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Saving 52% of My Pay When I Make Less Than 40k

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I admit my choices have been far from standard. For each opportunity I said yes to there was a cost, sometimes the payment was large and sometimes it was trivial.

As a disclosure, I have helped myself to plenty of privilege too. I’m a white female American who grew up with two parents and obtained a high school diploma with minimal effort. The disclosure is stated but a residual guilt lingers.

Having a high savings rate when I make less than 40k starts with what I don’t have, debt.

Ditched Debt

I’m free of debt.

I avoided credit card debt even though my shopping habits tried to change that. I paid my car off a few years ago and I’m not shopping for a new one. Even though my current model is 8 years old and has 86,000 miles, free beats financed. I eluded school loans because I went to the military and swapped 4-years with 40k worth of student debt.

Outside of a mortgage which was been refinanced at 2.25%, I have no debt.

Without high-interest debt sucking the life out of my pay, it’s how I’m saving 52%.

Retire Admire

20% of my pay is allocated to pretax and post-tax retirement accounts.

As a federal employee, I get a 5% match for traditional TSP (401(k) gov style) contributions. I’m stubbornly serious about retiring early so I built up my Roth TSP contributions to 15% to rocket my savings rate.

I didn’t start out this aggressive.

I couldn’t start saving 52% even if I wanted to. When I first started the ranger gig, I bought back military time for $2000, social security was delayed but eventually had to be paid back, and I had enrolled in a new FSA account that demanded pretax payment. A few payments became a cumbersome burden that couldn’t handle a bag of potatoes let alone a pound of payment for early retirement.

I had to do what I hate to do, wait. I had to wait to pay off all the things before turning my financial focus to retirement.

Initially, I started with 15% for retirement including the 5% match, but as I started gaining speed, I realized the price of early means more money now. So, with each bump from a government mandate to paygrade increase, I added an extra 1-3%.

Sharing Burdens

I share bills.

The cost of a mortgage, utilities, and groceries is shared with Mr. BuLL, a permanent roommate.

Mr. BuLL and I share living expenses but that is where financial sharing ends. If I want to travel, buy secondhand clothes, or a one-way ticket on the Charlie Russel Chew Choo, this frugal gal has to pay her way.

I live in a cheapish area too.

In semi-rural Montana, prices are cheaper than any inch of a metropolis but there are other costs too that rear up like a tiny but angry t-rex ready to take a bite out of saving 52%. The next closest town is an hour and 20 minutes away. It’s a smaller town but it has more Costco-like amenities. If I need a bigger town, the distance is further, and the cost is greater.

The boon and bust of living in a kingdom dominated by landscapes instead of metroplitan shapes.

Frugal Life

From no-spending sprees to free hobbies, I’m the frugal life.

It was only this past year that I crested 30k. For many years, I had minimal pay but was maximizing stuff. Eventually, I realized the investment in stuff was stuffy like a wool sweater 2 sizes too small. Gradually, I added frugal saves which lead to bigger saves.

My biggest money wins are:

Using a budget to track and manage income and outcome
Free fun including borrowing library books, writing, drawing, juggling, and volunteering
Replacing outsourcing for insourcing (cooking at home and DIY maintenance)
No-spending sprees sounds better than avoiding stores but it’s what I do!

My funds need intention so they don’t need a crisis intervention.

Galvanized Goal

I want the option of early retirement. Currently, I love my job and don’t want to retire. However, the only constant is change, so chances are I, work, and my coworkers will change.

When that happens, I don’t want to feel the panic of being pitched into an unemployment abyss. I have plenty of exposure with furloughs and I don’t want finances to be cause for concern for every burp and gurgle of change.

Having a goal of retirement, that is funded by this party of one, is what keeps my savings rate high and pushes everything else to a lower rung on the priority scale.

Could I use a new car? New clothes? A new multi-colored toilet bowl light? Probably. But I prefer to keep working on a goal that has longer lasting rewards than giving into fleeting toilet-bowl based desires.

It takes more time to make money than to spend it.
Darius Foroux