Whenever someone asks me how my husband and I are able to save half our income, they want a quick fix answer on how to save a lot of money.
Most people have various reasons for saving—perhaps they want to go on vacation, they want to save for their children’s school, they’re trying to pay for a down payment on a house, they want financial security or to have a sizeable nest egg for retirement.
Whatever the reason, there are certain steps that people take in order to save a lot of money. It’s not always an easy path, but if you’re willing to put in the work, you can also save a lot of money.
Pay Off Debt
Everybody hates to hear this. But it’s pointless to borrow from Peter to pay Paul.
If you have debt, any money you save is technically owed to someone else. Work incredibly hard to pay off all your debt. And before you start complaining that you have too much debt and it would take forever, I want you to know that my husband and I had $45,000 in debt when we got married due to student loans, car loans, and credit card debt.
But we made paying off our debt a priority and we were able to pay off $45,000 in debt in 45 months. It took a lot of sacrifices like postponing our honeymoon, downsizing to a studio, and limiting our spending money.
But we did it, and you can too.
We Earned More
In the almost four years that it took us to pay off our debt, we also worked hard in our careers to advance and gain promotions. We make a lot more money now than when we first got married.
This has allowed us to put a significant amount of this money toward savings, because…
We Don’t Spend More Money
That’s right. We started earning a lot more money, but instead of spending it on upgrading our lifestyle, and buying fancy cars or designer clothes, we instead have been putting it in the bank.
But why would we be saving all our money and not spending it? Because I want to buy a house.
And saving for a down payment in southern California is not cheap.
The Number One Secret to Saving a Lot of Money
If you’re still looking for the easiest way to save a lot of money, then my number one secret is to spend a lot less than you earn.
People often find that the more they earn, the more they save. But if you can find that comfortable spot where you are living comfortably and don’t feel the need to spend any more, then any money you earn after that can go toward savings.
Just look around your life and look at the excess. Do you have a car payment that is really high? Do you have more house than you can afford?
Stop living by comparing yourself to the Joneses and start living a financially secure life.