The Secret Behind How I’m Saving 40% of My Pay

Lauren Bowling

Credit: Stacey Bode Photography

In the LearnVest Personal Stories series, everyday people share the details of their money lives, discussing the individual choices they’ve made and how it’s impacted their financial journey.

Today, one woman shares how she went from being a spendthrift to saving nearly half of her income—each month.

I’ve never been very good at saving.

I’m a spender—shoes, trips, nights out, you name it. It’s a fact that became especially apparent to me when I found myself saddled with $10,000 of credit card debt after graduating from college.

Despite this fact, I decided to move to New York City a year later to pursue a career as an actress. The only problem? The minimum payments on my credit cards were so outrageous ($300 a month) that I had to put auditions—and my career dreams—on hold and get a steady, full-time job just to keep up.

As it turns out, I’m great at paying off debt.

I found a job as an administrative assistant at a hedge fund, making $45,000 a year. Between sticking to my budget and putting 30% of each paycheck toward my debt, it only took me 14 months to pay it all off.

I celebrated the feat by printing out a screenshot of my zero balance statement to display on the fridge. Having that measure of quantifiable success was empowering, but the truth is that I still hadn’t gotten the hang of saving—the one thing that could help keep me out of debt.

RELATED: Life After Debt: What To Do Once You’re Finally Debt-Free

  • ana

    I love this article! You should be so proud of yourself. I save 33% of my income every month, I don’t think I could save anymore than that but I’m slowing working towards my goal of paying for my next car in cash and then paying off my mortgage as soon as possible. Good luck, keep up the good work!

  • mostlywentzel

    Great story! I like that while you gave us real numbers, it’s really about the percentages. Focus on what you really need, then set a goal to save. And I agree – don’t beat yourself up if you don’t make your goal one month. Things happen. My husband and I decided to make 2014 “The Year of Austerity!” We’re giving ourselves a bit of a break from mid-June-mid-July because of a planned family vacation as well as some other family events, but otherwise, we are united in paying down debt and saving with a clear plan. And you know what? It’s kinda fun!

  • Liz

    This is definitely one of the better articles I’ve read on here! I’ve even tried saving every other paycheck to get to that 50% savings and live off one paycheck for double the time — a challenge but doable!

  • Carrie

    What a great article! Hard work pays off and it’s so wonderful to see how far you’ve come! Thank you for being an inspiration to so many women, LB. :)

  • mara

    I love this!!! – thank you for sharing. This is our goal after our wedding which we are cash flowing by saving big time for the past few months. I found out it was possible when I saved aggresively to buy my car cash, then cash flowing the wedding while still growing the emergency fund. AW (after wedding) we hope to finish the EF and reroute everything to save for a down payment and invest. Thank you for the motivation!!!

  • Heather

    These are great tips… for people who make a reasonably comfortable income. My entire income for the month is basically the equivalent of what the author puts away each month, and I live in a high-cost-of-living city (Miami). Right now I’m not feeling like my financial goals are any more attainable!

    • Lauren Bee

      I agree, Heather. One year ago I was making 34k annually and barely cracking 2k each month in take home pay. It’s hard to save aggressively when you do not make a lot of income, which is why I doubled my freelancing efforts, which I was then lucky enough to keep after I got a better paying job. I hope the one thing people take away from this piece is that it’s important to just save something even if it’s $20 here and there. Thanks!

    • Dylan

      I agree it can be hard, Heather, especially when you know there is not a lot you can do to increase your main paycheck – but there are ways to earn extra money if you’re willing to put in extra effort and time. I was able to save up enough money for a down payment for a house on a very modest income while still paying off school loans, and I don’t live in a cheap area. I sought out opportunities to make extra money, and jumped at every chance to make some extra money I could.

      Once I finally got the opportunity for some consulting work, I was persistent (but polite) with following up, which eventually turned into a semi-reliable extra $3k each year. An added benefit of the consulting work was the connections I made with people well-established in my industry.

      I also sought out money-making opportunities online – doing surveys, reviewing products, gift card sites – these take some time, but I usually make an extra $2k a year in gift cards (Amazon or PayPal), which is great because I can use them to buy necessities or fun splurges, which means that most of my paycheck can go towards bills and then savings. The amount of money I make with these are directly related to how much effort I make – so if I’m feeling burned out, I simply scale back for a month or two.

      If you are working about 40 hours a week in your job, that actually leaves a fair amount of free time to pursue additional work – either something related to your field or maybe in an interest/hobby you have. Even small jobs add up and really make a difference.

      Good luck!

    • Anna Prophet

      That is great for people who can work extra. But when you already work full time and have kids, there is pretty much zero extra time to work on other avenues, unless I deduct from my 6 hrs of sleep per night. And I feel like with kids, there are always unexpected expenses that are hard to plan for. I am trying to be more concious of where my money is going but I just don’t feel like I can get my head of above water. My expenses are pretty much equal to my income.

      • Marguerite

        After my divorce, I was in the same situation with a very low income, that did not even cover my regular bills. It may not be encouraging now, but I did make it through a few rough years and fully recovered financially. I was able to buy a home for us and we had everything we needed, (not everything we wanted). My 3 daughters are now grown, 2 have college degrees and the 3rd has on-the-job training (by choice) and has moved up to a management position in HR. I started by having A Credit Counseling Co. assist me with the bills left from the divorce. From there, I made a spread sheet to track every dollar that was spent for 3 months to see exactly where the money was going. I then was able to get my girls involved. I showed them the spreadsheets and asked for their suggestions of where we might cut any expenses. We cut cable TV, we trimmed hair and beauty products, etc. we also tried out shopping in Good Will and Consignment Stores, which is something we all continue to do today. It is amazing what you can find and how much you can save. We were even able to save on day trip vacations, finding free things to do, close to home, hiking, going to the beach, etc. I sold my gas guzzlin SUV and bought a used economy car that was much newer and used much less gas, and saved even more since it needed no repairs. I can’t say it was easy, but we did it, and my girls learned valuable skills. They each got part-time jobs when old enough and helped out with household expenses with part of their income. They learned to save part of their income and had a nice down payment for their first car when they were ready to drive. They stayed home and went to the State Univrsity rather than having the extra expense of living away from home. One had earned a full scholarship for her academic achievement. You are right, you cannot work any more than you are already working. You will need to look for other ways to trim expenses. It may take longer, but you will get there. I hope that you can use something from my story to help you to reach your financial goals.

  • Alison

    Great write up – I love the inclusion of percentages and the inclusion of real numbers. I’ve also been way better at paying off debt than saving, but articles like this one keep me motivated. I’m really looking forward to reading more on your blog!

  • Tesse

    I was definitely inspired to start saving more and to start looking for a part time gig. I just started my first job out of college and I have no major debts so i am just trying to save as much as I can. Thanks for the advice!

  • holly

    Love this article! i also live in ATL and its so hard to save money. I’m about to start my last year of college and live by myself (bad roommate experiences recently). I have been freaking out about how I can save any money in the process. I’ll be living off ramen for a while longer but it’ll be worth seeing that student loan number go down!

  • hdavis

    I make $52k/year and spend about $13k. Per month, rent is $655 and food is around $300, phone is $20, Electricity is $20, fun is $20, (heat, water, internet is included in rent). I might have a few hundred in miscellaneous expenses over the course of a year. I don’t need cable since watch TV online, don’t need a car since I ride a bicycle. I live in MN. My savings is $385k. I’m 34 years old.

    • jerry25

      Impressive!! But $655 in rent! Maybe I need to move haha mine’s $1690 for a 600 sq ft one bedroom in Southern California and utilities aren’t even included.

      • hdavis

        Lovely Minnesota. Come for the summer, and stuck over the winter.

    • Anna

      Can I ask what type of phone and phone plan you have? Also congratulations on the savings! Definitely goal inspiring!

      • hdavis

        AT&T Go phone. $25 every three months. I don’t call many people.

  • Michelle

    This gives me hope. I would love to be saving that much of my take home income!

  • Anne @ Money Propeller

    Great write up Lauren! What a change in savings, I am really impressed. Congrats on increasing your income so much, too.

  • maria rose randazzo

    I had to stop reading your article after I read the part about moving in with my parents. Okay I get the necessity of that, but after that point anything you said about saving your money is no longer helpful to those of us, who no longer have someone to lean on during the rough patch while paying off debt. I am a single woman of 65 years, who has one of those live with parents child. Okay they’re paying part of the expenses and also take care of my needs, but when one is the head of household, the necessary bills are higher and saving is harder. I am in the process of eliminating all my debts, which I would have done completely if my company had stayed in business until I reached full retirement. I had to totally revamp my budget to my lower retirement income ( pension and Social Security) which don’t go up but stay at same level while other costs constantly go up.(think utilities,etc) I will achieve my goals and have my emergency fund and back up money but I won’t have that as fast as someone who doesn’t pay rent &/or mortgage payments, as I am sure you’re not.

    • Marguerite

      This 40% savings is for young single people who are just starting out in life and have not really taken on much responsibility. Once you have children, and are responsible for them and for yourself and there is no other possible income, or person to contribute even in an emergency, the picture changes. It is commendable that some young people become responsible with their income early and are not wasteful, realizing that one day they will want to buy a home, maybe have children, and eventually retire. It is great to be financially prepared, if you have that choice. For those who have circumstances that do not allow financial preparation, we just do the best that we can and try to be creative with reducing expenses and increasing income. There are many older ones who have to pay for life sustaining medications rather than buy food. That is an unfortunate reality of life in this world that we live in.