How I’m Saving 65% of My Income Without a Six-Figure Salary

By Todd Kunsman

Saving Money

Published on

Updated on

I’m not going to lie to you here, this is basically a humble brag post. Hopefully educational and interesting as well, but let’s call this what it is.

My goal is not to come off smug, conceited, or that I’m better than anyone. I’m not. I make financial mistakes all the time still, even though I’ve taught myself so much over the years.

But my grandiose hope, is that you come away with what is possible, no matter your circumstances. I’ve had some advantages that certainly contributed to this point of my financial life, but it was also a lot of hard damn work!

However, you can get out of any financial rut, it might be harder for you than it was for me, or it might be easier. The point is, you can accomplish some amazing results by putting in the effort.

Now, let’s get into the goods. Below I’m sharing what it took to get to saving 65% of income, my next steps, and my ultimate savings goal for the near future.

You may have read my story about my path to $100k saved and invested, which this post here is essentially a part of that series. There is probably a bit of overlap too, which was inevitable.

No Six-Figure Salary

The reason I decided to include this in the title is because many of the articles about high saving rates, are people in a six-figure salary rage.

There are articles of people that don’t make that much too and there are also ones about people who make six-figures and barely save due to lifestyle creep. But the majority I see in major publications have big salaries.

And look, making more money and having a higher salary certainly can help you in big ways. More income, equals more potential to save. Generating more income helped me as well, which we’ll get into below.

But, I wanted to share my salary ranges for when I started my first full-time career of college to present. (Not giving the exact amounts to keep some form of privacy. My salary could be on the low end, middle or higher end of these ranges during the timeframes).

  • 2010 – 2014 ($30,000 – $36,000 Pre-tax)
  • 2014 – 2017 ($36,000 – $46,000 Pre-tax)
  • 2017 – Present ($46,000 – $85,000 Pre-tax)

It also wasn’t until late Summer and Fall 2014 when I started to take my personal finances seriously and work on build a savings rate and generating more income.

My salary from 2017 to present has certainly helped, especially since I’ve established a financial discipline prior. It pushed me into the 60% range by improving my salary. But even before this salary increase, I got my savings rate up to the 40+% range.

How I’m Saving 65% of My Income

Achieving a savings rate this high is not something that happens overnight and takes some work to achieve. It took me just about five years to get to this percentage, but the time to get here was well worth it when I see the results.

Below is how I’ve gotten to 65% savings rate and hopefully these tips can help you increase your own. Again, there are no big secrets!

Start with the basics – write it all down

Write every number down when it comes to your finances.

Things like your weekly or bi-weekly paychecks, bills, and other expenses. I certainly had an idea of numbers in my mind, but going off the fly like that is not enough to give you the full picture.

I wrote everything into a spreadsheet and added everything up. Now I visually could see where all my money is going, what is left, etc.

This also helped me catch where I could start make changes or what I could do to get more money back in my pockets.

Made expense cutbacks (to an extent)

Seeing all the numbers, it made me realize where I was either overspending or wasting money on things that really wasn’t important to my quality of life.

One area I caught, was that I was clearly overspending on food and going out socializing. Nothing wrong with it, but it should be in moderation.

I also caught monthly memberships that I wasn’t really utilizing much, so I canceled them.

Small things like this won’t make you rich, but these cutbacks will help you save more. I was happy to have $50-$100 back a month to save instead.

Additionally, I made efforts to save on living expenses. Moving out of a one bedroom apartment, to a two bedroom with a friend to split costs for example.

Pay off some piece of debt

No doubt, saving money is hard when you also have debt. I had student loan debt, a car loan, and a little bit on my credit card.

It was a bit foolish for me to get a brand new car in 2011, when my salary was low, had no real savings, and was living on my own, but it’s what I did.

However, the car loan had the highest interest and was over $320 a month. Getting that back to save each month would be a nice percentage increase and adds up quickly.

I started putting a bit extra a month first to get this lower and then in early 2017 I paid off the remaining balance in one shot. Took a hit in my savings at first, but quickly recovered with my savings rate and now the extra $300+ I get to keep.

Ideally, you don’t want to carry debt forever. Many people might have chosen to aggressively pay off their debt over saving, but I did both. I wrote more about that here.

Side hustles

I understand not everyone wants to do side hustles, but I found them to be incredible helpful in my financial journey in a few ways.

First, making more money which could go towards either expenses or right to savings. And second, they helped boost my professional knowledge. I learned a lot about marketing and websites by starting blogs, consulting, and freelancing when I could.

That in turn, was value I could add to my resume to get higher paying jobs and showcase my worth to companies. If you are looking for some side hustle ideas with serious income potential, check out this list.

Increase career worth

There is no question that increasing my salary helped me boost my savings rate.

However, making more money is not guarantee you’ll save well either. You have to have the financial foundation set, as to not fall into the traps of lifestyle creep.

During my savings rate strategy, there was a point where I plateaued unless I was making more money.

I hit around 40% savings rate, when there was no room left to save (unless magically my student loans went away). While cutting back expenses helped, there is only so much I could save on. But, with making money, there really is no limit.

So besides side hustling, I worked to improve my career in marketing. In 2017, I took a remote position with a higher salary, which gave me an extra 25% boost in my savings rate.

Keeping the consumer mentality in-check

Our society has a consumer mentality problem, we get obsessed with “stuff.” I still like the occasional nice thing and feel it’s important to treat yourself in someway. But, letting it get out of control hurts your savings rates and puts you in debt.

I don’t think there are any secrets to managing this other than practicing self-control and keeping your financial goals top of mind. It took a bit to break this habit, but once I did, I never looked backed.

Two things that help here, are remove your credit cards from one-click payments on shopping websites and also wait 24-48 hours before making a purchase.

By asking myself if its worth it and sleeping on it, 9/10 I realized I didn’t need it.

Create good financial habits that become the norm

Once I got my consumer mentality in-check I continued with good financial habits. Meaning, earning more, spending less, paying myself first, some budgeting, etc.

Your old financial habits that are hurting you are not easy to break. But as you start and keep your goals in mind, you’ll find good habits easier to do. It will get to the point where you don’t even think about it anymore, you just naturally do it.

I also quickly became addicted to the progress I was making with my savings rate. This made me want to keep going with what I was doing. At some point, this all became the norm and a daily part of my life.

Savings Rate

The Path to 100% Savings Rate

My next goal is to get in the 70-75% range and then ultimately, be at 100% savings rate from my salary job.

Because I love food and traveling, getting to my next level of 70-75% is quite challenging. But paying off my remaining student debt will free up more capital to save, increasing my job salary again, and making money off Invested Wallet will help get me there.

I’m not extremely frugal, probably never will be. I’m sure if I got more into that, I could easily get the percentage higher. But the effect on quality of life isn’t worth it to me.

Yes, it’s okay to enjoy and spend money on yourself! ?

But I have my daily money habits in check and I really shed the consumer mentality, which keeps saving money easier. I think 70% will be the max I can achieve at my current love of income.

My goal in the next few years…

Building my side hustles and investments up to cover 100% of my monthly expenses, to then be able to save and invest 100% of my income.

It won’t be easy, but I have no doubt I can do it.