How I Use Atomic Habits to Reach Financial Independence (FIRE) One Tiny Gain at a Time

When I first discovered the FIRE movement (Financial Independence, Retire Early), I thought the only way to get there was through extreme discipline or having a high-paying job. I had neither. What changed everything for me was reading Atomic Habits by James Clear.

This book helped me build the foundation to start moving toward financial independence with limited income, time, and resources, and I did it by making small, sustainable changes.

If you’re wondering how to reach financial independence or even just how to start building wealth with small habits, this article breaks down what’s worked for me and how you can start doing it today.

1. Adopting the Identity of Someone Who’s Financially Free

In Atomic Habits, Clear emphasizes that long-term change starts with identity. Instead of focusing on goals like “save $10,000” or “retire early,” I started asking myself:

What would someone who is already financially free do?

That shift changed my decisions.

For example, I used to eat out constantly, both for convenience and comfort. But that added up fast. Once I started to think like someone who was already financially free, I began:

Bulk buying chicken and rice (cheaper per serving)
Cooking meals at home to save money and stay healthier
Meal prepping so I wouldn’t be tempted to order UberEats every other day

This wasn’t about cutting out all enjoyment. It was about realigning my actions to match the future I wanted.

2. Tiny Wins with Big Impact: Starting Small with Investing

I’ll be honest — I used to be afraid of putting money into my 401(k) or Roth IRA. I didn’t want to see my paycheck shrink. But I realized something:

Small, consistent steps are better than no steps at all.

So I started by contributing just 1% to my 401(k). I didn’t even notice the change in my paycheck. Slowly, I increased it until I hit my employer match, which is free money, by the way. That one habit alone will be worth tens of thousands of dollars down the road.

If you’re looking to start investing on a small budget, check out my post on Where I’m Investing in 2025 with Less Than $500/Month (And What I’m Avoiding).

The key is to keep the bar low enough that you can’t fail — and then let those habits compound.

3. Your Environment Is More Powerful Than Your Willpower

One of the best money habits I’ve built is this:

Set up your environment to make the right decisions automatic.

I deleted the apps that made me spend recklessly: Temu, UberEats, DoorDash, all gone. I unsubscribed from email lists that were constantly selling me stuff. I also removed my saved credit card info from shopping sites so it took more effort to buy things.

At the same time, I made investing easier:

My Robinhood app is pinned on my phone’s home screen
I have automatic investments set up weekly into stocks and crypto
I check my investment tracker (more on that next) at least once a week

Want to see where I’m putting my money? Read Why Most Budgeting Advice is Trash (Here’s What Works) to see how I prioritize high-impact financial moves.

4. Tracking Habits With Rewards and Simple Tools

The FIRE journey is a marathon, not a sprint. That’s why tracking progress helps. But you don’t need to go crazy with charts and graphs.

I use a simple Google Sheet to track things like:

Weekly investing consistency
Budget check-ins
Spending under a certain limit
Cooking at home X times/week

And when I hit my goals for the month? I give myself a small reward, maybe a nice dinner out or buying something I’ve been holding off on.

If spreadsheets aren’t your thing, here are a few apps that work great:

Habitica – turn habits into a game
Streaks (iOS) – clean, minimalist habit tracking
Tally – perfect for tracking custom habits without overthinking

Whatever tool you choose, just keep showing up. The consistency is what matters most.

5. Never Miss Twice: How to Recover and Stay on Track

Sometimes I mess up. I overspend. I forget to invest one week. I skip budgeting. It happens.

But my rule is simple:

Never miss twice.

The first time? It’s a mistake.

The second time? It becomes a pattern.

That’s why I automate everything I can. I’ve set up automatic investing with Robinhood (here’s my referral link) so I don’t have to think about it. I also automate my weekly Fundrise investments into startups I believe in (check that out here).

This makes it so I literally can’t miss twice, because the system is doing the work for me.

Final Thoughts: FIRE Is a System of Tiny Wins

Reaching financial independence isn’t about grinding every day until you burn out. It’s about building systems and habits that move you forward even when you’re tired, busy, or unmotivated.

With the lessons I’ve learned from Atomic Habits, I’ve been able to:

Invest consistently even on a small budget
Cut spending without cutting joy
Automate my systems so I never fall too far off track

The best part? It didn’t take a massive life overhaul. It just took 1% improvements, repeated over and over.

If you’re looking to reach FIRE faster, without burning out, try applying these principles. Small wins are the secret.

Want more practical tips? Check out:

Let’s keep growing. One tiny gain at a time.

The FIRE Fastlane