A couple months ago I blogged that my husband and I are saving nearly 25% of our income every month, and have been doing so for several months. We were able to reach that rather astounding figure because we significantly paid down our debt and spend carefully.Then something even more astounding happened. Yesterday I asked my husband how much we’d be putting aside this month. He tossed out a figure that equates of 53% of our take-home pay for the month. 53%!
How We Saved 53% This Month
Honestly, I’m still figuring it out. We aren’t living like misers. We went out to dinner just last weekend, we order out a few times a month, we saw Star Trek (with coupons). I also did some stocking up at Target and CVS. So what happened?
I can point to one deferred expense: our auto insurance renewal. Worried that the payment would be late, we put it on one of our credit cards rather than risk the combination of the postal service and the insurance company’s ridiculously slow processing time. (It’s the one bill we don’t pay through online bill pay because after all this time, they STILL haven’t figured out how to process the payments efficiently.)
Still, even if we had written a check for the insurance, we’d be setting aside 40% of our income this month.
How did we do it?
We didn’t get raises this month. We didn’t receive windfalls. Our credit card bills were typical, maybe $100-200 less than usual, but certainly not 25% of our income lower. We haven’t paid off any student loans in full. We could, but we’re trying to add as much as possible to our down payment/moving fund.
Is It a Result of Changing Attitudes?
As I write this, I still don’t know how we did it. It could just be luck. It could be falling interest rates automatically reducing his student loan payments. It could be both us unconsciously spending less. It could be a reduction in grocery costs. (That seems unlikely. It’s summer fruit season, which means I’m going overboard at the farmer’s market.) Gas prices are rising, not falling, so it can’t be that.
It may simply be that we’re both getting such a good feeling from saving so much money that we’re unconsciously looking for ways to save more and are therefore reducing our expenses without trying.
Next month we’ll probably only save 25-30% of our income because we’ll have to pay the credit card with the auto insurance bill on it. I don’t expect we’ll be able to continue the 50% success every month. Once we buy a house, we’ll be back to 15-20%. Our target for post-home purchase, post-car purchase is 10-15% of savings, outside of the money we set aside for irregular expenses. Then as our income increases, so will our savings goals until we’re back to 50% again.
How You Can Do It
You don’t have to live hand-to-mouth. It just takes dedication to saving. A commitment to prioritizing your savings every month. If you can, budget to save a set amount each month before you start thinking of ways to spend. Our savings is in our budget so we aren’t tempted to spend it on other things. Even if you only save for irregular expenses, you’ll eke out a little interest and discover you can live on less. Once you learn to live on less, push it a little more. Soon you’ll be saving every month without feeling deprived. Trust me – we don’t feel deprived at all.
If you think you can’t do it, remember that just nine months ago, we were putting all of our excess income towards debt payments and saving nothing. Then we paid off a significant chunk and the flip was switched to savings. If you can work your way out of debt, suddenly you’ll be able to save a big chunk of money without trying, too.
