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In recent posts, people have commented and some have been amazed by my above average savings rate…I would like to take this opportunity to confront the elephant in the room…
In case you haven’t read this post or this one, I’ll save you the suspense by saying that this year my monthly savings rate has fluctuated between a low of 57% in September to a high of 94% in June, currently averaging 75% for the year. I’m pretty sure when people read that they think one of three things:
- My income is REALLY high,
- I have a sugar daddy or someone else footing the bill, OR
- I must be holed up in my house between long stints at work trying my damnedest to not spend a cent.
Pretty far from the truth…unless I am reading a book in which case you can find me curled up on the couch. The truth is, 75% is a high savings rate – but it is also completely relative to MY lifestyle…
It is important for me to point out, I don’t put my numbers out there to brag or to compete. If you knew me in person, you would know that is so far from the person that I am. I write what I write in an effort to motivate others. It took me reading other FI bloggers to get my ass in gear. Hopefully, this can help someone do the same.
If you are new to the concept, in order to calculate a savings rate you have to look at two factors – your INCOME and your SPENDING. So let’s dive into the juicy bits first – HOW MUCH MONEY DO I MAKE?
First off, unlike many retired (or soon-to-be) finance bloggers, I am not an engineer. 🙂 I am also not a lawyer, doctor, investment guru who bought Apple at $1, or a professional basketball player (though I probably could be if I tried really really hard…not). I am a Flight Attendant. I am a peanut slingin’, coke yielding, sometimes nurse in the sky. Also known as a Stewardess (only if you are over the age of 80), Sky Barbie (minus the plastic and fake boobs), or a Cart Tart (though my airline doesn’t use carts).
Because my job is extremely flexible, I am able to work as much or as little as I want. In past years I’ve been guilty of taking advantage of that flexibility by skipping weeks of work in favor of hiking, staying home with Bubs, and doing home improvements which often lead to staring at the wall wondering what color to paint…seriously, that could sometimes last hours!
I was living within my means, but not up to my potential.
Last year, when I stumbled upon the FI community, a fire lit inside me. Not only did I make a goal to cut my frivolous spending of MONEY, I also made a goal to cut my frivolous spending of TIME. Cutting the financial spending meant nothing if I didn’t put my big girl panties on and force myself out of my semi-retired lifestyle and back into the full-time workforce…or close to it, I mean, let’s not get crazy!
This year I set a goal to work 100 flying hours a month instead of the 40-80 (ok, 60) average hours I was working. I won’t get into the logistics of Flight Attendant schedules and how we are paid by flight hour and not ground (see above pic)…it’s a tedious and boring conversation to have and to hear. But based on my hourly pay as a topped out FA averaging 100 trips a month + per diem and vacation days, I will be making around 75K this year (I actually hit 80!!)…not bad for a girl without a college degree. 😉 That number also happens to be the happiness tipping point as stated by many studies including THIS one from The Wall Street Journal…I gotta hand it to them, they may be right! After this past year upping my game, I feel better and more motivated than ever before.
But back to the moola – so far this year, I’ve grossed 66K with 2 paychecks to go. To be fair to these calculations, I also have to add the money from my side gigs which fluctuates but so far has net me 8k this year. Those gigs include things such as house sitting, random Craigslist sales, income tax returns, interest on savings accounts, selling my wedding dress on Ebay, and birthday gifts…these are all the ways I’ve made money in the past 9.5 months. That total amounts to about 60K after taxes (including pre-tax 401K). No big secrets and, unfortunately, no hidden sugar daddy. 😉
But that doesn’t help to explain the savings rate. For that, we need to look at my extremely frugal and boring spending patterns. How does someone who has taken home 60k so far this year, manage to save 45k of it??
The real secrets are below…
- First and foremost – I own my home. I didn’t go crazy and buy above my means (this time). I couldn’t – I was unable to secure a loan due to the 3 short sales I suffered during the housing crash (still working on that painful post). Two years ago I saw an opportunity to get back into the market. I immediately liquidated my ESPP, a flailing retirement account, and all my savings in order to buy my studio. These were not easy decisions but the outcome has helped me to lower my monthly living expenses and feel the pride I once had before my world came tumbling down. Plus, this unit will become a rental unit in a few months to come.
- Nobody calls me Mom (though I think Bubs has tried). I live with my dog – no other humans call my place home…except my BF when I can convince him to leave the cushy park-anywhere burbs for the no-parking-to-be-found-anywhere city. I have no children to cloth, feed, or bathe. I have no college funds to fill or nannies to employ. I am my only dependent (but I really think I should be allowed to claim Bubba on my taxes).
- My car is old…really old. No car payments for me…but I have had some costly repairs in the past few months that make me wonder how long I will keep the old girl around. She’s still pulling her weight so I imagine she will be just fine for a while longer.
- I work for a major airline which makes my health insurance dirt cheap.
- I eat twigs and berries…occasionally fish. After learning to track my spending last year I was amazed to see how much money I was frivolously spending at Whole Foods. Eating well is important to me, but my future financial independence is just as important. I cut Whole Foods off at the teat and now frequent Aldi’s for my dining delights. Costco is my other grocery source – Walnuts, tuna, organic olive oil, eggs…all mainstays in my kitchen.
- I no longer buy wine! OK, that’s not true…I’ve switched to boxed wine, baby. Not only is my new beverage of choice better for the environment (hello recycled boxes and bags!) but it is still a lovely evening (sometimes daytime) beverage at a more palatable price. 🙂
- Travel – my greatest love. When I fly, I fly for free…or close to it. I take full advantage of the perks that come with my job. I also prefer low-cost activities such as hiking and volunteer work as my go-to vacation agendas. Ever walk 500 miles in 22 days? Have you spent a week feeding and bathing elephants with daily one hour massages sprinkled in? I have. And it rocked!
I don’t actually budget. After tracking my expenses last year, I took those numbers and aimed to cut them where I could including my energy use, groceries, and expensive lunches/dinners with friends. I set a loose goal of $1500/month spending including all expenses and travel. As of the end of September, my average is about $1525. Pretty close…perhaps I should have skipped a few of those $6 massages in Thailand. 🙂
So there it is – I not only increased my earnings by nearly 50%, I lowered my spending and didn’t get sucked into lifestyle inflation…even though I was making waaaay more than previous years. A frugal lifestyle plus a bit of hard work truly DOES pay off! There’s no secret at all! Admit it, I totally tricked you. 🙂
Truth is, I have always been a saver but, until this year, I was not a great earner. As I said before, I was living within my means but not up to my potential.
Even if your life doesn’t look exactly like mine – you have kids, you make 50k instead of 75k, you pay for your own insurance, or you prefer nice spa vacations instead of 500 mile hikes through Spain – you can still find ways to spread the gap between what you earn and what you spend. You can still make lifestyle changes that will work in your favor. You can still make choices about your financial future going forward. I did and I am so much happier for it.
If this post helps you in any way, I am glad. If you need a bit of guidance or I can help you in any way, please don’t hesitate to reach out. Again, the purpose of this blog is to motivate others and keep myself doing the same. Thanks for reading! 🙂
Until next time…