How I Started Saving 70% Of My Income

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Like most people, I grew up not having any personal finance education. The only lesson that my father gave me was never to spend more than I earn. I did that, but I never saved or invested. I believed you needed to have lots of money or know everything about the stock market to start investing.

Back in 2016, a friend of mine shared a Brazilian YouTube channel about personal finances. I was shocked when I calculated how much I was spending in a year. When I saw how much I was spending on restaurants and stuff that didn't bring any value to my life, I decided to change.

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That's when I started budgeting and reevaluating my financial choices. I knew exactly how much I was spending and started investing in fixed-income assets in Brazil.

Once I got more comfortable with budgeting, saving, and the basics of investing, I started exploring the possibilities of optimising my finances even more.

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Eventually, I came across this book called Early Retirement Extreme - A philosophical and practical guide to financial independence. Early Retirement Extreme is a way of simple living. You invest as much as you can to live off of your investments and retire, if you want, before turning 65 years old.

And that's when a whole new world of possibilities was unveiled to me.

Adopting FIRE - Financial Independence, Retire Early

My husband and I live in a very expensive city (Vancouver, BC). As software developers, we make a decent income from our jobs. However, it doesn't really matter how much we make. It's how much we save that matters most.

We both have friends that make more than us, but guess what: they also spend more than us. On the flip side, a couple of our friends make half of our income but also manage to save more than 60% of it. It's always a choice.

My husband and I started our FIRE journey in 2018. We plan to become financially independent before 2025. That means we will be able to leave our jobs and work only on what we want to, not because we have to.

We followed the steps from Jacob's book:

1. Tackle your biggest expenses first: If you find a way to pay less for rent and minimise your grocery bill, you will save hundreds of dollars per year. Bonus: if you don't eat meat and dairy, you will probably save even more. Plus, it pays forward too: a plant-based diet decreases the chances of having chronic diseases.
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2. Adopt a deflation lifestyle: We always review our expenses to see how we can spend less, find alternatives, etc. Also, don't treat a bonus or a raise as an excuse to spend more. More money investments == less time working in the future.
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3. Stop paying for stuff you don't need: For example, subscriptions. The only subscription I pay for is Spotify because it helps me exercise more. You can always share the subscription with family/friends. You don't need to pay for stuff just because your friends do.
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4. Buy second-hand stuff: First, it's more environmentally friendly. Second, people donate lots of good stuff. I always visit thrift stores first. The trick is to visit thrift stores located in prestigious areas. The last time I visited one, I got some fairly new sports apparel for less than $50.
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5. Find better deals for your fixed expenses: Internet, heat, home insurance. Canada has some very expensive Internet providers, but we were still able to get a good deal for less than CAD50/month. We also don't have mobile internet plans because the city has WiFi everywhere. Plus, I don't need nor want to be online all the time.
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6. Do more free things: You can easily avoid spending money on entertainment by doing some life hacks. Instead of eating out, why not invite friends for a potluck party? Or have a picnic in a park? Ride a bike? You can have fun without spending a buck.

My advice for beginners

If you got here, I still have a few things to share that I wish I had realised sooner:

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1. Don't overthink. If you need help, hire a one-time fee financial advisor to help you create your portfolio. Or just buy a one portfolio ETF. Or use a robo-advisor. There's no excuse. You already pay for convenience for everything in your life; why not do the same for your finances?
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2. Immerse yourself in financial education for a few minutes every day.
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3. Start with the simplest investment out there. Once you build the habit and the confidence, research what's next. Keep doing it.
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4. Find groups of people that can help you achieve your financial goals. We attend the local Mr. Money Mustache meetup group. Koody is a great resource; make sure to use it as much as you can.
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5. If you don't know what your priorities are, then you won't know WHY you're saving money, and it's going to be harder to save for your future. Figure out first what matters to you and take the steps that will lead you there. Once you have a clear idea of your WHY, it will be easy to say NO to things that don't add value to your life.

Over the past years, saving so much money gave me the choice of first working a 4-day work week and now resigning from my well-paid job to focus on my projects, which are the hexdevs podcast and The Plant-Based Diet Club. It can certainly take years, but there’s nothing like having the freedom of choice when you most need it.

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And that's a wrap! If you enjoyed reading this post, please let us know by leaving a comment below! Also, you can be a part of a much bigger conversation here - join our community! If you would like to share your story with us, send an email to blog@koody.co. Alternatively, send Halimah a DM!

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