“You only live once” (YOLO) and “financial independence, retire early” (FIRE) are two popular acronyms that seem to sit at opposite ends of the lifestyle spectrum.
On one hand, proponents of the YOLO mindset believe in enjoying life to the fullest without being overly concerned about the future. This could mean travelling frequently while we still have the health, time, and finances to do so. Or it might involve indulging in luxuries like designer bags, premium watches or cars as long as we can afford them.
On the other hand, followers of the FIRE movement often reject such discretionary spending. Their approach focuses on minimising expenses, cutting out non-essential purchases, and directing savings into investments that can generate higher returns and passive income. The goal is to achieve early retirement by spending less and investing more, rather than having to work longer just to maintain a more expensive lifestyle.
Do we really have to pick one over the other?
Perhaps not.
How To End Up With the Worst of Both Worlds?
Can you end up with the worst of both worlds? The answer is that it’s surprisingly simple – all you need to do is constantly spend money on things you don’t truly need, want or even enjoy.
Take this scenario: you are a fresh graduate earning a take-home salary of $3,000 a month. It’s the most money you’ve ever managed, and suddenly, your spending options expand. While $3,000 won’t buy you everything, it certainly gives you more choices than you ever had as a student.
And this is where mindless spending can lead you to the worst of both worlds.
You start eating pricier meals or drinking gourmet coffee, not because you particularly enjoy them, but simply because you can now afford it, and the people around you are also buying it. You upgrade your phone, even though your current one works fine and you never felt the need to replace it. You begin clubbing or bar-hopping every weekend, sometimes footing the bill just so you can impress your friends.
Over time, this new lifestyle becomes your norm. But the downside is that saving, let alone investing, becomes difficult. Even when your salary increases, the extra money is quickly absorbed by new spending habits: a premium gym membership you rarely use, the latest tech gadget that you saw on Instagram, or yet another holiday with friends to “maximise” the long weekend.
To be clear, there is nothing inherently wrong with any of these purchases as long as they are things you genuinely enjoy and value. For instance, if you are looking forward to playing the upcoming GTA 6 and need a PlayStation 5 for it, buying one can be a worthwhile expense if it fits your budget. Likewise, a premium gym membership may be well worth the cost if it’s conveniently located near your office or home, and encourages you and your spouse to work out regularly as a way to stay fit and to spend quality time together. Long weekends, when planned for, can be a time to decompress without using too many leaves.
However, if you are not spending on things that meaningfully improve your life, but are instead adding unnecessary costs to lifestyle habits you’ve picked up (for example, ordering food delivery every other day simply because you’re too lazy to head out for dinner), then you are neither spending on what truly brings you joy, nor making any progress towards financial independence.
YOLO: Spend Wisely Because You Only Live Once
Learning to spend wisely, rather than spending everything you have, is often the first step to truly living life to the fullest.
Spending wisely can take many forms. One of the most meaningful is spending on shared experiences with loved ones. These are rarely a source of regret and often bring more lasting value than spending solely on yourself.
For example, purchasing a car can be a worthwhile decision if it gives your family the freedom to explore Singapore and even take road trips across Malaysia during long weekends. That experience is likely far more meaningful than buying a car just to drive to work each day (though you can still do that!). Similarly, enjoying a meal at an expensive steakhouse becomes even more special when it’s to celebrate a significant occasion with loved ones, rather than just being a spontaneous splurge after a stressful day at work.
The idea is to extract as much value as possible from your discretionary purchases by spending wisely.
This principle also applies to big-ticket purchases, such as your home. While some might view their home as an investment, it shouldn’t be based solely on what your property agent suggests will yield the best returns. Instead, choose a property within your means, meets your space needs, and is located in an area that suits your lifestyle, whether closer to work, your child’s school, or your parents.
Being mindful about how we spend our money is essential if we truly want to enjoy the YOLO lifestyle. Spend on the things you genuinely enjoy that improve your life, not out of habit, stress or because of the pressure to keep up with others.
Working Towards FIRE While Embracing YOLO
Planning for retirement is something we should begin thinking about from our early working years. This involves setting aside a portion of our monthly income to invest and grow our portfolio over time. Ideally, we want to manage our monthly expenses within a comfortable budget, but this doesn’t mean cutting them to the bare minimum.
This distinction is important. Living on the bare minimum often means giving up aspects of life that bring us joy and fulfilment. In contrast, keeping to a comfortable budget allows us to save and invest consistently while still having the flexibility to spend on things that enhance our quality of life.
The goal isn’t to scrimp and save every last dollar, but to strike a balance, ensuring we have enough to invest for our future while still enjoying and living in the present.
It’s really like growing fruits in a garden. After your fruits are ripe, you want to set aside some seeds (your savings) and invest the time and care to grow them (investing for FIRE). But at the same time, you should also take moments to enjoy (some of) the fruits that bloom along the way (living the YOLO moments that bring joy and meaning). A well-balanced garden doesn’t just prepare for the future harvest. It also gives you something to enjoy today.
Read Also: How Realistic Is FIRE For the Average Singaporean?
