What 3 years of savings looks like

I increased my savings over 5x in about 2 years.

Here’s EXACTLY what happened (so you can decide what will help you, too).

This week, meet:

➡️ Savings as a privilege
➡️ The Breakdown: What it really looks like to “build savings”
➡️ The big savings picture

Savings as a privilege

I started my first real savings account right before my senior year of college.

My car needed repairs. It was going to cost $1200.

I had spent the last 2 months scraping the bottom of my coin jar to cover rent. I called my mom on the brink of tears. What should I do?

“Well. I don’t have $1200 to give you. So, I guess you need to take out the credit card they offered you, then just wait until you get paid next.”

I knew my next paycheck wouldn’t be enough.

I called my mentor from high school. She always told me I could come to her for help, but I never thought I’d have to take her up on it. She was generous and discrete. The money was nothing to her.

A few days later, my mom let me know she was able to scrape together part of the money to send to me. When I told her I already got it figured out, she insisted I keep the cash anyway.

After paying all my bills, I had $900 leftover.

It’s dramatic, but I truly believe that $900 changed my life.

I’ve never again been in a situation financially where I sat on the brink of tears thinking, What should I do?

How do you BUILD savings?

That was the start.

From then, I put as much tip money as possible into savings every month.

Over time, I cobbled together a couple thousand dollars. The most glorious part? I could dip into it for emergencies, instead of taking out a credit card or crying to someone for help.

But I ended up in a yoyo pattern — put in $200 one month, take out $800 the next to cover expenses.

I felt like there had to be a way to “get ahead and stay ahead.”

Which is where our story picks up…

The Breakdown: What it really looks like to “build savings”

People tell you to build your savings, but they don’t show you what that practically looks like over time.

So let’s look at the last 3 years of my savings history.

The numbers I use are a savings RATE. Not the raw amount I saved. So you’ll see numbers like “15%” rather than $300.

Why?

It’s a very different thing to save $500 when you only make $1500/month (impressive!) and saving $500 when you make $10,000/month (eh).

If you’re focusing on building a savings HABIT, using savings rate can be more helpful (and less discouraging) than counting raw dollars.

You’ll see why.

2021: Taking the leap

Average savings rate across the year: 9%

Highest month: 23%

Lowest month: 3%

Monthly income range: Between $2,000 and $3,000

Stage in life: Turned 24. Two years past graduating college. One year past pandemic lockdowns.

Habits I started:

• Direct deposit from my paycheck into savings. First 10%, then 15%.

Pivotal moments:

• Look at that chart. January through July I was putting 10% of every paycheck automatically into savings. Do you see that line hovering near 10%? No. You see me taking out money from savings to cover my expenses every month because I ALWAYS went overbudget.

• Until July, I worked at the beloved Coffee Cottage — a local coffee shop; a staple of the community; a home to me for 4 years as an employee and longer as a student; where I met the love of my life; where I made friends I’ll remember forever.

  Which, of course, is how I think of it now, through the rose-colored glasses of nostalgia. At the time, it felt more like the job I was stuck in because I didn’t know what I wanted to do with my life, and had no idea how to get any other job during the middle of a pandemic. It was work that exhausted me; it was work that paid the bills, but only barely.

• SO, at the end of August, I took the leap. I left the coffee shop I called home, and got a super glamorous desk job for a small business doing data entry and listening to angry customers on the phone. When I started, it paid about $5 more per hour than Coffee Cottage. I got another $3/hr raise a little later on. So, that was nice.

• The cool thing about increasing your income? You can change NOTHING else about your life, and suddenly your savings rate doubles. I’ll learn more about this in 2022…

2022: Taking an even BIGGER leap

Average savings rate across the year: 19%

Highest month: 37%

Lowest month: 10%

Monthly income range: Between $3,000 and $4,000

Stage in life: Turned 25. Full swing in a serious relationship. Starting something resembling an “actual career.”

Habits I started:

• In July, I upgraded from a basic budget that I never followed, to the first iteration of The Reverse Budget. Back then, I just called it my Savings Plan, and it didn’t have all the bells and whistles it does now.

• Looked for any way possible to make extra money: online surveys, rewards apps, credit card points, freelancing (more on this later).

• Moved all savings above $3,000 to a high-yield savings account.

• Started a Roth IRA for retirement.

• Started investing a teeny-tiny amount in stocks.

Pivotal moments:

• The biggest thing this year: I started freelancing on the side. It’s fun to see how the bumps in the chart above coincide with my freelancing experience…

• I got my landed my first clients in February, bump #1. This included my very first long-term client.

• Bump #2, May, was when I got my second long-term client — the highest-paying one to date.

• June, I quit the desk job. Or — I tried to. My boss talked me into staying half-time. She offered remote work, keeping my health insurance, and taking all the angry customers off my plate. Easy. I’d stay. I ramped up my freelancing gigs.

• Bump #3 begins in September. My first long-term client referred me to his new employer… And they brought me on for my biggest, highest-paying, and most important role yet. (Remember this part. It’s important later.)

• At the end of 2022, I moved in with my partner.

2023: Okay! That’s ENOUGH leaps!

Average savings rate across the year: 48%

Highest month: 56%

Lowest month: 18%

Monthly income range: Between $3,700 and $5,000

Stage in life: Turned 26. Took on a new full-time job.

Habits I started:

• All sights were set on buying a home. Savings ramped up to the highest possible level without tanking my quality of life.

• Did all the habits I built in 2022, but… more.

Pivotal moments:

• My biggest client promoted me to a bigger role in January. And then a bigger one in April. And then one so big in May, I had to drop all other freelance clients.

• In August, this client offered me full-time work. So I said goodbye to my other job. And I said hello to a salary, full benefits, and writing work — which I never thought I’d get PAID to do.

• Remember how I moved in with my partner at the end of 2022? Well, the place we lived in sucked. (Picture it: dark, smelly basement apartment. Low ceilings, under other renters with two large dogs, a grow room they often overwatered, and a garbage disposal that backed up into our water heater closet.) We desperately needed out, so this year was a hail mary for home ownership.

• July I met with a mortgage broker. August I met with my realtors. Weirdly, I bought the first and only house I looked at. Even more weirdly, it’s worked out wonderfully. Surreal, to this day. This is been my #1 life goal for years.

• So what the HELL happened in December? I hadn’t saved such alow % since August the year before. Well, December was a special month. December was the month my very first mortgage payment was due. 😁

The big savings picture

Here you have it, all at once:

This chart represents the spectrum of interaction with money: having quite a little, having quite a bit, renting, owning, full-time work, self-employment, emergencies, trips, and everything in between.

Here are the major takeaways:

• “Decrease your expenses; increase your income” is the most annoying personal finance advice to receive… Yet it’s also the most reliably accurate.

• Finding a system that works for you is vital.

• Always be open to learning more about money management. 2022 was the year I got serious about learning, and it paid off.

• The self-reliance good savings offers is ALWAYS worth the self-sacrifice it takes to get there.

“Wait, I need MORE”

Here are my goals for this year, that I’d love you to be a part of:

• Building a place for folks to learn how to manage their money.

• Real talk about finances and actual budget breakdowns.

• Regular live Budget Nights where we track our finances together (and tbh probably drink wine).

• 1:1 budgeting help, for those who’d find it helpful.

So far… None of these things exist in the Meet Your Money world.

But I’ll keep you updated, and let’s see where we land by the end of 2024 🙂