Budgeting, Featured, Saving

Saving Is Not Easier For Some People

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Saving has never been a negative or restrictive thing in my mind. Even when I had very little money, I was happy to save even when it put a strain on my budget. Back when I was making $50k a year, I was saving 6% of my salary pre-tax for retirement and about 20-25% post-tax for emergencies. Now that I’m making more, I save about 14% of my salary pre-tax for retirement and about 35-45% post-tax for emergencies and other goals. If you’d like to see where all my money goes, take a look at my money map!

Saving a greater dollar amount is definitely easier for people making more money. The act of saving is a different story. When I was working almost minimum waging barely scraping by, I didn’t save. All my friends were salaried and saved, and I thought, it’s just easier for them to save. Instead I was off buying shoes every other week.

Let’s view saving as a percentage so that savings is always relative to your financial situation. When I breakdown my salary into percentages, it sounds like saving is a one and done process. I get the money direct deposited into my account, and that’s it, right? Not really.

I want to debunk the myth that saving just comes naturally to some people. It doesn’t! Wanting to save may come more naturally to some people, but the rest of the process is the same for everyone. Actions takes initiative, research, and willpower. That’s why I named the desire to be good with money as one of the hard prerequisites for actually being good with money.

For many who have the luxury of having leftover money at the end of the month, there’s a certain percentage or dollar amount they can easily stash away, and the rest of it comes down to really great tracking, a spending plan (a budget), goals they’ve specifically calculated, and even a few weird mind tricks for making that last little bit saved untouchable.

I’ve broken down all the different levels of saving with some tips on how you can implement each of them.

The Easy Savings

Easy Savings = Money saved with absolutely zero lifestyle change and zero effort to save money. It’s going about your daily life but naturally spending less than you make.

Let’s say after fixed expenses, I hypothetically, have $1500 a month to spend however I wish. No one actually spends money like this but to simplify things, let’s say that means I can spend $50 a day ($1500/30 days). Then let’s imagine my average spending for a week day looks like this:

Commute – $3
Cappuccino  – $4
Breakfast Sandwich – $5
Lunch Out – $12
Commute – $3
Dinner Out – $16

Total: $43

So I spent $43 just going about my daily life with ZERO effort, and I’ve managed not to spend $7 of my $50 a day, or 14%. Super easy savings. I didn’t really have to try. I got to do everything I wanted in my day. I didn’t have to budget. Everything just worked out.

In real life, it’s much harder to allot a fixed number to spend day by day like this since different things come up. Some days I go to a class, some days grab dinner with a friend, or I stay out late and take a car home. Some days I stay at home and do nothing at all and don’t spend a dime. Usually though, at the end of a month, I usually average out a certain daily amount that doesn’t get spent.

For me, this was about 15% of my salary. If I didn’t make any conscious effort to change any of my habits or behavior, I’d land at saving 15% of my salary pretty regularly. It’s actually frightening how quickly the rest of it disappears. I’d say yes to 3-4 after work/weekend events which would require dining out and an uber pool home. I’d say yes to more extravagant date night meals on the weekends.

This saving category usually comes easily to people who already have very frugal lifestyles or those who have relatively high salaries. Or if you’re lucky, both. Those who are able to have an amount leftover without thinking about it at all are fortunate, but the goods news is, this category of savings is literally only scratching the surface of possibilities.

The Moderate Savings

Moderate Savings = Reducing or cutting out low value expenses.

The moderately difficult savings is anything that falls into the category of spending that you can immediately recognize don’t bring you much value. What I mean by this is, you don’t gain enough additional value for the additional cost. For this category of spending, it’s pretty easy and obvious to determine cheaper replacements or just completely cutting it out of the budget. The moderately difficult part of it is figuring out what the line items are.

The dreaded word “sacrifice” that we associate with budgeting isn’t really a factor at all here. Moderate budget adjustments are things we’re happy to replace with a less expensive version because it never really mattered to us in the first place. There always seem to be random expenses like this.

Those extravagant weekend date nights? Well they weren’t super valuable to me, they were more in the category of “well, it seems fun, so why not?” And there are plenty of much cheaper date nights that fulfill that exact same purpose.

About a year ago, I was curious about buying the non-generic brand of certain items like Ziploc bags and sponges. Because some of these name brand products did end up working better, I stopped buying generic everything. It was really easy reverting back to generic brand items.

Let’s take a look again at our imaginary daily spending for a budget of $50 a day.

Let’s say I’ve been getting cappuccino’s everyday, but actually I like coffee just as much. Easy downgrade right there. And I’ve been getting breakfast on the go because I have no time in the morning, but a yogurt out of the fridge is just as good to me. Another easy cut. It’s like I was paying $5 for a breakfast sandwich that was only worth $1 to me. These replacements are just as good. In fact, they’re better because I get a higher ratio of value to money spent.

With those 2 things where I’ve traded something for a slightly less expensive equivalent, my daily budget is now at:

Commute – $3
Cappuccino  – $2.50
Breakfast Yogurt – $1
Lunch Out – $12
Commute – $3
Dinner Out – $16

Total: $37.50

Now I’m automatically saving $12.50, or 24% of my daily budget as opposed to the 14% before just by cutting out things that I realized don’t bring me much additional value for the additional cost.

The Hard Savings

Hard Savings = Reducing or cutting out high value expenses.

Optimizations for these high value expenses generally don’t lead to complete elimination, and they shouldn’t have to. The harder an expense is to cut, the more the expense is a near necessity in our minds. We view these expenses as necessities because spending the money for them provide such high value to our lives.

This category of saving is inching into the sacrifice territory. I consider it more the compromise territory. When it comes to expenses we really don’t want to cut out, I find it usually comes down to one or two major pros that come with paying for said expense.

The compromise of hard savings is reducing the expense to still gain the major pro you value while giving up the smaller positives that don’t bring as much value. 

What is the biggest factor that makes spending that money worth it to you?

I love eating lunch out on work days. Even if you personally think this is lazy behavior, these are my list of pros for doing so:

  1. Convenience
  2. Variety
  3. Freshness

But out of all the pros, the thing I care about most when it comes to eating lunch out is not spending each week night or Sunday night prepping lunch like I have in the past. When I first started eating out every day for lunch, I was paying about $8 for a vietnamese sandwich Monday-Thursday, and occasionally $12 for a vermicelli bowl.

Even though I loved eating that crunchy toasted banh mi bun every day, I wasn’t really eating out to relish eating toasted bread. I was eating out because I hadn’t prepared lunch the night before or over the weekend.

That led me to look for a more affordable lunch that was still relatively healthy, but one that was mainly, more affordable. Which led me to finding lunch at a pay by weight deli where my meal would come out to $5-$6 a day. I then discovered the same deli had a lunch deal, which is 50% off the hot food bar after 2:30. Every Monday, I head over to this deli and grab 4 days worth of food for $10-$12 ($2.50-$3/per meal) including steamed/pan fried veggies, fried rice, and beef or chicken.

By doing this simple thing, I reduced my weekly work day lunch budget from $32 to $12 a week. I still get the convenience of not having to prep my food beforehand. I no longer get the benefits of a crunchy bun or variety if I’m randomly craving something different. I also gave up the freshness factor because I can’t wait until 2:30 to eat lunch everyday so I get all the meals on Monday, but I’m ok with that.

If I apply even that one hard reduction to my example daily budget, I’d get:

Commute – $3
Cappuccino  – $2.50
Breakfast Yogurt – $1
Lunch Out – $3
Commute – $3
Dinner Out – $16

Total: $28.50

Easy Savings: $7 per day, 14%
Moderate Savings: $12.50 per day, 24%
Hard Savings: $21.50 per day, 43%

In my life, this category of savings is the one that really launched my savings rate higher. In this imaginary budget, I haven’t even compromised on dinner yet!

You Can Save!

If you want to start saving but feel you don’t have any capacity to or that it’s not possible, know that you have the power to! If you don’t have any easy savings, know you still have options for reducing expenses elsewhere because even saving a single dollar comes down to a choice. And we have power over that choice.

I’d love to hear what percentage of your savings requires no effort compared to what percentage is a conscious choice/effort! Do you find it restrictive, and if so how do you stick with it?

Jing is currently a software engineer based in Oakland, CA. She left her job in New York, moved to San Francisco unemployed, and more than doubled her salary in 4 months.

8 thoughts on “Saving Is Not Easier For Some People

  1. I may quibble with your premise a little bit. I do absolutely agree that the decision to save has to be operative for everyone for it to happen. But I can’t believe that it’s not easier for some people than others.

    As a natural saver, it has been much easier for me to be the impetus for saving in our marriage, but I also believe people can become savers. My husband willingly embraced the saving mindset many years ago even though he’d never needed to save growing up, and after a lot of compromise, we’re working well as a saving team now. We were both lucky enough to have jobs through almost all of the recession years when many people couldn’t get hired and privileged enough to have good enough health that we could work traditional jobs with traditional hours for as long as we had to in order to earn even more work-related privilege. (That is no longer the case for me so it underlines the privilege I once had.)

    And we have some friends who make seriously high incomes. For them, saving is ten times easier because they never have to make a choice based on limited income. Some of them make so much that they can easily save half their income while still buying the most expensive cars, traveling first class everywhere, and paying for all the amenities that are possible to buy. They save only by running out of reasons to spend! The sure don’t cut anything, so I’d argue that saving is definitely easier for them than me despite the fact that my will to save is very strong. 😀

    1. The sentiment that I really struggled to capture in the post was that the act of saving isn’t necessarily easier for some people just from the sheer fact they make more money, I’m definitely going to try and rework some more nuanced commentary in here. When articles emphasize how important saving is for everyone, there are some who think “yeah, it’s important, but it’s just not for me because I’m just not good at it or because I don’t have the means to do it”, and that’s really the response I’m trying to combat other than re-emphasizing how important savings are.

      What I worry about is low income readers thinking well why should I even save when there are people who are just naturally better at it (either want/need less or earn more)? My first 6 months in NYC, my annual salary during that time was below the poverty line (luckily, no kids or health issues) yet I was still spending my money on shoes, as long as it was a good deal! In the Millionaire Next Door, they call this “penny wise, pound foolish”. I love that.

      I had the thought at the time that was “well my friends obviously can save because they’re salaried making decent new grad salaries”! I’m surprised at my 22 year old self to have not thought “They can obviously save MORE because they’re salaried”. Instead I created a mental divide for myself that was like I can’t save at all. All it really would’ve taken to begin saving was the decision to do so and not spending money on what I wanted. The weirdest thing was, I even believed myself to be a natural saver, it was just the conditions were never “right”. As soon as I was salaried, I began saving immediately! I can’t know how the future would’ve turned out if the annual salary was much lower, but I truly believe looking back now, that it had to do with the job stability aspect much more (not the salary amount).

      I’m also curious about your definition of a natural saver because I do at the end of the day still believe I’m more of a natural saver but clearly my actions have shown there are times when I’m terrible with saving! I’m much more disciplined now, but I still need to exercise that discipline. But where does the discipline come from? Does it come from example from my parents who were very frugal? Does it come from financial literacy (understanding how important savings are?) Does it come from making enough money where I’m able to save? It’s an interesting discussion, I’d love to hear your thoughts!

      Other people who crossed my mind when writing this were those who make high incomes but completely live at the edge or past their means. They may have sunk a ton of money into an expensive house, multiple houses, etc they actually can’t afford and mentally perceive their needs to be higher than what their income can pay for.

      But I genuinely believe some high earners don’t see their spending as a choice. For high earners who are able to save even when they run out of things to spend money on, are they able to save enough to sustain their lifestyle if they were to lose their jobs? Continue mortgage payments, continue taking first class flights, and for how long would they be able to do so?

      Though I wouldn’t expect that those who suddenly incurred job loss would continue trying to live at the same level, but for every one person who would know to downgrade their lifestyle, I’d imagine there are a few or possibly many who wouldn’t even see that as an option. My ex boyfriend’s father inherited a textiles business and was bringing home a very high salary for a number of years. Unfortunately the company went bust, the high salary immediately stopped, they had non existent savings or investments, and the family couldn’t even afford to pay off their house to the point he and his sister had to take out personal loans to pay the bills on the house.

      Those living below the poverty line (with kids!) as well as those with expensive medical issues definitely crossed my mind as well on the other end of the spectrum, so maybe I need to add an aside or a more nuanced definition of what a natural saver is. This is the one scenario I really want and feel I need to define more.

      1. I initially had the same reaction as Revanche, but I do appreciate being forced to turn the idea on its head and think about it. It can be easy to have a defeatist attitude about a lot of adulting topics (good lord do I know that XD)

        It makes the most sense to me if thinking about savings relative to a person’s “resting state” savings, equivalent to the “easy savings” category. I’ve always been fairly good with money and have never been in a bad state financially. Before getting serious about FIRE goals, I only had “easy savings,” but my natural proclivities and tech salary put me in a good position. So overall quantity and percentage of savings were higher than the average person, but it was still only “easy” savings.

        I could see the argument that moderate or hard savings are as difficult to obtain for any person, mostly by design and self-defined terms. Everyone can benefit from really thinking about their spending choices, regardless of their financial steady state. ^_^

        But making $200k a year will continue to be way easier than making $20k a year… 😉

      2. Ah ha, that clarifies it much more for me, thanks! I think it’s hard to get at that nuance with the word “easier” because quantititively it IS easier for people who have high incomes to choose to save than it is for low income people for whom the pie is so small, their basic needs aren’t even covered.

        I was there once and it’s got nothing to do with savings being easier or harder, it’s literally impossible when all of your income is spoken for with rent, utilities, food and gas. For years I didn’t even have money to budget for clothes. So I had to find creative ways to make a little extra here and there to force savings to happen. Saving me in 2017 finds it 1000x easier than saving me in 2006 even though I put in tons of effort in 2006.

        My definition of a natural saver is someone who instinctively saves first without being told you need to, or without needing it to be easy. But that’s not the only definition!

        I was a money hoarder from the very beginning. If I hadn’t given my parents my red envelopes from when I was born til age 9, I would have invested it all and still have it today.

        For most people, I think they need to understand that saving is a choice and an action we all have to take, not just a natural thing that just happens if you’re good at choosing not to spend, like blue eyes or red hair. For others, especially those who are living incredibly close to the margins, they have to know that every single action and choice makes a difference. I learned this from other Twitter friends who aren’t money bloggers – they liked my #1GoodMoneyThing hashtag because it emphasized that even small actions matter and add up over time, and you can start anywhere with learning to do better with money.

        For all groups, I don’t think being a natural saver MATTERS, honestly!

        This comment is already too long so I won’t get into the high earner spenders 😀

  2. I recently read an article about how household with income less than half of the national average survive (That’s like RM3,000 which is about $700 dollars). All the families talk about buying cheaper food, mend clothes, scrapping to get by end of the month etc, but then..they all have cable tv and boardband bills! To me, it shows that you have to be willing to part with something in life to gain financial freedom.

    1. It is pretty incredible the level of spending inefficiency we all have despite income level! It’s almost like we have a psychological block where we think we’re sacrificing everything else for one thing (in this case, sacrificing better food, better clothes just for cable!)

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