How I Achieve Over A 45% Savings Rate WITHOUT Minimalism

Often I’ll read a blog or see a YouTube video preaching how extreme frugality is not just THE answer to early retirement, but will also somehow serve as some sort of spiritual awakening. While I don’t doubt their personal experiences, the result of this kind of message is a sugar high for mainstream society. And like any sugar high, it sounds so appealing at first. In that moment, you’re probably think it’s no big deal to downsize your big, beautiful house to live in a studio apartment, sell your car for a bicycle and suddenly be free from the vices of materialism forever. You’re just excited of the idea of saving SO MUCH money.

But then the next day comes and that rush just nose dives.

Now don’t get me wrong: I am pro-frugality. If you want to retire early, sacrifices will need to be met. But where I draw the line is extreme frugality. I’m all about taking one step back to take two steps forward – not five steps back and forcing myself to be happy there. I want to keep climbing up the Lifestyle Quality Ladder (totally coining that) while trying to save for the future.

I’ve made huge sacrifices before and they just never made me happy. For example, when I was playing in a band I decided to live with them so that we could ‘get serious’ about making it. Well, after a month living there we had broken up and we were stuck together for the next eleven months of the lease. After a few more months, I was just plain miserable. While I like being around people, having to constantly compromise my space with people whose company I didn’t like to be around anymore gave me too much anxiety. Even though I was saving a lot of money, it wasn’t worth the stress. And where things stand today in terms of my net worth today, that amount I saved doesn’t really register that much.

Which gets me to how I really get to a 45% savings rate (my after-taxes income vs. spending) even though I have a nice apartment, a nice car and like to buy cool things from time to time. Here are the main ways in which I’ve gotten to super savings status WITHOUT resorting to minimalism:

1) Living In An Area With Low Cost of Living

I live in a nice loft in Buffalo, NY. It has in-unit laundry, stainless appliances, hardwood floors, granite countertops – you name it. The rent is $1030. Pretty cheap considering anything with similar features in NYC, DC or San Francisco will probably be at least $4000.

2) Increasing My Salary Through Big Raises

I’ve tried not to always settle for only 3% annual raises in my career. My likelihood of early retirement is mainly a result of getting two big raises of over 20% in my career. Because of having a very decent salary in a low cost of living, I can still save a lot while occasionally treating myself to a nice dinner out or something costlier like getting LASIK surgery (so worth it btw).

3) No Car Payment

It’s been almost three years now since I’ve paid off my car. Not having to pay $220 a month has been a huge contributing factor for my savings rate. With that I said, it wasn’t like I bought a 1997 Honda Civic so that I could quickly pay it off. Instead I bought a 2013 Ford Focus Titanium. It’s a pretty nice car. Runs well and has a great sound system. I bought it as slightly used – had just over 3,000 miles – at $19k. So it definitely wasn’t cheap when I bought it.

Again, my philosophy is to not always to get the bare minimum.

Besides, getting a cheap car might cost you down the line with constant repairs and/or always getting a new car every couple of years. Because I bought a nice car in good shape, I hope to have it for at least another five years and therefore continuing to maintain my savings rate during that time.

4) Walking to Work

When I was looking for a new job a couple of years ago, I consciously was looking for opportunities near me. Luckily my current job is only a five minute walk from work. It’s allowed me to really only drive my car once or twice a week and they’re usually short trips to get groceries. As you might have guessed, I have saved quite a bit on gas. It’s gone down from around $120 a month to around $30-40. Of course, the savings don’t stop at gas because the less I drive, the less maintenance I need to spend on it. That means less oil changes and the likelihood of other car parts needing to be fixed or replaced.

As a bonus, being able to work has helped me mentally. I don’t need to fight through traffic or wake up as early.

5) Perks From My Company

OK don’t hate me for this but the first and biggest perk is I have free health insurance. This saves me hundreds of dollars a month. Of course, having good health plays a big role too which gets to my other perk: Free gym access. Instead of having to pay $30 or more for a gym membership, I simply use my workplace’s facilities for no cost.

So if you’re considering looking for a new job, don’t just look at salary or its 401k matching benefits. Other perks a future employer may offer could be potential money savers as well.

6) No Kids

Having no kids frees me up to only worry about myself. For those who have kids, literally everything you buy becomes a multiplier for what you buy yourself. But for me, it’s only a multiplier of one.

So that includes not need a big house or even a two bedroom apartment because I don’t have kids. I don’t need to upgrade to an SUV because I don’t have kids. I don’t need to double up my grocery bill because I don’t have kids. I don’t need to set up a college fund because I don’t have kids (although I could for any future kids but that would just be weird).

So what are some of the things you rely on to save huge sums of money? I’d be interested in what you’d have to say.

4 thoughts on “How I Achieve Over A 45% Savings Rate WITHOUT Minimalism

  1. Great savings rate and it sounds like you have some of the big ticket items (car and housing) under control. Totally agree with your comments about the need to be frugal but not go to extremes. Like most things in life you need some balance.


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