How We Save More Than 56% Of Our Income | Financial Independence
Hi friends! My husband Jayme and I are working towards financial independence and over the past few years we have gone from living paycheck to paycheck to now saving over 56% of our income. When I think about our journey and how far we have come I can’t help but tear up. There have been so many long nights, early mornings, going WAY outside our comfort zone, so many times that I wanted to quit but my husband grabbed my hand and we pushed through!
Today I’m going to help show you how Jayme and I are able to save over 56% of our income and hopefully give you some tips to increase your savings rate.
We just cash flowed my DREAM car, a 2016 Jeep Cherokee Overland and now we are onto our new big goal, saving for our first home! We have $40k saved and are saving about another $20k before we are ready to buy. Let’s dig into to how we are able to save more than half our income!
Dual Income No Kids
Dual Income No Kids or DINKs is a popular phrase that you will hear in the personal finance community. Right now, we are taking advantage of have two incomes and no kids, having children isn’t an excuse not to save money but you can work it to your advantage if you don’t have kids at this stage in your life.
When we do have kids, we will still make saving a priority of ours but I’m sure it will drop down a little bit especially as go into each new stage of life. Jayme and I have already had numerous conversations about how we plan on parenting and teaching our children about money from a young age. For example, they will know the value of money and do commissions rather than an allowance.
I started working when I was 14, I couldn’t get my own cell phone until I was able to pay 100% of that phone myself, I also paid for all my own clothes or food when I went out with my friends, no “here’s $20, have fun”. The only time my parents bought me clothes was Christmas and birthday, other than that I was on my own. I used to be so jealous of my friends that would get money all the time from their parents but am so glad that I learned the value of money from a young age.
We are on a written budget.
Every single penny that we bring in or spend gets tracked in our excel budget. Sometimes I drive my husband nuts with asking all the little purchases he makes but tracking all our spending really puts our spending in the forefront of our mind and puts us in control of our money rather than guilt. Budgets have such a bad reputation for being restricting but let me give you another way of looking at it.
My husband LOVES Starbucks and was very worried that when we got married that I wasn’t going to allow him to go to Starbucks anymore because it is a waste of money. Rather than getting into a fight every time he goes we just budget in the money so that he knows he has the freedom to get his Venti Caramel Iced Coffee with Cream anytime he wants.
The same with clothes, I used to feel guilty about going shopping for a new blouse but now we just put a specific amount into our budget for when I want to buy a new top and I don’t have to feel guilty when I do because they money was already planned. This is putting US in control of our money rather than our money having a hold on us and our relationship.
If you would like to download a copy of the Excel Budget we use I have it available on my Etsy Shop!
Compound interest has gone from being our worst enemy to our best friend.
When you are in debt compound interest is your worst enemy, my student loans grew about $10,000 because of interest, but now that we are debt free compound interest is our best friend. Not having to pay interest on credit cards, car loans or student loans is a game changer in hitting your financial goals. We are not able to save up and pay CASH for those items that most people go into debt for. We love keeping our sinking funds in a high yield savings account like CIT Bank so we can be making money on that savings and make the interest accrued work to our advantage!
Buy USED cars with cash.
When I was 19 my car was breaking down constantly, the mechanic told me I was putting more money into it than it was worth. After so many car problems I wanted a new car, I didn’t want to inherit anyone else’s hidden car problems and I thought the only way to avoid that was buying a BRAND NEW car. I ended up WAY overpaying for that car. I wish someone had explained to me how cars depreciate, how most repairs don’t happen in the first few years and how I was throwing money out the window as soon as I drove off the lot.
I just bought my DREAM car this past fall, we saved up and paid CASH for a 2016 Jeep Cherokee Overland (I vlogged the whole thing, click here to watch) everyone that gets in my car thinks that it is brand new and not over 3 years old! Paying cash for used cars saves a ton of money because you are not paying interest, and letting someone else pay the depreciation. We keep the cash that we are saving for the cars in a high yield savings account through CIT Bank so we can make money on it in the process.
Shopping at Aldi for groceries.
I live in south Florida and Publix is the most popular grocery store and it is a MUCH nicer grocery store than ALDI but I’ve personally found that it is about 40% more expensive than Aldi. I recently did a video comparing Aldi to other grocery stores showing the savings value by shopping at a discount or warehouse grocery store. My husband and I only spend $200 a month on groceries and that is 100% because of meal planning, intermittent fasting and shopping at Aldi. A lot of times stores like Aldi are hidden in your city, I lived here for 8 years before ever stepping foot in the store or knowing what it is. Do a quick Google search of your area for discount grocery stores like Aldi, Save a Lot, Amish grocery stores or even Costco.
All raises go towards our savings.
Each time you receive a raise or bonus, put it directly into your savings, whether that is your IRAs, increasing your 401k contribution or personal savings account. Jayme just got a $10,000 raise at work, it would’ve been so fun to go out and upgrade his car, up our eating out budget or increase our lifestyle in another way but instead our budget didn’t change at all. The extra money each month goes directly into our down payment sinking fund.
Shop around for insurance companies.
I am currently in the process of shopping around for new car insurance, our current policy went up across the board because of the hurricanes these past couple of years in Florida. In the past it took about 20 minutes of phone calls shopping around. This time I used Gabi and found that another company was over $800 a year cheaper! Don’t forget to ask to see if they offer a discount if you pay in full for 6 months at a time. It can be hard to come up with the money upfront but you can just create a sinking fund and then pay it all at once in full, this previously has saved us $600 a year.
Use wash cloths and dish towels.
Cutting back on paper products can make a big impact on your budget. We have almost completely stopped using paper towels, one roll lasts us about 6 months. We only use it for blotting grease when cooking ground turkey or ground beef. Instead we use dish towels to wipe our hands and clean up messes around the house. We have a stack in our kitchen cabinet so it is super convenient to grab one when needed.
Shop around using ebates.
Jayme and I are big online shoppers and when Jayme has decided to buy something he just goes and buys it. I’m always like “No no no wait, let me look on ebates first!” I will price compare and look to see if we can buy it from a store that’s on Ebates and compare the cash back. One thing to be careful about it is to factor in any coupons or card discounts you may receive ontop of the cash back from ebates, for instance Bed Bath & Beyond always has 20% off coupons and at Target you receive 5% off using your Red Card. By using Ebates we have received over $1200 cash back on stores that we are already shopping at!
Ways I save money:
Here at Freedom In A Budget, I am all about saving money! Here are some of the EASY ways that I save money:
• Billshark negotiates lower prices on your monthly bills to save you time, money and hassle.
• Fetch Rewards is a free grocery savings app that rewards you just for snapping pictures of your receipts. That’s it. Really. Free gift cards on groceries on thousands of products every day, no matter where you get your groceries.
Just scan your receipts and get gift cards from retailers like Amazon, Target, Ulta, Applebees. Use code QHKBH to earn 2,000 points ($2)!
• Credit Sesame offers Credit Score and Monitoring, Savings Recommendations and Identity Theft Protection. ALL FOR FREE.
• CIT Bank offers high yield savings accounts and CDs to provide a safe, secure way to grow your savings.
• Gabi is a full-service, online advisor who compares all your insurance options to find you the right policy, all in under two minutes.
• M1 Finance is an easy to use brokerage platform that allows you to invest in Fractional Shares and auto reinvest!
• Webull Get 2 Free Stocks on WeBull when you deposit $100 (Valued up to $1400).
What are some of your ways to increase your savings rate?
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