Ms. Simple Before
Just a couple years ago, I had a frugal mind set but didn’t take steps to optimize my money very well. I grew up without a lot of money and instinctually knew what was a waste of money.
However, with a little luck and lots of hard work, I built a stronger foundation to live on as an adult than what I had as a child. As money always interested me, I sought out a business degree and have been working my way up in financial roles ever since.
As a young adult I found myself indulging and spending money on things I never had as a kid. The valuable money lessons I learned as a child were still there but had been temporarily buried.
It wasn’t until I reached my mid 30s, where I was married with 2 kids and a mortgage, that I decided to get more serious with my personal finances. Even with a good paying job, I was barely saving 9% of my take home pay (after taxes and insurance costs) 2 years ago.
Ms. Simple Now
After taking a close look at our finances, my husband and I, are much more financially savvy now. Currently, we are saving roughly 35% of our take home pay.
We did this by scrutinizing our expenses and cutting out the extras. Then, we took another look and thought about how we could lessen the expenses by finding new methods to do things on our own. For example: smart meal planning verses eating out.
Additionally, we have taught ourselves the fundamentals of investing and are earning double in returns than we were 2 years ago.
Previously, we paid a financial advisor a “small fee” to manage our investments. Big mistake! We’ve educated ourselves enough now to feel comfortable making our own investments.
It’s all too easy to fall off the frugal bandwagon when you start making some decent money. Fortunately, it’s not too hard to jump back on. However, it does help to have a goal in mind to help you stay on track.
For me that goal is financial freedom. I like working but if I find myself in a bad job situation I want to be able to walkway without financial fear. I also want the option to retire before 65.
Those are some big goals though and you may not be ready for those just yet. Whatever your motivation is here are a few ideas to help increase your savings rate: