How I Saved 82% of My Annual Income

Trying to figure out how much money of your income you should save? Here is my story of how I save 82% of my annual income! You can do it too!

Trying to figure out how much money of your income you should save? Here is my story of how I save 82% of my annual income, You can do it too!

I have been super inspired by all of the personal finance bloggers who are saving 50%+ of their incomes, including my podcast co-host Matt who increased his savings rate to over 60% last year. I used to save between 20-40% of my income each month, but in 2016 my spending got out of whack.

As part of my return to frugality, I have been on an epic mission to spend as little money as possible in 2017. To do this I took on a self-imposed 30-day frugality challenge to see how little I could realistically live on. The results for me personally were crazy. I only spent $1,342 in January, which was approximately $7,400 less than I spent in January 2016.

For a different perspective check out my podcast episode on finding your ideal balance between spending and saving:

I was effectively able to save 82% of my income in January and put almost all of it into investments so it can grow and compound over time. So far I am off to a good start in 2017. Here is how I did it and what I learned to increase my savings rate to 82% in January.

1. Only carried 2 credit cards (1 personal and 1 business) and dropped the spending limits

I used to carry around 6 credit cards at one time. I have my personal cards and then my company cards, always trying to make sure that I put the right expense on the right card.

This ended up costing me a lot of money last year, so Ive started only carrying one personal credit card and one business credit card.

Over the years my credit limits have increased significantly, so now I have some insane credit availability of $250,000+ available to me at any time. This is great for my credit score because my credit utilization is always so low, but is terrible because its not possible to hit my limit.

For 2017 I have re-distributed my credit to a few cards and significantly lowered the spending limits on the 2 credit cards I carry with me every day. Each card has a limit of $2,000 so I cant easily spend over that amount.

2. I only ate out once a week

Last year it turned out I ordered carry-out on average about 3 times per week. It was pretty normal for me to order a $75 takeout meal on a Wednesday without thinking twice.

This killed my bank account. But in January, I made a pact with my wife to only eat out once per week and limit that meal to $50 or less.

As a bonus, we were able to use our OpenTable $50 coupon that we got from accumulating reservation points. So we spent less than $150 total on take-out food in the month of January. Check out some other awesome ways to save money eating out.

I have also started cooking a lot more at home and Ive been eating simply a lot of wild salmon, grass-fed meat, and veggies. A nice side effect of not eating out losing 4 pounds in January as a result. Win-win-win.

3. I didnt buy anything unless it was used on eBay

Re-discovering eBay was a huge revelation for me. You can literally find anything you want, used at likely a much lower cost than you would pay to buy it new.

I needed a pair of new dress shoes this past month (it was my only clothing purchase) and I found a pair of handmade Allen Edmonds for $12 that usually cost over $350 new. They are made in the USA and its pretty easy to find barely worn pairs online. They also last forever.

I have now made it a habit of looking for anything that I need on eBay first. I have also set up a bunch of alerts for some of my favorite items so I can snag the deals when they are added.

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4. Started doing Yoga at home

Doing Yoga regularly can get expensive at $12/class and even when I buy passes it still costs me at least $150 per month. But one of my friends turned me onto an awesome online Yoga platform that Im completely obsessed with DoYouYoga.

Doing Yoga every morning has changed my life not only am I a lot more chill, but Im also a lot more productive. If you arent into Yoga sign up for DoYouYogas free videos.

They actually offer quite a bit of free content, but the premium $15/month is the best value I have found and more than worth it. You can also check out free Yoga videos on YouTube, but I like the quality at DoYouYoga a lot more and they are frequently updating the videos (which also include meditation practices).

I feel like all of my homies are a lot chiller since they all started meditating or at least I can tell the ones who Im pretty sure have kept with it.

5. Canceled my gym membership and have been working out at my office for free

There is a gym pretty much across the street from my condo that I have belonged to for a few years. Yes, I go, but at $60/month I decided I could give it up and just start working out in my office. Its also an added bonus that I live close enough to my office that I can head over there and work out on weekends.

Knowing that I cant just go across the street has actually made me more disciplined when it comes to working out. So I am now more apt to get a workout in before heading home from the office.

Thanks to Source: https://millennialmoney.com/saved-82-income