The Year We Saved $10K: Cue ‘Braveheart’ Soundtrack
Today’s “The Year We Saved $10K” stories come with their own James Horner background music.
Jen: I feel quite lucky that I was able to save so much over the past 12 months. For me it was a confluence of three events, I think.
First, my salary got bumped up by $15,000; for me, that was a significant increase. It came about in a slightly interesting way. I was in charge of hiring someone junior to me, and to get him we had to make a higher offer than we normally would. My manager knew that I knew what he was making, and all of a sudden my salary got bumped up. I know I should probably have asked for a raise and I actually was planning to, but I got lucky and didn’t have to.
Second, I moved into a much cheaper but larger apartment. Again, I got lucky when a friend moved and offered me her crazy cheap apartment. I moved from a studio to a two bedroom in DC (in one of the now hip neighborhoods that was once sort of dangerous) that costs $800 a month. I had a roommate for the first few months who paid rent and things were very cheap. Then my brother moved in; he’s a student and isn’t paying rent (by my choice; since I can let him live here without paying rent I’m glad to), but he does help with food expenses more than 50%. As a bonus, I live within walking distance from my job. I don’t have a car, and my transportation costs are super low.
Third, I was able to do college cheaply with a mix of in-state tuition, living at home, and getting scholarships, so I had a tiny student loan that I already paid off. Not having any debt has made saving easier, of course, and I’m very lucky in this regard as well.
Overall I’ve managed to avoid lifestyle creep, I think primarily because I have a good sense of what makes me happy. I invest in that (primarily an expensive flying trapeze habit), and don’t spend money on things or experiences that I won’t love.
Stina: My husband and I have each saved $10,000 or more per year for the past 10 years. Currently we’re at about a 35% pre-tax savings rate on a combined income of more than $80,000.
Why we’re doing it:
To fund our retirement and (cue Braveheart soundtrack) freedom! My husband currently only gets a paycheck from his job, not enjoyment. So he is trying to start his own small repair/customization business. He already is starting to build a base of customers and we hope that he’ll be able to leave his full-time salaried work. We are aware that even if his business is a success his pay might be erratic or less than what he earns now.
In the first few years of our relationship I worked in the corporate world and was being groomed for “bigger things” but I left for a lower paying job in my chosen field (research) at the start of the recession for fear if I didn’t grab the opportunity then, I might never leave.
What we have already accomplished:
My grad student loans of $22,000 were paid off within 2 1/2 years of graduating and we bought our house in cash.
How we do it:
Teamwork, some tax-deferred savings, and a bit of stupid luck. The husband-man and I are pretty similar in our feelings about money and spending. We were both raised working class and for the most part still have our lifestyle “set” at working class instead of upper middle class which is where we are now.
According to the mortgage calculators we used, we could have afforded a $400,000 home; however, we bought a $150,000 house. My husband, as mentioned, is talented at fixing things so we have not had to pay a mechanic or a repairman in all our time together. I make all of our meals save for a dinner out once or twice a week. I keep a spreadsheet on the best prices for our staples and buy when they hit them. I have the higher paying and more demanding job, so at times I have to work a lot hours. During those times my husband takes over the vast majority of our housework and started doing so on his own without us having to have a gender equity discussion first. Though my husband does have the more physical job so he gets paid back in back rubs on demand.
We are very lucky to have 401(k)s through our workplaces, live in a lower cost area, neither of us have ever had a major illness or injury, and while we both have been laid off, it was never at the same time.