Hopefully it does highlight why it’s so important for all of us to get into the habit of saving.
The good news is all this month we’re going to examine different stories and ways you can not only save money, but still have a life.
By looking at how other families manage their money, you can test them out and see which ones work best for you.
Which is why I’ve pulled this conversation I had with Matt of Distilled Dollar from the archive. He’s definitely someone I’d consider a super saver, but that wasn’t always the case.
As you’ll hear he and his now wife had over six-figures of student loan debt.
In our chat,
- Matt breaks down what motivated him to pursue financial independence and become a super saver
- how they approach their spending (it’s not a traditional budget)
- some hacks they do to keep their expenses low living in Chicago
Are you ready? Let’s get started!
It’s not your typical millennial money story.
Hope you enjoy!
If you’re looking additional ways to save half your income, please check out my interview Joe and Kathleen of Stacking Benjamins.
Resources to Boost Your Savings Rate
Want to start boosting your savings rate? Here are some resources to check out:
- Best Budget and Money Apps: Personal Capital, Tiller, Mint
- Automatic Saving: Qapital
- Free 401(k) Analysis: blooom
- 5 Days to $5K: It's my free weeklong course to show you how to find, save, and make extra money so you can dump debt and save more!
- 17 Money Saving Strategies We Used to Triple Our Savings Rate
- How We Went From Earning a Living to Building Wealth, Together
- 3 Money Tips to Best Afford Luxuries
- Millennial Money Minutes Podcast
Thank You to Our Sponsor Coastal!
Support for this podcast comes from Coastal Credit Union. If you’re living in the Raleigh Durham area and looking to bank better, come check out Coastal today!
We've been members for years and love their service and competitive rates on checking and savings accounts!
Rollover Your 401(k) Easily with Capitalize
We’re grateful for wonderful partners like Capitalize. Not only do they support the podcast, but they help make managing your money so much easier.
Did you know that it’s estimated that there are currently over 24 million “forgotten” 401(k) accounts? In fact, the average American changes jobs every 4 years.
And because of the Great Resignation, you or someone you know might be changing jobs even more
It’s an extreme case of out of sight and out of mind. Is your old 401(k) in there somewhere, left behind at a job you're no longer with?
One huge benefit with an IRA is you get to choose how your money is invested, not your old employer.
If you want to consolidate your old 401(k) and have more options with how you invest, it may be time to roll them over into an IRA.
With Capitalize, they handle the process from start-to-finish – for FREE. They handle the process from start-to-finish, and yes that includes calling the 401(k) provider on your behalf.
Find out how and get started today!
Getting Out of the Paycheck to Paycheck Cycle
Back in 2014 Matt and his now wife were carrying a ton of debt. He was 24 and she was 23 and between the of them, they had around $150,000 in student loan debt.
This huge amount of debt was affecting their relationship.
We were obviously heading in the wrong direction. I mean we wouldn't fight about money but there was this underlying current strife and turmoil associated with paying off our loans.
Matt – [2:05]
What's amazing is that they have gone from being deep in debt to becoming financially free.
They dumped all of their $150,000 of student loans in four years!
It wasn't an easy process, but it's doable.
Matt shared the strategies and tactics that pushed them to save 60% of their income.
Financial Freedom, Not Deprivation
No matter how you look at it, a 60% savings rate mean there is a serious drop in spending.
Now you might be thinking that this means you deprive yourselves of fun, but that's not the case.
Many times as you define clearly what you want (financial freedom), you begin to see that there are opportunities to dig deeper to still have fun without the needless expenses.
Here are some of their big money wins:
- Live tiny, save big. By skipping out on the extra bedroom and strategically hunting for a place that was close to work, they were able to save about $12,000/year.
- Skip the car. Tied to finding the place for them, by focusing on a location where walking was a viable option allowed them to dump the car and all of the associated expenses. That meant they could save over $8,000/year.
- Meal plan like a champ. Matt saves a ton of time and money with this one. Lunches out with coworkers can quickly add up. Matt thinks they easily save $5,000/year by cooking more at home.
- Seek low-cost entertainment. Eating out and going to the movies can be a fun and expensive way to relax. they now watch most of their movies at home and explore free events around Chicago when they want to have a night out together. They estimated about $300/year saved with just the movies at home switch.
So with these five changes, they saved over $25,000 a year! Do you see how focusing on big wins can speed up your timetable?
If you want more ideas on how you can save, I created a free course – 5 Days to $5K – that will take you step by step on having big wins without spending a ton of time. Most of my tips can be implemented in about 20 minutes.
Implementing Instead of Just Reading
Matt admits that it wasn't an issue of not understanding personal finance that was keeping them in this cycle of debt.
He estimates that at that point he had read over 100 personal finance books!
Those books made no difference until he started implementing them. As they started seeing those wins (some big, some small), they were encouraged to keep pushing on.
As you read some of the big wins they had, did any jump at you? Remember implementation is the key here.
I don't expect all of them to apply to you, but you two should be able to track out one or two of them and see how it goes.
You may not save as much as they did, but you can still have some huge wins under your belt (and extra cash in your wallet).
If you don't know where to start, my suggestion is to first be very aware of your money. do you two know exactly how much is coming in and going out?
There are some fantastic apps and more that will help you keep tabs on your money. some of my favorites out there include Tiller, Personal Capital, and Mint.
You can also review the Couple Money Toolkit for more ways you can slash your bills, grow your money, and invest wisely.
Support the Podcast!
If you enjoyed this episode and found it helpful, here are some ways to support it.
- Spread the word. If you have friends who could boost their savings, please share this episode with them on social media or just email the link!
- Leave a review. Every review helps! Please share your honest feedback on Apple Podcasts or Stitcher.
- Visit our Couple Money Toolkit for more info on available apps, tools, and services to master your money together.
- Become a Patron.
Special Thanks!
The music today was provided by various artists over at Audiio.
This episode was originally released January 2017. Shownotes and podcast have been updated Febraury 2022.
