The Real Truth About How I Save Half My Income

How I've managed to save half my income - and how you can too.

It’s one thing to set a goal to save half my income, but actually doing it is an entirely other story. Here’s a (brutally honest) look at exactly how I’ve managed to hit my savings goal over the past few months – because I’ve been consistently hitting it every month since October.

Well, OK, not in January, because January was bananas, but even then I hit a 48.5% savings rate, which is not what I’d call a failure by any means.

Related: Here’s How to Handle Not Hitting Your Money Goals

Anyways, it’s exciting, and awesome, and has been a huge giant boost to my savings goals and my timelines to hit those goals, which is why I did this whole thing in the first place.

Pro tip: It’s way easier to stick to a financial goal if you know why you’re doing it in the first place.

But I’ve also learned a lot from the year I spent not hitting my goal, and that experience helped me really pinpoint the one change that helped me consistently save half of my income.

It’s my income.

It’s not frugality, or that time I tried to make my own coffee using paper towels as filters (lol never do that) or getting rid of everything I love spending money on.

It’s definitely income.

I earn enough that 50% of my income is my comfortable spending point.

When you earn too little, it’s hard to push past a certain point without hating everything. There are so many articles – seriously, so many – that tout the benefits of having a roommate, and taking public transportation, and a zillion other frugal things. At some point, though, you can’t really frugal your way into a bonkers savings rate if your income isn’t high enough.

Don’t get me wrong, frugality and compromise on your expenses matter a lot, and both can be huge in terms of hitting your goals and living within your means. You’ll probably also want to be frugal while you’re rocking an entry-level salary, or launching a new business, just to make your monthly money situation work.

But there’s only so much you can cut out of your budget, and if you’re doing all of those things but hoping to upgrade to slightly nicer digs, or a bigger Starbucks budget, or ordering an app and a main once in a while?

That’s OK. I wanted those things too, so when my income went up, I got them.

In fact, I probably spend at least $800 more per month than I did a few years ago, because my expenses rose as I took on new commitments that I had been itching to take on, like a car and a dog and a house in the suburbs. (Yes, I’m boring af, but I like what I like.)

Those things happened when my income was high enough that I could comfortably afford them, and to this day I maintain that having laundry in my own house is way up there on my list of best-things-to-ever-happen.

It sounds like a classic case of lifestyle inflation, because it is.

But then, I got to a point where I was over-the-moon happy with my life. I love having a dog, and living with The Boyfriend in the suburbs, and my monthly budget is almost entirely on autopilot. I spend about the same amount, give or take $100, every month without even trying.

So as my income went up after that point – my comfortable spending point, a term coined by Our Next Life – so did my savings rate. I didn’t feel like I needed to spend more, so I just… didn’t. And trust me, there is a laundry list of things I intentionally don’t spend money on, like fancy clothes or going out to bars, because I’m just not about that life.

But at the end of the day, when it comes to maintaining a high savings rate, the real trick has been my salary. It’s enough to allow me to live the way I want and still save a big chunk of my income without feeling totally deprived.

That said, I had this salary before I started consistently hitting my savings goal, so it’s also not the whole story. Even with all of my planning and budget awareness, my comfortable spending point used to be around 60% of my income.

Enter, side hustles.

I have more than one stream of income.

The really big change in my ability to hit my savings rate came in October, when I consistently started earning money from my freelancing clients and my blog.

Yup, Half Banked makes a wee bit of money every month, and I write for some pretty amazing clients in the financial space on a freelance basis. (If you think we should be working together, check out the details here.)

I have a lot of Thoughts about side hustles, including the fact that I know I’m pretty lucky to be able to pursue one. I’m healthy, I’ve got oodles of formerly-free time to invest in my business, I’ve got one heck of a supportive partner who gives me tons of time and space to work, and I happen to love the work that I do.

That’s why I’m always careful when I think about pitching people on “just start a blog!” or “just monetize your skills!” It’s worked out for me, and I love it, but it’s a lot of work, and not all that easy or accessible for everyone.


It is 100% the reason I’m able to hit my savings rate goals. I’d be lying if I said it wasn’t, and my savings have not been funded by frugality alone. (Lol again, remember that time I tried to make coffee without a french press? Yeah, those days are over.)

It seems disingenuous to pretend that I’m not relying on my side hustle income to help fund the things I want to do, since I 100% am. I’ll probably end up talking more about it, if only because my knowledge of how freaking helpful it is will at some point trump my unease over recommending it to everyone, since I know it’s not always an option for people to take on that kind of commitment.

But if you can? It’s something you should strongly consider, and something I wish I had looked at more closely earlier.

I have very clear plans in place for my money.

Let me be so clear on this: earning more isn’t the only answer.

I’m so grateful for both my experiences starting my career on a low salary, and my experiences trying-and-failing to hit my money goals. Both of them forced me to take a hard look at my spending, cut back on certain categories of purchases, really look at which ones I value, and track my spending to make sure I kept myself accountable.

I know a lot of people who make more than I do, by a long shot. Some of them are amazing with their money, but some of them likely have less in savings than I do, or are wildly less careful with their money than I am.

It’s nothing against them, since no one is born knowing how to handle their money.

But whether you’re making $11 an hour, or $1000 an hour, it’s incredibly easy to let money slip away without really knowing where it went, or using it intentionally to do the things you want to do. In fact, I’d argue that’s pretty much the default money setting for a lot of us, given my personal experiences!

Having a plan for your money is so important, and it’s why my side hustle money hasn’t gone straight to PetSmart to upgrade all of my dog’s toys and gear. (You guys know how I feel about that dog.)

Nope, it’s (almost) all going to one of three places.

  • 25% goes into a savings account to pay taxes on it.
  • 20% goes into a savings account to fund investing back into Half Banked.
  • 50% goes to my highest-priority savings goal.
  • And yes, 5% stays in my account to fund my latte habit.

I figured out what that highest-priority goal was using the Bankroll Your Goals system, which you can find out more about right here. And in case you’re like ugh, this is just another PDF download, it’s also exactly what I used to rearrange my savings goals when I finished my house downpayment savings goal in January.

That’s right, I’ve got a new top savings goal!

That’s right, it’s top secret (just for now you guys, you know I can’t keep secrets to save my life.) But it’s getting funded like crazy, thanks to my side hustle, and I’ll be able to hit it in no time.

And yes, I spend less than I make.

This probably doesn’t even need to be said, because the title of the article was pretty clear that I spend about 50% less than I make in any given month.

But getting into this habit isn’t something new, and it’s definitely not something I’d want to be starting on my current income if I hadn’t had plenty of practice.

I started saving money automatically as soon as I had a steady paycheque, and while it wasn’t a ton of money, it was something. If you have dreams of quitting your job to travel the world, or buying a house, or taking a year off to have kids, then your very first step is to start spending less than you make, whatever that looks like for you.

You can start with as little money as you want – $10 a month? $20? – but here’s what I want you to do rightnow. Go set up an automatic contribution from your chequing account to one of your savings accounts for that amount of money, and have it come out of your account the next time you get paid. (If you’re self-employed, send the money to your savings right now instead!)

You can always pull the money back out if you end up needing it, but here’s the real magic: Once it’s in your savings account, and it’s in there to help you fund whatever your big dream is? You’ll probably do whatever you can to make sure it stays there. Over time, that monthly contribution will grow into something pretty impressive.

So how can you save half of your income?

Here’s the Cliff Notes, for those of you who might have skimmed to the end. I got you fam.

  • Figure out your comfortable spending point, ideally by tracking your spending. How much feels like “enough” to have the life you want? Stick to that spending level as your income rises.
  • If it’s an option for you, look into building other streams of income. They can be a huge boost to your savings, and help you hit your goals way faster – but they are a ton of work, so they might not be a fit for everyone.
  • Put a plan in place for any “extra” money that comes your way. Whether it’s a raise, or a bonus, or side hustle income, you should know how much of it is going to each one of your goals – and yes, that includes spending.
  • Start spending less than you make, even by an extra $20 or $50 a month. Save what you can by setting up automatic contributions, and if you don’t miss that amount, set up another one to save even more.

That’s really it. And yes, a lot of these things take time, and might not change overnight – but when I look back at the past year and a half, they really are the big things that got me to the point where I could save half of my income.

Do you have a lofty savings goal you’re working towards – and a big “why” behind why you’re saving the money? Tell me about it in the comments – and let me know what steps you’re taking to make it happen! You might just inspire someone else to do the same.

Desirae is on a mission to demystify and un-boring financial info for millennials, so that we can all save more money, spend on stuff that matters to us, and still have a latte or two along the way. Money is literally why we can have nice things, and Desirae is committed to helping make sure you know just enough to make the right calls for you. (She’s also committed to her expensive dog, her side hustle, and her retirement fund.)

56 Comments on “The Real Truth About How I Save Half My Income”

  1. Penny @ She Picks Up Pennies

    I wrote about this on my blog today, too. But not like this 😉

    That’s incredible that you’re so focused with percentages of what to do with the savings. I think I’m still hoping the money gods will sort that out for me. Love this, Des. You’re so inspiring!

    1. Desirae

      I looooove your take on it today Penny! I think that while it’s hard for a lot of us to detach our worth from our income (or, ahem, our savings rates) it’s so so so important for us to do.

      PS to everyone else: If you’re skimming the comments, go read Penny’s post ASAP!

  2. Robb Engen

    I love the truth bombs about how you’ve managed to get such a high savings rate. Don’t undersell the side-hustle, though. ANYONE can earn extra money on the side. My wife started making her own Kombucha (why?!?) and it turns out there’s even a market for Kombucha SCOBY, which is like a starter to get your first batch going. They sell for $35 online – who knew!

    The truth about making extra money on the side, whether it’s freelancing or renting out your basement, is that it’s a little uncomfortable and outside the norm, so most people just don’t want to go there.

    I guess my point is that you make it look easy because you’re good at it, you’re making it sound harder than it is because you don’t want to come off as a braggart, but truly anyone can hustle outside of their day job and that is a sure fire path to financial freedom.

    1. Desirae

      Robb! Thank you SO much – I’m blushing! And you know what, I love your take on it, because I think it’s so true. Sure, my personal type of earning side hustle money takes a bit of time and skill, but there are a zillion ways to build side businesses using your assets, your skills, or both.

      And you know what, as someone who frequents farmer’s markets, I am entirely not surprised at that price or the demand for Kombucha “starters” lol. That’s such a cool side hustle – have you covered it on the blog before? (If you did and I’m a jerk and missed it, I’m sorry, but that’s seriously so cool!)

  3. Kate

    Thank you for writing this post. Many bloggers make it seem so easy to save 50% of their income but there’s more to the story. I finally make a big enough income, along with a reduction in expenses, to be able to save that much but there was no way it would have been possible 10 years ago when my income was roughly half what it is now.

    And I would never expect other people to be able to do it, knowing there are huge differences in income, financial obligations, and life goals. The steps you have listed are a great way to head down the right path. It’s all about baby steps.

    1. Desirae

      Exactly! Do what you can, from where you are, and be proud of the effort you put in regardless of whether it’s managing to save five or fifty percent! I couldn’t agree more – thank you so much for the kind words Kate! (I also never would have been able to survive this savings rate even a few years ago!)

  4. Gwen @ Fiery Millennials

    I started out making $65k a year and struggled to find my footing with regards to saving. Now that I make roughly $12k more 3 years later, it’s a LOT easier to save more. Adding in side hustles like the blog and my stained glass hobby/hustle gives me even more wriggle room. (and also makes things difficult because have you SEEN how pretty some sheets of glass are?!? I just want to buy ALL OF THEM). Excellent post as always and I just wanted to make sure I’m totally on the same page with you 😛

    1. Desirae

      Lol girl, you are the bomb dot com, and even if I have no idea how to tell a pretty sheet of glass from an unpretty sheet of glass, I feel like I could say the same about marketing technology for the blog, so I get it! (Show me a gorgeously thought out and executed email campaign, and I am putty. Literal putty.) Cheers to epic savings rates, and not inflating our lifestyles TOO far!

  5. Stephanie

    Saving is really not rocket science, as you -sort of- point out, without saying it that way. That being said you forgot to mention that having a partner also helps you reach the 50% mark faster and more easily. I assume you share a few common expenses such as rent or groceries. If you had to pay 100% of all your expenses, it may take you more time to achieve this. And you are also debt free…if I am correct? That’s another big one.

    1. Desirae

      Oh definitely – and I’ve got a post I’ve been meaning to put up acknowledging all of the ways in which I am lucky / blessed / privileged, because there are really so many. I’m very grateful for all of the ways in which people and circumstance have gotten me to this point, including, you’re 100% right, sharing expenses with a partner and being debt-free!

  6. Chelsea @ Mama Fish Saves

    Thanks so much for sharing an honest view of the work it takes to save more. You can’t endlessly cut spending, especially when you have children or are taking care of aging parents. You do have to be focused on your spending but you also have to make sufficient income to save high percentages (40%-60%) and be able to commit significant time to side hustles. I know I wouldn’t be able to pursue my blog without the support of my husband and all the evenings he cooks and does the dishes so I can focus on writing!

    Congratulations on reaching your house downpayment savings goal!!

    1. Desirae

      Thank you so much Chelsea! And I totally agree, some times in life will just be more expensive than others – and having support is HUGE for me too! “What do you want to do tonight?” “Um…. blog.” The fact that this conversation goes over well is 100% not taken for granted, lol.

  7. NZ Muse

    I was saving about 40% when I started working but I was also side hustling and making a few extra grand a year that way. Much easier to save half on 50k than 30k or 80k vs 40k.

    I remember a few years back the Save 50% thing was A Thing but bloggers were counting debt repayment (incl mortgages) into that. Now I def ain’t saving 50% these days but if you were to count my mortgage repayments as savings? Then sure, hell yes.

    1. Desirae

      Lol when I buy a house, can I claim that as my 50%? I feel like I missed the boat / wasn’t around for that whole trend, but it seems… well, anyways. True confession: a big chunk of this savings effort is motivated by my desire to buy a place, and fund that life transition. It may mean that after buying, it drops back down to 40% for a while… which honestly, I’m OK with. But we’ll see how it goes, and I’ll keep you posted!

  8. Ms. Steward

    Thank you so, so much for writing this. We’re on the low-income spectrum in the financial blogger community. As I recently wrote, I just make $34,000 per year. I’m working a plan to fix that. In the meantime, one of my biggest pet peeves has been the belief that any old person can pursue FI if they just want it enough. It is one of those statements that is technically true, but not realistically true. I believe there is a certain minimum income you need to really make headway and not hate your life in the meantime. I don’t believe that as an excuse–we’re still frugal af–but because it helps me to not feel like a failure because we are so frugal yet still can’t seem to bank half our income.

    Moreover, I want a side hustle, and I have ideas for one, but as someone with a small child, right now a side hustle means choosing between time with my child or more $. I choose the former. It’s frustrating to read other places that constantly suggest a side hustle as the answer to all financial problems as if there’s no other claims on our time than money.

    So again, thanks so much.

    1. Revanche @ A Gai Shan Life

      “…but as someone with a small child, right now a side hustle means choosing between time with my child or more $.”

      This is totally me, too. I’m aware that I could be dedicating a little more time on one major side hustle but with a small child, I’m choosing to have the energy for zir, OR for the side hustle. It’s a zero sum game right now.

    2. Desirae

      YESSSSSSS oh my gosh thank you so much for commenting and sharing, because I read your post about your salary and LOVED IT. Every time someone makes a blanket statement about how anyone, on any income, can do anything, I die a little bit. I’m very lucky to be in this position, and I know that there will be times in my life when other priorities take centre stage (like when I have kids) and I don’t make earning money my main focus. In fact, a lot of my saving right now isn’t even for FI persay – blasphemy, I know! It’s honestly to give myself options and flexibility for when I’m not able to save quite as much due exactly to those competing priorities.

      Go enjoy the heck out of some kiddo snuggles and be SO proud of how intentional you are with your life AND your money!

  9. Revanche @ A Gai Shan Life

    This was one of THE reasons I worked so hard to climb the career ladder as fast as I could. As long as I was making the low end of the salary scale, I made less than $28,000 in my first post-college job, I was always going to be working double time just to break even. Once I got past the $60-80,000 range, it was suddenly more possible to save more, and more diligently, even despite the MANY draws on my income between my own household and supporting my aging, and one sick, parents.

    In this economy, a high earning job alone isn’t enough, so I’m always alert to other earning possibilities.

    1. Desirae

      Exactly – and honestly, my side hustle income makes me feel a little bit more secure since I know that one high-earning income stream could disappear anytime (I’ve been laid off before!) Knowing that I have other cashflow that could bolster my emergency fund makes me feel so much more secure, which is what I’m into when it comes to money.

  10. Piggy

    You are an inspiration to us all. Thank you for always being the voice of practicality and giving me motivation to keep increasing my income!

    1. Desirae

      YOU! You are so wonderful, thank you so much! Thank you for being the most hilarious and amazing blogger ever, and writing like a gd champion, always.

      Dear everyone reading these comments, you need to be reading Bitches Get Riches like, yesterday.

  11. Financial Panther

    That comfortable spending point is something I didn’t even think about, but it’s true. Once you get to around a certain level of income, you’re just basically pretty comfortable. I took a huge paycut last year and didn’t even miss a beat, simply because I’m at that comfortable spending point. And I’m not frugal by any means!

    The great thing with side hustling is that 100% of it can be saved if you want. It really can boost up that savings rate depending on how you think about it.

    1. Desirae

      Exactly on all counts! It’s great to know that if worst came to worst and my salary took a nosedive, I would be absolutely 100% OK with it and not have to eat ramen noodles forever (jk I love ramen noodles.)

  12. Brittney @ Britt & the Benjamins

    Love this, Des – I’m a super saver, too, and even when I got a promotion (and pay increase) this past year, my spending habits did not change. Actually, now that I’m putting more focus into my blog, I find that I’m spending less – no more trolling online shopping sites or going out for drinks when I’m bored!

    Keep it up and good luck on your new savings goal!

    1. Desirae

      Right?! That’s the best reason to start a blog, in my opinion – get really into it, and you’ll save a ton because you’ll have ZERO TIME.

      I mean uh… it’s all glamour. And sparkles.

  13. Bojana

    I love this post because it is precisely NOT about using paper towels for coffee filters and cutting out life so that you can retire early. There’s many different ways of having a side hustle and it looks like you’ve figured it out pretty well!

    1. Desirae

      Thank you so much Bojana! And omg yes: life is too short to make coffee without a french press. Luckily I figured this out before we broke our first french press, so I knew the replacement was well worth the money, haha.

  14. Jennifer Connolly

    Excellent article! This year we have finally started to get our crap together regarding money. Every year my husband got a raise we just spent more and now are regretting it. Such a waste!

    1. Desirae

      Thank you so much Jennifer – and better late than never! I’m sure you guys at the very least enjoyed the ability to spend more during those years (I was just talking about this and I think my biggest lifestyle inflation over the past two years has been the dog, and NO REGRETS! Lol)

  15. Haley

    I love love love your posts! They are so authentic and contain great information. Thank you!

    I’ve always been a saver and at 24 that looked like, “Throw everything into Betterment!” because I had 0 goals except going out on Saturday night. (Seriously, thank you younger Haley for saving just to save. You tha real MVP.)

    Now, I have 2 huge goals – a house downpayment and a wedding in 2018 (just got engaged what what!) Let me tell you, those are 2 enormous goals and it’s a little daunting. I’m about 2/3 of the way there on the house and starting from the bottom on the wedding thing. Wish me luck!

    Side hustles are a god-send. I would not have enough in my house goal were it not for my side hustle ( and clients – thank you dear clients! I completely echo the sentiment of people with kids. No way could I do this with children. It takes up all my spare time. Kids in the future, definitely yes, and then I guess that brings tons of other goals huh 😉

    (Also, just keepin it real, my best friend’s parents paid for her wedding and house and that jealousy monster is so so real but also I am a strong independent woman and I can do this!)

    1. Desirae

      Ahhhh Haley that is so exciting, congratulations on both goals! And omg I feel you so hard on the side hustle being the real MVP of housing – it’s the only reason I was able to stick to my timeline and hit my savings goals on the house front, and I feel like given everything I’ve seen about closing costs, and lawyer’s fees, and and and… let’s just say it’ll continue to be a much needed boost to my savings accounts, lol. And that’s WITHOUT adding a wedding into the mix!

      And you are such a strong independent woman! (Plus, when your parents / grandparents / relatives want to invite people you barely know, you can just lol and say no, since they’re not paying for it. Retaining decision making power is hella valuable, as I learned from watching close friends go through the parent-funded wedding process!)

  16. Stephen

    It’s nice that your comfortable spending is just about your goal! Great work on the side hustles too.

    One thing that you mentioned, how easy it is to spend the money, no matter what you earn is something I always find interesting. That lifestyle inflation can really get to you, especially if you’re a high income earner. It’s maybe even easier to lose track of your money if you’re earning a lot more. But what a problem to have! Ha!

    1. Desirae

      Haha right?! That’s why I’m so glad I started tracking before my income really rose, because it would be sooooo easy to let it slip away and still have no idea where all my money was going, lol.

  17. Mike

    Hi Desirae – really nice work! I’ve been meaning to get around to checking out more of your stuff, and I’m glad I’m starting with this post. You have a really wicked sense of self-awareness and humility, and a lot of people could take notes from you on those two things!

    I also love your overall perspective toward FI. There is a sense of “everything in moderation,” yet you still remain focused on the fundamentals of FI, like working up that savings rate! I really like your balance between those two elements.

    Keep up the great work. And as a French press user myself – keep that baby safe!!

    1. Desirae

      Thank you so much Mike! It’s definitely an “in moderation” stance, but I also know that money can give you a LOT of options, and I do love me some options, haha. (I also love the ability to stress-free replace my French press when it does hit the ground!)

  18. Kate @ Making it Rain

    Thank you so much for writing this, it honestly changed my week! I have been having a lot of frustration about this exact thing, without being able to quite articulate the what or why behind the frustration, and you really hit the nail on the head. I wrote a post a couple weeks back about working for a not-for-profit and how to manage the lower income that often comes with working in that sector. I am really struggling with that right now, and it gets a little tiring to keep hearing that you just need to do better, and you just need to save more, etc, etc. So thank you for keeping it real and talking about what an important part of the equation your friggin income is!

    1. Desirae

      Uuuuuugh it is so not ever a you need to do better thing! YOU WORK FOR A NOT-FOR-PROFIT! I sell software. We are making vastly different impacts on the world, you and I, lol. You should forever and always be so so so proud of the work you have chosen to do! Screw anyone who says differently, and be proud of the intentional choices you make with your money – no matter what the percentages come out to!

  19. Allea

    Yes, yes, yes. Perhaps my favorite article so far. You’re so clear and honest and I love it!

    My favorite line, “It sounds like a classic case of lifestyle inflation, because it is.”

    Daaaang, but the truth tho.

    Thankful for you, Des!

    1. Desirae

      Right back at you friend! Cannot even wait for the biggest hugs of LIFE at Fincon this year! (Travelling for self-funded conferences? Lifestyle inflation, and I am so here for it, lol.)

  20. Kurt

    I think you’re right that frugality is emphasized too much, relative to boosting income, in advice on meeting long-term saving goals. But one tidbit I enjoy pointing out in these sorts of discussions has to do with taxes: Uncle Sam hasn’t yet figured a way to tax cost savings. So an extra $1 saved translates to an additional $1 in your bank account, while an extra $1 earned translates to (depending on your tax bracket) an additional $0.70-$0.80 in your account. Still, the potential for adding income is, in theory, unlimited, while frugality does have its limits–even for we ultra-frugal-ers! 🙂

    1. Desirae

      Oh I love that, that’s a great point Kurt! I’m starting to feel this acutely with my side hustle on top of my full time job, haha. However, still happy about it!

  21. Kimberly @ 80/20 Your Finances

    I think in personal finance circles, the income part is often overlooked. But it is so much easier to save after the comfortable spending point when you make more than that amount. It’s why my first advice to everyone is to focus on the income and then on cutting expenses, or at least both at the same time. Don’t put the income part off until later because you’ll miss so many earning opportunities!

    And until Uncle Sam makes a 100% tax rate, you are still coming out ahead by making money!

    1. Desirae

      Hahahaha yes yes yes! And I’m so glad someone talked sense into me about salaries and earning potential earlier rather than later – I started my career at a low salary and it was really helpful for someone to clarify that I needed to change my anchoring point, haha.

  22. Aki

    It Wil be really great to see housing expense , saving , cash inflow , grocery everything split and see that saving part coming out.

    1. Desirae

      Hey Aki – I do this sometimes for my email list, but my percentages break out to about 50% savings, fun spending 15%, house spending 20%, food spending 5% and transportation spending about 5%. There’s a bit of variation in everything, so there’s 5% missing there, but that’s usually what it breaks out to!

  23. Mike

    Hi Desirae, great article! One thing I always get confused about with savings rates is whether you mean before or after tax income, and how you would classify EI and CPP? In Ontario, someone that had a $100,000 salary and a 50% savings rate goal would be living off of about $20,000 since their average tax rate would be ~26%. Then EI and CPP would take another $4-5k chunk. This isn’t overly important since everyone has their own goals for their circumstances but I’m curious about how you define a savings rate nonetheless.

    1. Desirae

      Oh gosh, great question! I always do after tax, because it’s the amount I actually *see* in my account. Plus, I am proud to be Canadian and support our social programs through my taxes… but I also don’t want to look TOO closely at how much I actually “spend” on them for fear of jeopardizing that strongly held belief, haha.

  24. Craig

    Great post. You touched on such an important point that for many low income earners having a 50% savings rate is just not possible. You have to work hard and smart and stick it out through it all to get your earnings to point that you can put 50% away, all whilst trying your best to be as frugal as you can. Thank you for the insight.

  25. Juan

    This is a very inspiring and motivational article. I won’t lie I also find it a little bit frustrating just based on my personal situation. In the end the decisions we make have consequences and we just need to learn so that we can improve. In our case we only have my income to cover all expenses. The wife stays with our 3 yr old and is now expecting our 2nd so that is pretty exciting. Our income is $200K+ and I wish I was in a position to save ~$100K but it is pretty challenging. I think we could have done a better job with our house situation in going for something smaller. Between mortgage, one car payment, daycare (2 days), and all other expenses is nearly impossible to save outside of maxing out my 401K, IRAs, HSA, investing ~ $400/m in taxable inv accounts and $300 in a 529. We also have a rental property and looking to getting a 2nd one but like I said I wish I could do more. A side hustle sounds awesome is just taking the time along with a plan of action and executing. Appreciate your article which is an on-going reminder to challenge the status-quo in my personal life

    1. Desirae

      It sounds like the status quo in your life is pretty amazing in the first place, Juan!! There aren’t many people who could support a growing family, pay a mortgage, afford a rental property and max out all of their tax advantaged accounts – seriously, you are rocking it. I’m so sorry that the article felt frustrating, because it was definitely meant to make people feel better about the choices they’ve made to suit their own life stage, and it sounds like you’re doing an amazing job of balancing all of those competing priorities! Give yourself a high five for me, for real.

  26. Jaymee @ Smart Woman

    You know I struggle with this “you should have more than one income stream” and I’m happy to see you write “…only if it’s possible for you and that it does take quite a bit of time and effort”.

    Right now, I feel that I make more than enough from my full-time career job and I’ve always felt like I’m spreading myself too thin when I try to pick up a side hustle just to diversify my income streams. I haven’t found a side hustle that amounts to anything significant and trying to focus on that takes time and attention away from my career job.

    I’m still always on the lookout for “other ways to make money” however I am accepting that (at least at this point in my life), I am satisfied with what I already have and I’m focused on gaining as much as I could from this until I’m ready to move on to something else. Sometimes when I read articles about having more than one income stream, I can’t help but feel ashamed that I’m not following that advice. So thank you for being upfront and straight about what it’s really like to have a successful side hustle and that it’s not for everyone!

    1. Desirae Odjick

      Oh man, and you have such a hardcore full time job too! I am so on board with you not side hustling, lol. Don’t EVER be ashamed that your “only” income stream is literally saving lives. You keep people alive AS A JOB and that’s bananas. I could not do what you do.

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