hOW i SAVE OVER 70% OF MY INCOME
…. IN A HIGH COST OF LIVING CITY
By MeTheMillennial
Yes 70%. For every 10 dollars that I earn, I only spend 3 of them,
That leaves 7 for me!
I am MeTheMillennial, and I am on a journey to achieve financial independence by age 35.
Taking personal time back from the constraints imposed of sitting at a desk job.
All to follow my passions in life and spend time where I want doing what I want.
My life is all around maximizing how far my income can go to support this goal.
Efficiency without inhibiting life enjoyment….there is a balance.
This way, I can aim for as close to zero waste consumption as I can.
Only consuming what I need to have a happy life.
Not focusing on purchasing the best brands, or the nicest car.
The consumption and collection of material items is not something I strive for, and you shouldn’t too.
And to get to this savings rate, you don’t have to take extreme measures.
I don’t have to take cold showers to save on heating bills or go vegan to save on food bills.
I do the simpler things that actually increase my health and happiness at the same time.
Riding my second hand bike to save on transportation no matter the temperature, and it rains a lot in Vancouver.
I try to be a minimalist…
I actually physically own very little things.
No house, no extravagant car, no Rolex watch…
This helps achieve that goal but also gets rid of clutter in my life.
This leaves me calmer and more in tune with how I live and what I want in life .
So what does saving over 70% of my income look like?
The first full time job I had back in Dublin, Ireland, paid an income of around $33,000 CAD or ($25k USD). Very little, especially for Dublin being one of the highest cost of living cities out there.
Of that $33,000 I was spending over a third on my rent. Coupling that with driving a BMW (silly me) and eating my lunches out nearly every day, resulted in my savings rate being practically zero!
This led me into debt and continued this way for a couple of years.
I was 25, sinking further into the red, all while earning more than I ever have in life.. not great for a chartered accountant.
This was the start of my journey to financial independence.
I was so disheartened. Looking into the future, seeing the prospects of continuing on this path with no way of ever affording a house. Chained to my corporate desk until I was old and withered.
- I wanted to break out of Dublin
- Find new experiences was what I craved
- And to travel further and more frequently
- I wanted to focus on personal growth….to grow!
So what did I do?
I moved to Toronto, Canada… an even higher cost of living city lol
With that came a new job, waaaay higher salary (due to North American Consulting just paying a lot more).
But also more expenses and higher rent.
I promised to not repeat my previous money blunders.
Instead I took advantage of this higher salary which all in at the time equated to $150k.
Cooking most of my meals at home. Sidebar I’m now actually a pretty decent chef – let me know your favourite recipes in the comments, always on the lookout for more.
I bought a used bike which I cycle everywhere – check her out below.
Moved in with my girlfriend which immediately cut my expenses in half.
I doubled my savings rate.
At the same time I developed a deep sense of what was actually valuable to me..freedom.
I didn’t like my job, in fact I grew to hate it….only staying put because of the high salary.
Not having financial security to leave and quit kept me locked in with golden handcuffs. I felt trapped and didn’t know how to get out.
Until I discovered the FIRE (financial independence, retire early) movement.
I was reading everything I could on personal finance, the FIRE movement and actual people who had retired in their 20’s, 30’s and 40’s like the Financial Samurai or Mr Money Mustache (tip read everything you can get your hands on – here are some of my favourite books.
Having few friends in the city helped as I didn’t spend much going out with people.
But don’t go too far!
When it comes to saving money there is a line.
I see too many people on this journey crossing that line, sacrificing too much of the here and now for future happiness.
Don’t cut yourself off too much.
When you’re putting all your happiness on the future, or when you will finally be financially free, or hitting your target savings number.
Don’t forget to enjoy your time and the present moment.
Enjoy yourself, splurge when you need.
For me that means travel and experience or even a nice aquatic center I recently joined. (Completing a triathlon is one of my personal goals this year and I don’t plan on drowning in the first third of the race)
Never skimp on your health. What is the point in saving all this money if when you get there you have health problems and can’t actually enjoy it.
But you can cut out the excess in your life – trim the fat!
Focus on the excess you can cut out so you’re left with the things that are important to you and contribute to your happiness.
Establish this floor of expenditure without the excess. And this is your foundation of expenses.
Then turn your attention to raising the ceiling, your income.
Like me, focus on investing everything left over. Invest in assets that generate income and compound over time. Learn how to invest, follow the tried and tested and avoid the pitfalls.
Your wealth will start to snowball just like mine did.
In the last two years from January 2020, to January 2022 my investments have gone from $115k to $350k at the age of 30.
My net worth has tripled through focusing on my savings rate, cutting out the excess all while maintaining as much happiness and personal growth in my life as possible.
This was a wow moment for me, and showed that I can actually do it.
I could be one of those people I read about who went and achieved financial freedom.
So I set this goal of retiring at age 35.
I am determined to make it happen.
Growing more confident, and actually quitting that high paying job I hated.
I then moved to Vancouver … clearly a sucker for a high cost of living city.
With this financial security supporting me, I took an over 30% pay cut – moving into a job I found much more interesting with a team I enjoyed working with.
The best part?
It gave me time back, and actual work/life balance…something I thought was a pipe dream from working 100 hour weeks in my previous job.
Even with this 30% drop, I still maintain a savings rate of over 70% due to focusing on the principles I mentioned before.
If you’re interested I have provided a breakdown of my savings rate for full transparency based on my current $130k CAD (or $100k USD) a year job.
As you can see I still treat myself every month using the Miscellaneous category… which encompasses everything from almond croissants, cinnamon buns and coffee out, dinner in my favourite restaurants, travel and hiking, even renting a car when I need.
Habits Stick!
It becomes a habit, and you’re not weighed down by endless monthly commitments and bills.
Im also taking on side hustles in areas I am passionate about, like this blog.
Showing others it’s possible and spreading the knowledge and power of taking control of your finances.
These side hustles will further raise the roof and my savings rate along with it.
I want to thank you the reader for the support for all of this. You keep me coming back to write and share my journey.
I appreciate, read and reply to every comment, subscriber and email.
Blood, sweat and tears have been poured in to trying to make this happen.
But never sacrificing happiness.
Financial Independence is not about money, it’s about everything else!
I want to travel, connect with nature, have a strong and healthy body and mind.
And sometimes just take time to sit and daydream with a cup of tea.
You get to set your foundation, your values and what you want out of life. Not your boss or anyone else.
I’ve set the foundation, now it’s time to raise the roof!
You can do it too!
As always, follow along on my journey and subscribe to my newsletter and never miss a post.
Appreciate you making it to the end! Have an awesome weekend.
Hi MeTheMillennial, could you tell us a little bit more about how you keep your rent expense to $1200 in a high-cost city like Vancouver? For example, did you move outside the city center but remain on a metro line, did you choose a studio or roommates? etc. The details can help fill in the gaps around your decision making and how we can all learn something from what you’re doing. Thanks!
Hi Ryan,
Good question – rents are crazy here in Vancouver.
I would saw the average 1 bedroom apartment ranges from $1800 – $2600.
The simple answer is I halved my expenses, split my rent bill with my girlfriend…which has helped to improve my savings rate.
Very good article! Opens eyes to monthly waste we can all be guilty of, but spending on experiences like travel I agree is always worth it.
Awesome David – and yes experiences such as travel is money well spent!
Found this on Pinterest – great article. Driving a BMW at $33k/year is all too common. Clearly, you got your stuff together rapidly and are investing aggressively!
I like your points about balance and the freedom that a frugal lifestyle brings. I find the non-financial aspects of frugal living are just as beneficial. For example, less clutter bring wellbeing by freeing up mental capacity and time.
Hi Jake, thanks for the comment.
Looking back, it was such a silly purchase. I definitely enjoyed it but it made no financial sense.
Definitely agree on the balance. Life is there to be enjoyed and you can do both in my opinion.