As 2018 comes to a close, Liann and I look back on what we deemed as the year of saving. At the start of the year, we structured our financial goals to save as much as we could this year. In doing so, we were able to achieve a milestone of saving 50% of our post-tax income!
To save 50% of our income, we used everything we know about personal finances and learned some new tricks along the way. Here are some key strategies that allowed us to save 50% of our annual income:
Liann and I became debt-free in 2015, but it wasn’t until 2018 that we decided to heavily focus on our savings. By being debt-free, we are able focus a good portion of our income to savings instead of allocating it to living expenses and paying down debt. Without being debt-free, I doubt we could ever save 50% of our income.
Setting Financial Goals
Having financial goals that centered around savings allowed us to stay focused throughout the year on achieving this milestone. We had distinct goals for retirement savings, personal savings, and joint savings which we plan to use as capital for investments in the future. We used Big Picture Budgeting to track and achieve these financial goals.
Liann and I love traveling. We try to take a trip at least once a month. Traveling can be pretty expensive but we make it affordable through budget travel. We travel using a combination of different travel hacks which include:
- Traveling on off seasons or non-peak times.
- Flying budget airlines.
- Using reward programs.
- Redeeming credit card reward points.
One of our biggest savings in traveling this year was using budget airlines for flights. Learn how to fly budget airlines like a pro.
Use Reward Credit Cards
Reward credit cards allow us to travel for free or at discounted rates. We have redeemed our reward points for hotels, flights, rental cars, and gifts this year. Without these points, our travel expenses would have cost too much for us to achieve our financial goals.
Learn how to use Reward Credit Cards properly to maximize your rewards.
We have saved a ton of money this year simply by being savvy shoppers. Liann hates paying full price for anything, which means that when she DOES by things, they are on sale and/or discounted with a coupon/promo code.
We do a lot of our grocery shopping at Sam’s Club because buying in bulk is way cheaper than buying in small quantities at regular stores. Also, we have only purchased new clothes twice this year during deeply discounted sales.
Becoming More Minimalist
While Liann has always trended towards minimalism, I have been getting on-board with this in recent years. We hardly spend money on material things and have been donating a lot this year to get rid of the clutter. Being more minimal, we typically only buy things out of need rather than want. This keeps impulse purchases to a minimum throughout the year which allows us to allocate more money to savings.
Curbed Lifestyle Creep
Sometime this year we really noticed Lifestyle Creep getting the best of us with dining out. Once we noticed this issue, we limited our dining out experiences which resulted in us being able to save more money and complete our annual financial goals almost two months early!
Here are some tips on how to curb lifestyle creep.
Reduced Wallet Drain
Earlier this year, I noticed some drain on our finances through convenience fees and impulse purchases. These type of unplanned or unnecessary expenses are known as Wallet Drain. We course-corrected our spending and started avoiding convenience fees for online purchases, such as insurance and budget airline tickets.
Learn how to avoid paying convenience fees on budget airlines.
When making a large purchase, it is almost always better to pay for it in full upfront. By paying upfront rather than using a payment plan or an interest bearing loan, such as credit cards, you are avoiding any interest or convenience fees associated with them.
A small example of this is with our home and automotive insurance which charges a $5 convenience fee for every payment transaction. We have saved $90 this year by not using their payment plans.
Opted for DIY Projects
Liann and I have completed some house projects this year that we have been wanting to do for a while such as living room shelving and laminate flooring. We completed these projects with dad’s expertise, assistance, and the DIY-route rather than hiring out for the job. We have saved thousands of dollars by doing this on these projects and others.
For instance, we installed laminate floors on our first floor for just over $600. This would have been more than double to hire a flooring company to do the same job.
Lucky for us, Liann’s dad is very handy and has been helping and teaching us his ways! It pays to do DIY projects.
Liann and I couldn’t be happier that we were able to achieve this milestone. Stay tuned to see what our financial goals for 2019 will be.