3x your Savings in a Year

This is the inverse of my earlier post talking about doubling your income but holding back your expenses.

The short version: the more you avoid inflating your lifestyle as your income grows, the more exponential growth in savings you unlock.

Now, here’s one way you can do that now without increasing your income.

Remember the formula in the last post about doubling income but holding expenses?

  • If you take home 5k and your costs are 4k, you keep 1k in savings.
  • If you double income to 10k but keep expenses to 4k, you keep 6k in savings.
  • You may have 2x’d your income, but you have 6x’d your savings rate

This is about earning income, but expenses work the same way.

  • You take home 5k, but your costs are 4k.
  • You cut your expenses down to 2k a month instead.
  • You may have cut your expenses by 2, but you now have 3x’d your savings rate

Obviously if you had to pick one or the other, you should pick increasing your income.

While that may take time, cutting expenses is a much quicker process available to everyone.

Not to mention, imagine if you could do both.

Find Your Top 3 Expenses

For most people, that’s

  • Mortgage or Rent
  • Transportation
  • Food

Get Mint if you don’t have it already, or something to track your spending categories so you can see what yours are.

Neutralizing (or even Monetizing) Expenses

Housing is the biggest expense by far.

If you live in a HCOL area, and you’re early in your career, that may even be half of your income. The rule used to be keep it under a quarter of your take-home pay. It’s been relaxed in recent years to 1/3, thanks to a combination of both runaway inflation and a sluggish housing supply.

This is why I’m such a big advocate of buying and living in multiunits. If you can lease out the other units, either to long-term tenants or as AirBnBs, you essentially pay off your mortgage.

Even if you’re not profiting from it, if you’re breakeven you are still making bank in savings.

On average, housing is a quarter of everyone’s expenses.

In the scenario above where your starting point is 5k monthly income against 4k monthly expenses, you’ve brought down your 4k a month in expenses to 3k, and already doubled your monthly savings.


Everyone’s city and lifestyle is complicated, probably more so than even finding a multiunit to live in (which I acknowledge is not super easy, which is why I titled this post as a year to give you adequate time).

So here are ten ideas to spark your imagination on transport:

  1. Do not have a car note. It is better to buy a humble car with no monthly fee than a nicer one that saps your savings.
  2. Even if you can afford a nice car with no note, how expensive is it to insure?
  3. If you live nearby to where you work from, can you bike?
  4. If you can’t bike, what about a motorcycle? Cheaper gas and parking
  5. If it’s a commute, does your work sponsor a bus or train pass?
  6. Use a credit card like Amex which gives you monthly Uber credit
  7. If you don’t need your car on certain days of the week, rent it out on Turo
  8. Flying? Rent out your car with Avail and effectively get paid to park your car at the airport
  9. For any business travel you do in your vehicle, write down your miles meticulously. I did this on a whim last year and inadvertently saved myself $1000 on taxes just for one long road trip I did to meet a client and attend a conference.
  10. In fact, find a legitimate business activity on any trip you do. Better yet, for any business trip you take, tack on a couple of extra days for a mini vacation. The flights are already covered.

Be creative, and find opportunities. Love fishing and have a boat on the coast? Great. Can you let someone charter it once a month when you’re not using it? Could you even take them out yourself as a (fun) side business?

It’s all about creativity, which works best when you’re being creative around something unique to your lifestyle.

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