retire at 57 instead of 67. That’s a 10 year bonus. So I jumped right in!

After finding FIRE

The side effect of me pursuing FIRE is that I feel guilty about spending money. On anything.

Because I thought that every dollar should be squirreled away for investing. Every dollar is earmarked for my retirement, right? The quicker I can accumulate my stash, the quicker I can quit my job and live happily ever after.

And if I spend on gifts, travel, fine dining, I am denying myself early retirement.

After all, I was already starting very late and therefore behind. Time was not on my side – all that compound interest gone, poof!

Thoughtful young woman holding credit card and piggy bank

The struggle between spending and saving is real

I must admit this 180 degree change in how I view spending was very surprising to me. Because all my life, I most identify with being a spender. I honestly cannot relate to being frugal although I’ve tried.

So this push / pull with spending money is annoying and unsettling.

I agonised over buying a Roomba with free gift cards – I didn’t pay a cent for it and yet I felt guilty. How silly is that? (I wrote about that experience here)

Pre FIRE me would have happily forked over more to buy the techiest version.

I felt really guilty on a trip to Uluru, shortly after I started pursuing FIRE. I travelled with a friend and enjoyed unforgettable experiences such as dining under the stars with Uluru in the background. But I felt I’d spent so much money that I didn’t want to track my expenses.

Pre FIRE me would not have felt guilty at all. Pre FIRE me would have justified that I could easily earn back what I spent. No worries at all.


Let’s face it – being on the FIRE path can be very intense especially if you have a deadline and a constrained time frame. Late starters, anyone?

Every effort is made to save as much you can, not by societal standards or the general personal finance advice of 10%. No, you must save at least 50% of your income.

Compromises and sacrifices abound – spend $2 per meal only, cycle everywhere, no takeaway meals etc. And when you’ve reduced as many of your expenses as you can, it’s time for side hustles to increase your income.

I’m writing this tongue in cheek – because it is absolutely critical that we look at our spending and identify areas where we can save. And invest those savings. After all, it’s not fun to retire with no savings at all and rely on the mercy and generosity of the prevailing government.

However, I feel it is just as important to look at our expenses and identify which bring us joy or which we value and either not cut those out completely or think of ways to do them less expensively.

Yes, the trade off may be that it’ll take longer to arrive at FIRE, if we can’t free up much money to save and invest.

But the longer I’m on my FIRE journey, the more convinced I am that we need joy in our life NOW. We can’t just wait and defer joy to when we finally achieve FIRE. Ten to fifteen years is a long time to deprive oneself of the things that make us happy.

Of course, what makes us happy may not cost a lot of money. The whole point of FIRE is to discover what it is that fulfills us and make us happy and find the time and money to do those forever.

I don’t want to arrive at FIRE a shell of who I am and desperately in need of healing and a long rest because I’ve hustled so hard to get there.

I want to arrive at FIRE, raring to go, with lots of plans underway. I’m up for a short rest of course, doing absolutely nothing.

I also don’t want to arrive at FIRE, scared to spend my hard earned money, worried that my money will run out. It will be difficult as it is to switch from an accumulation mentality to spending the dividends or drawing down my shares portfolio.

Guilt Free Spending

In my humble opinion, the way to still have joy in our lives now while pursuing FIRE is to have money set aside for guilt free spending.

This is for spending on things that you won’t give up or find really hard to give up, that bring you joy and that you’d be miserable without it. Some describe it as Fun money.

But there were so many competing priorities when I started my FIRE journey. Do I build my non existent emergency fund? Should I invest? What should I invest in? Salary sacrifice into superannuation (retirement account)?

I had read The Barefoot Investor by Scott Pape and was therefore aware of having a splurge account ie money set aside for guilt free spending.

But I never set this up this account because my priority was investing in my superannuation and then investing in my shares portfolio outside of superannuation.

There was only so much in the kitty.

All my spending was therefore lumped under living expenses. Except Travel.

Lighthouse on cliff at Neist Point in Isle of Skye
Neist Point lighthouse in Isle of Skye, Scotland

My Travel Fund

Travel was in its own category.

And I’ve realised that this is my one true guilt free spending money account.

I don’t care about massages, spa treatments, Friday night drinks, trendy clothes etc. What really depresses me is if I didn’t have any money for travel.

After reading Ramit Sethi’s I Will Teach You to be Rich, I renamed one of my sinking funds to Invest in Self. But when money is tight, I stop contributing to it.

By contrast, it is very rare when I don’t contribute to my Travel fund. It only happened recently when I needed to build up my Bills account to be one month ahead. I felt the sacrifice keenly but knew I’d feel more secure if my Bills account was one month ahead. So it was worth the sacrifice.

At one stage, the Travel fund was larger than my Emergency Fund, at which point, I switched them around and swapped names. In fact, that was how my Emergency Fund was fully funded the first time.

I contributed all through the years the pandemic closed borders when I had nowhere to go. I did use some funds to buy online courses and programs in 2020 and 2021. But even so, the fund had a healthy balance by the time I booked my flights in February.

Heck, even when I was on holidays, I was contributing to the fund.

This is easy to do because my contributions are automatic. I set up automatic transfers from my weekly pay so I don’t have to think about it. Every week, a predetermined amount is automatically deposited into my travel fund. It is in a savings account that earns bonus interest if a minimum of $300 per month is deposited with no withdrawals. So I always make sure to deposit the minimum to get the bonus interest.

How I Spent Guilt Free on my Holiday

I accessed this account before I travelled, to pay for flight taxes and airport charges, attractions, train tickets, car hire deposit, travel insurance etc. I used Qantas frequent flyer points for return premium economy seats on the flights.

At the start of my holidays, I transferred an amount that I thought I’d need for the duration of the holiday into my global everyday account that can accommodate 5 different currencies. As I was travelling to the UK, I would need pounds (£) to pay for everything.

And that was my ‘budget’, an amount that I was happy to spend. There was money left in the Travel fund because I didn’t want to spend all of it. There is always more travel ahead!

I did not break it down to what I’m ‘allowed’ to spend on entertainment, food, transport etc. It was just a lump sum that I could spend however I liked.

At the end of the holiday, I transferred what hadn’t been converted to British £ back into my Travel fund.

souffle, rhubarb sorbet
Part of an 8 course meal at Three Chimneys

Feeling Free to Spend Again

In the past, even though my head knew that it was ok to spend this sum that I’d saved diligently for the last 3 years, I’d still feel a degree of guilt.

I’m not sure if it’s because I haven’t travelled for 3 years but this time I felt totally guilt free about spending my allocated ‘budget’.

I think it’s knowing that I still have money in my Travel fund for another trip. And I hadn’t sacrificed investing for my future.

To be honest, it felt really, really good. And so freeing, not having to think about each expense.

Final Thoughts

Don’t get me wrong – I have no desire to go back to my pre FIRE days when I spent money without a care or much thought.

And I’m not advocating that you spend money you don’t have (in the form of accruing credit card debt, for example) or spend money on fun things at the expense (pun not intended) of saving for retirement.

But I do want to strike the right balance between spending intentionally on the things I love now and saving as much as I possibly can to reach FIRE faster.

I want to do both – to have some money for the things that bring me joy (travel) now AND invest for my imminent retirement, early or otherwise.

This pendulum will swing differently in various ‘seasons’ of my life but the key is to find the right balance.

How do you find the balance between spending and saving? Do you feel guilty about spending?

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