FIRE Budget

How to set up and use the FIRE budget method in Forbidden Finance, designed for pursuing Financial Independence and Retire Early goals.

Overview

The FIRE budget is built for people pursuing Financial Independence, Retire Early. It combines traditional budget tracking with FI-specific metrics: your savings rate, your FI number (the portfolio size that lets you stop working), and your projected time to financial independence. This method is available on Pro tier and above.

FIRE budgeting is not just about tracking expenses -- it is about understanding how every spending decision affects your timeline to financial freedom. The app calculates how many years and months remain until your invested assets can sustain your lifestyle, and updates that projection in real time as your spending and savings change.

Forbidden Finance does not provide financial advice. These tools are for informational purposes only.

How to Set Up a FIRE Budget

Open the Budget Wizard

Navigate to Budget and tap Create Budget. Select FIRE from the method list.

Enter your monthly income

Enter your total monthly take-home pay.

Set your target savings rate

Enter the percentage of income you aim to save and invest. FIRE practitioners commonly target 50% or higher, but any rate above your current one is a step forward.

Configure your assumptions

Enter three key inputs:

Safe withdrawal rate (SWR): The percentage you plan to withdraw from your portfolio each year in retirement. The default is 4%.
Expected annual return: Your estimated average annual investment return before inflation. The default is 7%.
Expected inflation rate: The average annual inflation rate. The default is 3%.

Set your expense categories

Create groups for your spending. The FIRE budget tracks your total monthly expenses, which directly feeds into your FI number calculation.

Activate your budget

Review your setup and tap Activate.

Understanding the FIRE Metrics

Metric	What It Means	How It Is Calculated
FI Number	The portfolio size needed to sustain your lifestyle indefinitely	Annual expenses divided by safe withdrawal rate
Time to FI	Years and months until you reach your FI Number	Based on current invested amount, savings rate, and expected return
FI Progress	How far along you are	Current invested assets divided by FI Number, shown as a percentage
Savings Rate (Target)	The percentage you set during setup	Your goal
Savings Rate (Actual)	Your real savings rate this month	(Income minus expenses) divided by income

Example Setup

Monthly income: $8,000. Target savings rate: 50%. Safe withdrawal rate: 4%. Expected return: 7%. Inflation: 3%.

	Amount
Monthly income	$8,000
Target savings	$4,000 (50%)
Monthly expenses	$4,000
Annual expenses	$48,000
FI Number	$1,200,000 ($48,000 / 0.04)

If you currently have $300,000 invested, your FI Progress is 25% ($300,000 / $1,200,000). Based on saving $4,000/month at a 7% return with 3% inflation, your projected Time to FI is approximately 12 years.

Now suppose you reduce expenses by $500/month. Your annual expenses drop to $42,000, your FI Number drops to $1,050,000, and your savings increase to $4,500/month. Your Time to FI shortens by roughly 2 years. The FIRE budget makes this impact visible instantly.

Monthly Expense Breakdown

The budget screen shows your spending broken down by category group, just like other methods. The difference is that every spending total feeds directly into your FI calculations. A $100 increase in monthly expenses does not just affect this month -- it raises your FI Number by $30,000 (at a 4% SWR), which can add months to your timeline.

Tips

Focus on your savings rate first. The single most powerful lever in FIRE is the gap between your income and expenses. Even a 5% improvement in savings rate can shave years off your timeline.

Revisit your assumptions quarterly. Investment returns, inflation, and your planned withdrawal rate may change as your situation evolves. Small changes in these inputs significantly affect your Time to FI.

The FI calculations use simplified projections. Actual investment returns vary year to year, taxes affect withdrawals, and your expenses in retirement may differ from today. Use these numbers as a directional guide, not a guarantee.