Monday, 8 February 2016

How I saved $130,000 in less than three years with under average salary


I consistently save 75% of my income year after year.

And, I have accumulated more than $130,000 on less than average income in three years.

How did I do it?
I use my budget planner (download for free here) to achieve it.

How does using my budget planner achieve constantly 75% saving of income every year.
In my free budget planner, I have listed almost all possible expenses. This tells you about your expenses, so that you know (really know know) your expenses - what are they, how much are they, and when are they due.

Once I knew all of my expenses (what are they & how much are they & when are they due), I knew what are necessary expenses and unnecessary expenses.
Then, I was able to eliminate all of my unnecessary expenses, and to reduce my necessary expense to its core.
This makes my financial to be lean.

What is a necessary expense and what is an unnecessary expense?
I asked myself, what is a necessary expense? What makes it necessary?
To answer the question, I must dig deeper into my soul than I initially thought.
I asked myself, what kind of life do I want? Why do I want to save money? What is my burning desire from saving my money? What am I willing to sacrifice for my burning desire to be realized - to be actualized?
And what do I need to keep on progressing in life - that cannot be sacrificed?
And finally, what are the necessary expenses (that must incur) to support the life that I want (and also the future life that I want to grow into)?

Picture it. Visualize your life and put as much detail as possible. Practise this and you will achieve your visualized burning desire.

I dug deep (soul searching) and I answered those questions. I also visualized my life to small details - how exactly my life is going to be doing all these changes. This step cannot be ignored. This step was the reason I stuck to my budget.

In answering what are my necessary expenses?
I decided, in order to achieve financial freedom, I must save as much as I can (within reason).
Therefore, my expense will only be:
  1. healthy food (without snacks - lollies, chocolate or chips),
  2. shelter (costs to put roof over my head),
  3. expenses that must incur to obtain income and
  4. sanity costs (some people do a little shopping, drinking, exercising, etc).

My only expenses - my only necessary expenses:
Food:
  1. Meat (Lean meat)
  2. Seafood (Fresh seafood) 2 serves a week
  3. Greens
Handy tip: Asian greens ($1 for 2-3 serves) were my lifesavers.
  1. Fruits: anything fresh and discounted or cheap.
  2. Breakfast: when on budget, the same as lunch and dinner.
  3. Snacks: office provided snacks - fruits, party pies, etc. No snacking at home, just drink tea if I feel bitey.

Shelter:
  1. Cleaning, repair, maintenance cost: I have more than enough cleaning appliances and cleaning solutions for home maintenance for another 2 years.

Expenses to obtain income:
  1. Transport to work. The cheapest possible (since I am now placed in an office 19km away from my home) is train. Click here on how I save on transport cost.
  2. If you use car to work, click here on how to save money on car.
  3. Clothes: I have more than enough clothes. Click here on shopping.

An example of my budget
This is real - I stuck to this budget for three years. And at the end of the three years, I accumulated $130,000, on a below average salary income.

FOOD

Meat
$10
per week



Seafood
$10
per week



Vegetables
$5
per week



Fruits
$10
per week




$35
per week
$140
per month
SHELTER

Gas
$30
per quarter



Hot Water
$75
per quarter



Water
$75
per quarter



Electricity
$75
per quarter



Mobile
$19
per month




$104
per month


Expenses to obtain income

Public Transport
$129
per month


Health

Private Health Insurance
$75
per month








Total expenses
$448
per month



I don’t spend any money on any other expenses. I only spend money on my necessary expenses, shown in the table above.

Those necessary expenses are reduced to its core. I have a very lean budget, I maximized all savings I can do.

Stick to your budget
This is difficult. But I stuck to my budget, with intense discipline and something else (Click here to find out on how to stick to your budget).

And, at the end of one year, after I realized on the amount of money that I actually I accumulated, it was an enormous sense of pride that I have with myself. I was extremely happy - I was elated.
I could buy a house, an investment house, which is something that will grow in value in leaps and bounds in the future (and something that can sustain itself - through smart rental incomes).

So in summary, how did I save 75% of my income using my budget planner?
In my free budget planner, I have listed almost all common expenses.
The purpose is just to know your expenses - what are they & how much are they & when are they due

Necessary expenses are the expenses that must incur to support the life that I want (and also the future life that I want to grow into).
And for me, I decided, in order to achieve financial freedom, I must save as much as I can (within reason).
Therefore, my expense will only be healthy food, shelter, expenses that must incur to obtain income and sanity costs.

Just eliminate all of them. Live financially lean. I stopped cold turkey. And it works.

To get your free budget planner click here.
I’m a great believer in luck,
and I find the harder I work the more I have of it.
Thomas Jefferson

Without continual growth and progress, such words as improvement, achievement, and success have no meaning.
Benjamin Franklin

A journey of a thousand miles must begin with a single step.
Lao Tzu

The future belongs to those who believe in the beauty of their dreams.
Eleanor Roosevelt.

Just do it.

Take a day at a time.
If it’s too hard, an hour at a time… a half hour at a time.

The snowball effect of feeling good (even if it is a half hour achievement) will propel you to continuously save.
But just do it.

©™ Kaizen Money Smartt
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