Saving 50% of my income

This post is a part of Women's Money Week 2012. For more posts about saving and living on less than you earn, see Saving and Investing Roundup.

Out of all of my 2012 goals, the biggest one is probably saving and/or donating a combined 50% of my take-home income. Imagine dividing your income in half. Could you make ends meet if you only brought home that much on payday? It's certainly not the easiest thing I've ever done, but it's probably the best time of my life to do such a thing. My job is stable and my expenses are low; I've got myself and the cats to take care of, and my sweetie contributes as she can to the upkeep of our household.

Here are a few ways I reduce expenses so that I can meet my savings goals.

Housing
This is a huge cost in urban areas, which means that plenty of responsible employed adults are looking to share housing. We share a small apartment with our housemate. She has the official bedroom, which is small but fits her needs, and the two of us have converted the living room into our bedroom. Thankfully, we rarely trip over each other, because a)there's a room with a closed door for each of us and b)we're mellow and introverted. No, we can't really invite people over for dinner. Yes, we have to share a bathroom. But, hey -- there's less to clean! And the rent's pretty decent for the city.

Utilities
We don't pay a lot in electrical bills, again because the apartment is small. Everyone makes an effort to turn off lights they're not using. The heater stays off; that's what blankets, sweaters, and heating pads are for. Sometimes the toaster oven is a better bet than heating up the big oven -- but as a bonus, the entire kitchen is warmer when the stove's in use. Our landlord pays for water, sewage, recycling, and trash removal for the whole building. We don't have cable (or even a TV); it's easier and more convenient to watch shows and movies on Hulu or Netflix streaming. The only other bill we have is Internet -- necessary for online schooling and source of information and entertainment all the time -- and we switched to AT&T U-verse when they offered a promotion.

Groceries
My sweetie handles the grocery shopping, for the most part. (The costs don't come out of my budget, so that's more toward 50% savings.) We shop sales, stock up on staples, and plan our menus around what we have in the house. Planning ahead is key to saving money on groceries. Here's a sample of what we bought in one big shopping trip earlier this year.

Transportation 
I don't drive, and neither of us has a car. In the Bay Area, that's a definite possibility for cutting down on transportation costs like car payments, gas, maintenance, insurance, and parking. (Parking costs a LOT in the city!) Instead, I have a Clipper card to swipe on public transportation. I send funds to a flexible savings account each month, and use the debit card for that account to fund my Clipper card's auto-load feature, so I'm never short on travel cash. Some, but not all, of those funds are added pre-tax (there's a new limit on how much can be considered pre-tax each month), so I get a boost at tax time, too. The funds don't expire at the end of the year, either, but if I leave my employer I have 90 days to use them up.

Eating Out & Entertainment
Well, grad school sure has cut down on my social life! Still, there are excellent dining opportunities in San Francisco, and I average one dinner out per week. That can add up! My tips: choose inexpensive restaurants sometimes; eat dessert at home afterward; drink water. Honestly, I think I save a ton of money over the average American consumer because I don't drink coffee, alcohol, or soda. I don't buy it for the house, and I don't pay extra when I go out. I asked a friend who likes the nightlife what drinks go for nowadays, and I was SHOCKED. (You probably already knew this, but $6-8 for a beer, $6-10 for a glass of mediocre wine, and $6-10 for a mixed drink?? RIDICULOUS. Have two or three drinks in an evening and you've spent as much or more as I did on dinner.)

On the entertainment front, I use Goldstar for "free" (that is, other than the processing fee, so maybe $3) tickets to comedy shows, film festivals, community concerts, and the like. I also volunteer as a greeter or usher with local groups whenever I have the time and want to see a show. Think about when you were a young, broke college student (perhaps you still are!). You can meet friends at museums on "free days" (often the first ___day of the month) or at bookstore readings or at the park. There's the aforementioned Netflix and -- of course! -- the public library for movie nights at home, and board games are an ongoing entertainment for some folks, too. Occasionally I splurge for Broadway touring show tickets, but that's once in a great while.

Clothing & Personal Expenses
I'm lucky when it comes to clothing: I don't follow fashion, and I really don't care about being stylish. I want my clothes to fit, to be clean and tidy, to be comfortable, and maybe to look interesting. I can wear what I want to the office (yoga pants and a hoodie are common attire; jeans are seen every day; no one wears a tie, and rarely do you see high heels), so my work-week clothing isn't much different from my at-home or out-in-public-on-the-weekends look (except that I may take more time with makeup or dress up a little more when I have the time). Anyway, I may make one shopping trip a year -- usually to the outlet malls during Thanksgiving sales -- for new retail clothing. Everything else comes from clothing swaps with friends (free! And you can declutter at the same time) or from a local thrift store (where I also take my donations). I don't really ENJOY shopping, but I do love finding a bargain. I picked up an amazing dress -- that I wore to my last birthday party -- for only a dollar! And there's always the surprise factor that makes you experiment a little; I'm more likely to take a risk on a fun item that's not really part of my usual wardrobe when it's $2 or $3, not $20 or $30.

I don't spend much at all on makeup and beauty-care items (although I make sure I have 50+SPF sunscreen in the house, and I use a lot of lotion), but I do indulge in a spa day every couple of months. I refuse to pay more than $15 for a manicure. When I have the cash, I get my nails done (because I'm too clumsy to do them myself); when I don't, I cut them short and keep them clean. Massage is a "necessary luxury", too -- but I have friends who have massage training, there's a couple of schools in the area that offer sessions at a reduced rate, and I receive emails from Yipit about special deals.

Vacations
I don't travel well. Once or twice a year, I end up going somewhere -- flying out-of-state to visit a friend, or driving to Southern CA with my sweetie for reunion with her buddies -- but usually I'm a homebody. Often, time off work is spent getting the house back under control, sleeping in, catching up on homework, spending time with my sweetie and local friends, and reading in the park -- and I'm okay with that. For big vacation trips, like our honeymoon or the Pacific Northwest road trip, I make sure to plan -- and save up -- ahead of time. It doesn't cost big bucks to relax and enjoy yourself. Just use the time well to balance your hard work at school or in the office.



Basically, living on half my income works for me. I feel the pinch now and again, when a great opportunity comes up and it's not in my budget, but a frugal lifestyle is suited to my personality. It helps to know that the money I'm not spending is funding my goals: an emergency fund of 6 months' expenses, graduate school, buying a house someday, a debt-free wedding. I've been going strong through this first quarter of 2012, and I hope to keep it up through the rest of the year -- and maybe beyond! If you're looking to save more, you don't have to apply all of these tips -- try one or two, and see how that works for you. For everyone there can be a balance of comfort and frugality, spending and saving.