03 Nov How I Live Off of Half My Income and Stay Sane
If you told me five years ago, I’d have a six figure net worth, and I’d be able to comfortably live on half my income, I’d say you were nuts. I took me five years to cut expenses and increase my salary so I could live on half of my income. Here’s how I did it.
Saving Wasn’t Exactly Easy at First
I want to tell you I was an amazing saver right out of the gate, but nothing could be further from the truth. I would stay up late and read personal finance blogs from my personal finance and FIRE superheroes. I read about real men and women who found ways to save 30%, 50%, even 70% of their incomes while traveling the world. I would read their stories at the gym and I wondered if it was true or even possible for me. I got inspired by frugal finance bloggers like the Fruglewoods and found ways to cut over $1,500 a month with help from a large glass of wine and an Excel spreadsheet. I found that most of my money was going to groceries ($600 a month for one person) and immediately stopped buying food by the pound at the hot bar.
Bump it Up! Adding to My Income
Cutting expenses and being frugal is one of the first and fastest ways you can start your journey to saving half your income. Within a few months, I had trimmed $1,500 from my budget and that went directly to my retirement account. The next thing I did was sit down with my boss and ask how I was doing and asked for constructive feedback. I prioritized what she needed and went to work. I was also enrolled in a master’s degree program at this time and asked if she would be open to a promotion once I finished and she agreed. I then went to work on her highest priorities, under-promised, and over-delivered. I was early to meetings and to work. I gave her a layout of everything I would do for the week and then completed every item. I collaborated across our organization and created trainings, increased leads, and took the lead on large scale projects.
I used my savings to invest in retirement fund and in myself.
While I was in graduate school, I also took online certifications, enrolled in courses, and completed trainings so I would stand out. I doubled my income in less than five years and have been placed in leadership training.
I also freelanced by creating web sites, worked as a mystery shopper, and completed online surveys and banking bonuses. All of these side hustles allowed me to save as much money as possible.
Keep Spending Down
While I worked to cut expenses and increase my income, I also looked for ways to keep my spending down across the board. I bartered with my hair salon in exchange for web updates and save $80 a month. I use our health plan to sign up for the rewards program and gained $450 to use towards Christmas presents. When I get my tax return, I use that money to buy stylish work clothes using my so I can dress professionally. I keep our electric down by switching out our lights to LED lights and only running the air conditioning at 78 degrees rather than 74 degrees. When I got promotions and bonuses I saves them. I’m still driving a 2000 luxury car because it’s completely paid off and I don’t want a monthly car payment ora high insurance bill.
It took me about six years to get to a 50% savings rate, but it’s possible even if you don’t make a large salary.