Today’s guest post is from Polina. She is a member of one of the awesome Facebook groups I am in, Blog + Biz Bff’s. Check out her bio at the end of the post.
I recently left my 9-5 job to pursue a career in freelancing and online business. Although I wanted to leave my full-time job for a while, it took a year of preparation. The most important part of the preparation was saving money. I wanted to have a financial cushion while I focused on building up my business full-time.
My goal was to save enough money to live for a year as soon as possible. Although the task seemed extremely difficult, I put a plan into action to save 50% of my income each month.
To be completely transparent, let’s dive into the numbers. When I originally decided I was going to save 50% of my income, I was making about €1200 per month. For my American friends, that’s about $1320. Although it may not seem like much, my salary was average for my city (Barcelona, Spain). In addition, I was accustomed to living below my means. As a student, I lived with €500 or less per month (about $575).
How did it go? Pretty good! The quality of my life didn’t change – I just had to make a few adjustments and plan ahead of time. I was still able to eat out, buy new stuff, and travel occasionally. Here are the 9 steps I took:
In order to lower my rent, I got renters. Previously I rented out a room in a shared flat and paid about €300 ($330) monthly. To reduce that expense, I rented an entire flat and put renters in the free rooms. There was an upfront cost in deposits for the larger space; however, once the additional rooms were rented the renters ended up covering a majority of the costs including my portion!
I decided to cook and plan all of my meals in advance. First of all, I would make a list of what I needed at the grocery store to minimize wasted food. After I purchased the groceries, I would “meal prep” or cook for the entire week at one time. Then I limited myself to eating out once per week for a max of €15 (about $17). I repeated that system every week for a year! Not only did it help me save money but it also helped me eat healthier food! 🙂
Similarly to planning my food in advance I also planned my wardrobe. I noticed that I spent a lot of money on clothes and accessories that I hardly wore. Instead of impulse shopping, I started planning my outfits before buying them. That habit limited my impulse shopping because I only bought clothes when I really needed them.
I don’t have a cell phone. Yes, you read that right. I don’t have a phone. This may seem a bit weird or radical but I haven’t had a phone in years! I will admit that I do have an iPad which I use on the go. Messenger, Whatsapp, and Skype all are great phone substitutes and they are free as long as wifi is available. Luckily, there are plenty of free wifi spots in Barcelona where I live.
Related: 6 Bills you Need to Negotiate
I don’t have a car and I don’t use public transportation. I actually ride my bicycle everywhere! I am a cycling addict. On top of saving money, I get regular exercise and it’s good for the environment. Plus, since I love to cycle, I look forward to my morning commute.
I do realize this money saving tactic may not be feasible for everyone. However, if you have the possibility, you should try it!
I don’t have a credit card. Personally, I am not planning on buying a house anytime soon or making a large purchase in general. Not having a credit card helps me to stay within the limits of the money that I have and not tie me down with debts that could slow me down in the future.
I realize this is another one that may not be for everyone; however, if you have balances on your credit cards work on paying them down. The interest associated with most credit cards is outrageous!
Even though I was focused on saving 50% of my income, I didn’t let that stop me from traveling. I love traveling new places and figured out how to travel on a budget. For example, I traveled around Europe for two months on $1000. It all starts with finding the lowest flight available. Personally, I browse Skyscanner to find the cheapest flight possible. Once I find an inexpensive flight, I get creative when it comes to lodging. I have stayed in hostels, dorms and even tried couch surfing (or staying on couches of people I have never met). Even while traveling, I only allow myself to eat out once a week.
Despite living on a low budget, I still manage to have fun! I go to events like open air movie projections, museums, yoga classes, and concerts … all for free! I have been able to find plenty of free events in Barcelona. I am sure with some research you can find free or inexpensive events in your city too!
Related: 10 Awesome Date Ideas for Under $20
Besides lowering my expenses as much as possible, I also started making income outside of my 9-5. I ended up working as a web designer on the side for extra money. You would be surprised at what skills you can provide to someone to earn extra income!
If you want to save 50% of your income follow these 3 steps:
Keep Track of All your Expenses
Increase your Income
Before spending money, ask yourself these 3 questions:
- Is it something that you need?
- Can you do it yourself?
- Can you make it cheaper?
Author Bio: Polina is the founder of the Loom Creative. Based in Barcelona, she spends her time creating beautiful digital things for creatives. She enjoys blogging, designing, and banana pancakes. She’s also addicted to travel & adventure. Visit her blog for more info.
Editors Note: If you are like me, a lot of the sacrifices Polina made would be nearly impossible. For example, my job is 15+ miles from my house. However, I think there are key points to take away from Polina’s example that we can all apply. Are there certain things you can cut back on? Are there things that you are wasting money on? Can you make extra money through a side hustle? Can you rent out a room in your house?
Now it is your turn! Will you try any of these tips that Polina used to save 50% of her income? What’s your best strategy to save money?
*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and Racing Towards Retirement*
Subscribe below for posts regarding budgeting, saving, investing, and travel hacking to be delivered right to your inbox! No spam!