Guest Post: I Saved A Year’s Worth Of Living Expenses While Earning $45,000 Per Year

Hi, all. Today I’m turning the floor over to Eva Santiago.

Eva has achieved something that most regular Americans cannot say they have. She has managed to save a full year’s worth of living expenses – rent, utilities, food, and other necessities – for herself and her daughter, while working a 9-5 job earning a modest salary of $45,000 annually.

What makes this an even bigger accomplishment is that she lives here in New York City, a place with one of the highest costs of living in the country.

I’ll let her tell her story:

Eva’s Story

A number of years ago, I was working at a job and living paycheck to paycheck. I lost this job, and had to live off of unemployment benefits for awhile. It was a period of tremendous financial stress, and was very frightening.

I made a promise to myself during this time. “Eva,” I said sternly, “you are never going to allow a situation like this to happen, ever again.”

Eventually, I got another job. It didn’t pay a lot. It still doesn’t. Slowly but surely, though, I took steps to make good on the promise I had made to myself.

After a year of focused effort and a lot of sacrifice, I had saved a total of $14,000. This covers rent for myself and my daughter, food, car upkeep and gas, utilities, phone, and miscellaneous daily living expenses for twelve full months.

Although I have this emergency fund built up now, I am still saving – because now it has become a habit and a way of life for me.

I have $7000 more saved, and am going to be sitting down with Eric next week to get started investing it into the stock market.

How did I do it?

Here are some steps that I took to accumulate my emergency fund. Remember – there’s a lot of sacrifice here. But the security I feel now is so, so worth it.

  • I stopped going out. Each time I went out with my friends, I’d spend close to $200. This is New York City – there’s no such thing as a cheap drink! Which leads me to:
  • I also eventually stopped drinking at home. This did wonders for my health. It also saved me $40 a week, which translates into $160 per month.
  • I stopped getting take out food and going to restaurants. This saved me a whopping $500 per month – and again, caused my health to improve!
  • I got rid of cable. Seriously – no one needs it! With an Internet connection, you can view almost any television show or event via streaming. Cancelling cable, and going Internet-only, caused my media bill to go from $200 down to $50.
  • Regarding my cell phone plan, I am grandfathered into a Verizon plan and only pay $40 per month for myself and my daughter. Obviously this doesn’t apply to everyone. Get the least expensive service that works the best. Eric uses Boost Mobile here in New York, and pays $60 per month. He says it works great.

It wasn’t easy to save a year’s worth of living expenses. But I’m so glad I did. If I were to lose my job tomorrow, I would have a cushion to draw from. The sense of safety and security I feel is worth all the effort and sacrifice it took to save the money.

And like I said, it’s become a habit that will stick with me for life.

I look forward to returning to this blog again and sharing my experience once I start investing!

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

Advertisements

Stop Spending Money!

Did you know that in America, we buy so much stuff it’s ridiculous?

I’m not talking about things we need like food, shelter, clothing, and our cellphones.  I’m talking about the money on crap we don’t need.  That figure is in the billions.

How do I know we spend money on crap?  Two statistics I just learned provide rock solid proof…

Exhibit A: There are more storage units in America then there are McDonalds, Starbucks and Subway combined.  That’s crazy!

Exhibit B: 30% of donated clothing still have the price tags on them.  That’s incredibly wasteful!

Get this: the average American could not come up with $400 in case of an emergency.

As far as retirement savings go, we are in serious trouble, because only a small percentage of people over 50 have anything saved for retirement.

In no way am I saying that you have to live a life of deprivation.  However…before the next purchase you make, ask yourself: do I really need this?

Until next time…

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)