How I Saved 82% of My Income

How I Saved 82 Percent Income

How I Saved 82% of My Income

Grant Sabatier

Founder of Millennial Money. Dubbed "The Millennial Millionaire" by CNBC, Grant went from $2.26 to $1 million in 5 years, reaching financial independence at age 30. He's passionate about helping others build wealth and is addicted to Personal Capital.

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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 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

how i saved 82 percent of income

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 I’ve 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 it’s 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 can’t 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 I 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 I’ve 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. 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 I’m completely obsessed with – DoYouYoga. Doing Yoga every morning has changed my life – not only am I a lot more chill, I’m also a lot more productive. If you aren’t into Yoga sign up for DoYouYoga’s 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 I’m pretty sure who have kept with it. ?

 

4. 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. It’s also an added bonus that I live close enough to my office that I can head over there and workout on weekends. Knowing that I can’t 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.

 

5. I didn’t 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 it’s 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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Grant Sabatier
grant@millennialmoney.com

Founder of Millennial Money. Dubbed "The Millennial Millionaire" by CNBC, Grant went from $2.26 to $1 million in 5 years, reaching financial independence at age 30. He's passionate about helping others build wealth and is addicted to Personal Capital.

15 Comments
  • Physician on FIRE
    Posted at 16:42h, 03 February Reply

    Killing it! From $210,000 a year to $21,000? That would be insanity.

    My gross savings rate is just over 50%, but over 30% of gross goes to taxes, so my net savings rate approaches 80%. Spending is about as low as I’m willing to go.

    Cheers!
    -PoF

    • Grant @MillennialMoney
      Posted at 17:05h, 03 February Reply

      Thanks PoF! Yeah, clearly I scared the hell out of myself with last year’s spending. It’s definitely hard to live on less, especially a lot less. But what’s been freeing so far is my “wants” have definitely declined a lot. Which is awesome. I’m not like living in a tent by the freeway or anything, but literally, every purchase I am saying out loud “how much is this worth and will it add joy to my life”. My wife thinks I’m crazy, but it’s working! $21,000 would be a huge stretch – but challenge accepted!

  • Max Your Freedom
    Posted at 21:35h, 03 February Reply

    Once you crack the high savings rate threshold it’s hard to go back, it’s like seeing a whole new world of possibilities! We broke through 75% on a net basis last year, and I’m hoping we can keep that up this year and beyond without compromising on a bit of fun along the way. Keep it up!

    • Grant @MillennialMoney
      Posted at 14:31h, 04 February Reply

      Thanks Max! It is addicting.

  • Mrs. Picky Pincher
    Posted at 08:55h, 04 February Reply

    WOW. Congrats on that 82% savings rate! That’s quite an accomplishment. 🙂 We’re at 55% savings for January 2017, which is a 5% increase, so we’re stoked!

    • Grant @MillennialMoney
      Posted at 14:33h, 04 February Reply

      That’s huge. We are definitely in the small minority when the average savings rate in the US is 3-4%.

  • Steven Goodwin
    Posted at 09:57h, 05 February Reply

    Some pretty good tips here! That’s amazing that you were able to cut your spending so much! I like to spend a few hours once a month preparing a bunch of freezer meals that we can just throw into the crockpot once a day. It makes dinner so much easier and curbs our appetite to eat out a ton!

    • Grant @MillennialMoney
      Posted at 09:54h, 06 February Reply

      Thanks Steven. It’s amazing what’s possible when you just focus on it. I just tried to spend as little as possible – it was a great test and I learned a lot.

  • Chris @ Mindful Explorer
    Posted at 22:23h, 05 February Reply

    Great work on crushing the savings rate with just some simple tweaks over the last month. You did it very easily yet the rest of the masses struggle to come within a fraction of what you have done. Also, well done on the fully supported animate GIF selection to each heading 🙂 lol I enjoyed that

    • Grant @MillennialMoney
      Posted at 09:55h, 06 February Reply

      Thanks Chris. I love GIFs. So funny.

  • Peter
    Posted at 01:42h, 07 February Reply

    Great improvement. Our average saving rate is about 60% and the only way to improve this would be earning more money 🙂 Also I think that the most important thing to know the difference between your “wants” and “needs” and focus on this before every purchase you make. I often do this when about to buy something, I ask myself if “Do I need this item”, and then 3 times “Really?”. If after the the third question the answer is still an honest yes I will buy it 🙂

    • Grant @MillennialMoney
      Posted at 13:07h, 07 February Reply

      Thanks Peter. I agree the wants and needs distinction is essential.

  • Top Financial Independence Articcless From Around the Web 2/7/17 | Excess Cash
    Posted at 17:23h, 07 February Reply

    […] Grant @MillenialMoney, How I Saved 82% of My Income […]

  • Dora
    Posted at 15:27h, 15 July Reply

    I want to retire so bad, I can taste it. That’s been my motivation for saving and investing as much as possible. I save about $2,000 a month, which is a respectable amount. Thanks to the Great Recession, I don’t make as much money as I used to. That’s OK because it makes me pay close attention to what I need.
    I stay out of stores and keep myself busy with reading and exercising (at home, like you!)

    • Grant Sabatier
      Posted at 02:42h, 19 July Reply

      Thanks for sharing Dora.

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