Goal Attained: 50% savings rate in 2 years

[Kenneth Cowan]

Call this a humble brag if you'd like, but I wanted to share our story and hope it can inspire more to do the same as we did. Plus, we should all take a moment in our journeys and celebrate the achievements, even if they are small and just the beginning.

Set a savings goal and reach it.

My wife and I started serious budgeting back in 2015.  We knew we needed capital reserves to make things happen and reach our goals.  So we started saving.  Our cash savings was basically nothing and we were only doing 5%/5% on 401ks at work.  So we started slashing some small expense lines and saved 10% more of our take home pay into designated investing reserves.  Then 20%.  Then we setup other investment and savings vehicles like Roth IRAs and an HSA.  30% of our take home pay was being set aside.

Then we read the @Scott Trench book Set For Life and a similar article he wrote (The Simple "Secret") about capital preservation, and it blew our minds.  We were going about it the wrong way!  Stop nickel and diming your expense cuts, and cut the big expense items, not the small ones!  So we bought a house to hack, and went from $2,000/mo in housing expenses to $433.  Then we cut the $100+/month cable bill and ~$500/month bar and restaurant bills.... and boom: 50% of take home pay was going into savings.

With a few other trimmings, we now save 62.2% of our take home pay into savings vehicles (Investing Reserves, Emergency Savings, HSA, 401ks/Roths). We set aside about 60% of our total savings into cash reserves for investing.  

I think the coolest thing is we've done all this with minimal changes to our income.  It was all on the bottom half of the P&L, if you will.

It takes time, but if you just take it in 5% chunks and do it month-by-month, after a few years you'll look back and be amazed at how far you can go.

[Bob B.]

@Kenneth Cowan Great job.  While most of America lives paycheck to paycheck, living over their heads, you've broken the mold.  I guarantee this discipline has invaded your daily life and you will be extremely successful.  It's amazing how less stress you have in life when there's a little cash in the bank.