I love money. I looove watching money grow. It gives me goosebumps.
I’m a natural-born saver, and watching money down to the penny throughout my life added immeasurable value to my professional skill set. And spending nearly two decades of my career in project management and account management estimating and managing large budgets transferred advantageously back to my personal life. Growing up, my ability to delay gratification was nearly as euphoric as the reward itself! That mindset has carried over into the life I live–firmly walking the line that lies between my means and beyond them! But otherwise my financial goals, I presume, were much like yours… I was in pursuit of happiness and financial independence (from my student loans!)
A few years ago while working on my vision board a magazine cut-out of the word “Happy” found its way to the center of the board. I continued to modge-podge my 2019, finding that in the end the visuals that represented my intentions and goals for the year all had money at the stem (surprise, surprise)–iterating things like, “Yes, you can travel on a dime!” and “Buy less, make more!” among others. The goals that encircled my “Happy” boiled down to purchasing a home I could retire in without being “house poor”, living comfortably through retirement, college savings, and a legacy of wealth for my children. That board became a roadmap to happiness. So, I started the financial journey to “Happy”. It was going to be calculated (no pun intended) and deliberate. Goosebumps.
Here’s how I saved $65K effortlessly:
I identified what it costed me to live. I opened my mobile banking apps and looked at every purchase and payment I’d made with my debit and credit cards that month. And I do mean every transaction–for utilities, credit card payments, student loan payments, dinners out, shopping, gifts to loved ones, etc.–and I tallied that amount against what I earned each month.
I gave myself a “pay cut”. Now that I knew what it cost me to live, I played a mind game with myself. I told myself, if that’s all I really need to live, why don’t I pretend that’s all I need to earn! I set up direct deposits into other accounts for the remaining net pay–the difference between my pay and my expenses–so that it never touched my hands and I never saw it! I knew it wad there if I truly needed it (or wanted it!) But I committed to seeing how much I could save if I ignored it and just let it stack. I did that consistently. Two years later those untouched earnings alone totaled $14,200!
I negotiated a pay raise. Alongside that “pay cut” I also increased my earnings. Listen, I practice what I preach. As I change consultant and coach I talk about confidence quite a bit. One of the things I tell people is to build confidence by quieting the voice in their head and instead listen to the people around them who have good things to say. During this period of aggressive saving I was also experiencing a stroke of good luck on a contract. I was performing well and was given a greater, more visible responsibility which turned out to be worth a higher hourly rate. That year I took home an additional $21K in consulting fees to stack alongside that $14,200. If you’re performing well at work, trust your skills and talents enough to negotiate a pay raise.
I got creative. Impressed with what I’d saved, I was inspired to rent out my basement to generate about $1300 month. I had my tenant transfer that $1300 directly into my savings for a total of $15,600 each year and $31,200 in two years!
These tactics didn’t put a strain on me at all. The money was all out of sight and out of mind. I even allowed myself to play with a little of the excess. I recommend this when the money is truly excess–I find it takes the sting out of aggressive saving when you can still reward yourself without compromising what you’ve saved. After I rewarded myself, I had saved $65K.
Spend less. Earn more. Combined, these four words can amass a fortune. I saved $65K for no reason other than to see what I could accomplish without effort but it became a lump investment into my financial independence, and the process was the linchpin to my investment strategy. Today I look back at that vision board… Retirement target: Met. The new home I could retire in comfortably: Check. Custodial accounts for my kids: Check. And it didn’t hurt one bit–in fact, it felt pretty damn good.