Updated: Mar 6, 2020
In 2020 the standard rule about saving money still persists as the 50/20/30 rule. Let me explain if you are not familiar. The 50/20/30 rule states that you should plan to spend 50% of your after-tax income on needs and obligations that you must-have or must-do. With the remaining half 20% should be allocated for savings and debt repayment and 30% to everything else that you might want. Now this is a relatively great beginner template for allocating your money.
Questions you should ask yourself ahead of time when preparing a savings plan include:
Do I want to go to school/back to school to make a higher income? How is the job market for the degree I plan to study? Will I be immediately employable?
Will I require loans? How long will it take to repay these loans with my income upon graduating?
Can I save on rent? Am I willing to deal with the sacrifices that may come with saving on rent? How long am I willing to deal with those sacrifices?
Do you prefer to live for right now (you are never getting younger, but also will never have a more opportune time to get ahead)?
Are you willing to continue having roommates?
If you are sacrificing to get ahead I just want to remind you that life is a journey, in retrospect the valleys will mean just as much to you as the peaks because a lot of times thats where the true grit comes into play. Your integrity will be tested and proven in these times and in retrospect bring meaning to your life when things are smooth sailing.
Right now with my current living situation I am saving about 50% of my income. HOW? By living in a studio with my guy. YES, thats right we share our entire life in a spacious studio. It was hard to find but i straight up manifested this spot and we have been very lucky for it. There are MAJOR gains, and MAJOR sacrifices. Sometimes it's hard to keep them both in perspective but we do our best.
Our place is older but well kept in a cute area #HardtoScore
We are 300 ft from the beach in a walk-able community #SimpleBeauties
We have a garage and laundry on site #Convenience
Our neighborhood is full friendly neighbors, dog friendly, has a dog beach and is walking distance from our state of the art gym #Community
Ability to make higher California salary but save like living out of state #Progress
We cook most of our food to save money #HealthyLiving
We have been tested in the strength of our relationship and I can honestly say i'm not sure I could spend this much time with anyone else, having a 1 bedroom or an actual house one day will feel like a mansion #CoupleGoals
Limited storage, it prevents us from spending money but also sometimes we just really want something and don't have space for it. I dream of the day we can own a sectional couch #Minimalism #TinyHomeLife
Limited alone time. We do mostly everything together because our space and time overlaps so much including bedtimes and wakeup times. Sometimes this means getting 4 hours of sleep because your partner can't sleep or oversleeping because you cant resist cuddling a few minutes longer #ConflictResolutionSkillsGrowth
We have a tiny kitchen, i'm talking like 2 feet of counter space to meal prep, it can be difficult to prep as much as we would like which at times can lead to actually spending more to eat out #TinyKitchen
More pressure when processing stress or work-life imbalances #Pressure
Garage and Laundry are not accessible without walking outside our home, I realize both are an amenity in the city, but when its raining or you are dead tired its seriously no fun accessing either #CityAmenitiesAreStandardAmenitiesElsewhere
These are just some of the basics. Last year we willingly moved into a studio together and although sometimes it can be overwhelming, it also feels incredible to make financial progress so quickly. If you plan to save money in a way that requires increased pressure or sacrifice I recommend setting a timeline for how long you are willing to endure those sacrifices and creating an exit route. I know it sounds silly but when life gets busy it can be incredibly hard to break the cycle of your daily grind. We failed to do this and lately have felt that we are on a bit of a carousel, we are actively working on an exit strategy as we speak.
One of my biggest lessons this past year, especially in this endeavor is that balance is the key to being both HAPPY and SUCCESSFUL in anything. Social media feeds us a lot of information about how to be successful. One piece of advice I see often is that you have to be willing wake up early and go to bed late to pursue your side hustle/ side cash. Yes this might lead to success but not always happiness and don't you want both? Sometimes sleepless nights, 16 hours days and positive thinking is not always a realistic approach as good as it sounds. I also want to tell you that when you are happy you are most likely to be successful, just something to think on.
There are many ways to get ahead, whatever route you pick believe in your destined path and the payoff and always have an exit plan or next step in mind. Getting ahead isn't always glamorous but in the end its always worth it.
What are some ways that you save money or getting ahead? Please share with me. I would love to post an updated blog with reader suggestions. Remember we are all in this rat race together. I don't believe that we all have the privilege of avoiding the rat race, but i do believe we can all create the opportunity to escape it.
SO MUCH LOVE,