The Secret to Retiring at 40: How This Couple Saved a Million Dollars Through Extreme Frugality — What’s Driving the FIRE Movement?

Every winter, Alan Donegan and Katie Donegan avoid turning on the heating in their home in southern England. Alan says, "Instead, we wear multiple layers and use hot water bottles—we've turned it into a game. It's not suffering; it's a strategy." The couple admits others see their focus on not spending money as "extreme" or even "crazy," but Alan explains they were "highly focused on buying freedom." That freedom meant early retirement. The Donegans achieved this seven years ago, when Alan was just 40 and Katie was 35. They rarely order takeout and always bring lunch to work. Alan says, "Just this lunch habit saved us £40,000 (about $54,000; ¥364,000 RMB; NT$1.72 million) over ten years." "We even charge our phones when we're out and search for discarded Nectar supermarket discount coupons. You can call it crazy or genius, but it works." Before starting his business, Alan worked as a landscape gardener and later founded a training and life coaching company; Katie is an actuary—a risk assessment expert—at a financial firm. In addition to solid incomes, their extreme frugality allowed them to retire early—and they invested every spare pound they could afford. Katie says, "Every pound we invest brings us one step closer to the life we want." When their savings hit £1 million, they quit their jobs. Alan and Katie are part of FIRE, a small but growing global movement. FIRE stands for "Financially Independent, Retire Early." Fifteen years ago, it was little-known; today, the main FIRE subreddit has nearly one million members, and major financial institutions have published numerous guides. The core idea is living extremely frugally during working years to retire as early as possible. For most people, early retirement remains a dream. With high living costs, soaring housing prices, and student debt, people are working longer, not shorter. Official data supports this: last year, the average retirement age in the UK rose to 65.8 for men and 64.7 for women—both record highs. The U.S. is similar. Long-term studies show that average retirement ages for both men and women have steadily increased since the 1990s, reaching 64.8 and 63.3 by 2025. Yet supporters like 49-year-old Amy Minkley remain committed. The American high school teacher retired at 44. To achieve this, she worked at international private schools in Japan, Singapore, India, and Thailand. Minkley says she earned higher incomes and had lower living costs compared to her home state of Texas. She also minimized expenses. "I wasn't interested in maintaining an expat lifestyle," she says. "I rarely buy expensive clothes, use electronics until they break, cook most meals, and pause before any major purchase." "Sharing housing in Singapore and India helped me save more, and in some countries, I didn’t even need a car, keeping costs low." Now living in Bali, her retirement income goes much further than it would in the U.S. Carol Schleif, chief market strategist at BMO Private Wealth in Toronto, says FIRE is still "achievable" for many, but most of her clients value work-life balance more. Instead of rushing to retire early, they prefer combining meaningful careers with frugal living. "If you retire early but lack friendship, health, or a sense of purpose, you’ve achieved one goal at the expense of others… making us question if it’s truly worth it," Schleif says. "People now take a more flexible approach—trying to reach retirement goals while still enjoying life." Sarah Coles, personal finance director at UK investment platform AJ Bell, warns that practicing FIRE is becoming harder as most people can’t afford the required savings. Still, she says, FIRE’s principles are worth adopting to help retire slightly earlier—like starting to save young and increasing pension contributions after each raise. "A more balanced path can still give you the retirement you want without burning out. It just needs to be more nuanced and realistic," Coles says. Within the FIRE community, some now follow less radical paths, leading to offshoots like "Barista FIRE," where people save enough for investments to cover most living expenses and work part-time to fill the gap. For some followers, however, extreme frugality remains the main path to early retirement—and they believe the long-term payoff justifies the sacrifice. As Minkley says: "FIRE’s principles are simple and unchanged—spend less than you earn, invest the difference, and give your money time to grow."