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- From a young age, my father taught me to save 10% of any money I earned or earned.
- I followed his rule to the letter, and it helped me set up an emergency fund with 6 months of expenses.
- Now I have money to travel when I want to stay in nice hotels and Airbnbs.
When I was 13, my father took me to the bank on a major financial achievement: opening an account and getting a debit card. I had $100 in my wallet, mostly in fives and boys, that I had saved from childcare hours and benefits. I flipped the plastic pages full of discount card designs until I got to Panda Design Stop Now. “This is it,” I thought as I lifted him up. The beginning of puberty.
As much as my 13-year-old wanted to spend all the money in my bank account on nail polish, frozen yogurt, and books, my dad’s financial advice was always on my mind.
My dad taught me to always save 10%.
During that time, my parents were my financial role models. He had the privilege of having a stable career, but always lived below his means. He was never interested in buying the most luxurious cars or staying in luxury hotels. Instead, he installed solar panels in his home, drove long-haul hybrids, and committed to saving his income.
From a young age, he taught me to save 10% of every salary, allowance, or money I received, whether it was $50 or $500. I followed his advice and saved as much money as possible, often doing small things to save more, like eating at home as much as possible or waiting to buy clothes during the big sale.
Fast forward to when I was in college, spending mornings and nights between my jobs as a writing teacher, student leader, and journalist. I’ve maxed out my hours while being a full-time student near minimum wage and usually live with three to five other people to keep rental costs low, but I still spend at least 60% of my income on my Seattle rent.
Even then, my father’s advice ringed in my ear. I kept saving 10% of each paycheck, often transferring it after each pay period so I wouldn’t be tempted to spend it. It helped me that I didn’t have much room to spend money on talent or clothes.
The habit of saving served me well when I got my first higher paying internship
During my freshman year of college, I applied for an internship at a large tech company. On the days when the recruiter waited to come back to me, I was too afraid to look up how much I could get as an apprentice because I didn’t want to get my hopes up. All I have on the books is an unpaid summer internship at another company and the hundreds of dollars I can make as a student journalist, which isn’t enough to cover the rent in Seattle.
Preparedness turned out to have a chance, because I got my internship and made seven times what I made as a student.
It was tempting to buy all the things I couldn’t afford while working as a student. I can have coffee whenever I want, put all the targeted beauty items in my cart if it catches my eye, or buy movie tickets for a friend with no questions asked. But every time I got paid, I immediately moved at least 10% into savings.
I was able to save 70% of what I made that summer, largely by automatically transferring money before I could spend it so it was out of my sight, out of my mind. The spending habit I learned when I was thirteen followed me into adulthood, enabling me to be creative sustainable savings.
I had an emergency fund when I needed it
When I was ready to work full time, I began to define what my life would be like after graduation. The money I got from saving 10% of every salary became mine emergency fund To cover up to six months of living expenses if I lose my job, which was invaluable for my peace of mind when COVID-19 occurred, and the layoffs that accompanied it.
When allocating money to every part of my life, from living expenses to trips, I continued to allocate at least 10% of my salary to my 401(k) contribution and the maximum employer match.
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I also set aside another 10% so that I can travel the way I want, spend money on Airbnbs and beautiful hotels, travel to weddings and graduations for my friends without checking my bank account over and over again. Money didn’t buy me happiness, but it gave me peace of mind and the ability to spend according to my values.
A lot has changed since I got my first debit card at age 13, but the way I think about money is still the same. Saving 10% of each salary is a financial habit that has enabled me to save for myself in the future and achieve my financial goals. What has worked for me is finding a sustainable way to save that fits my lifestyle, goals and spending habits, and adapts them as my incomes and values change.