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- From a young age, my dad taught me to save 10% of any money I earned or was given.
- I followed his rule to the letter, and it helped me build an emergency fund with 6 months of expenses.
- Now I have money to travel when I want to and stay in beautiful hotels and Airbnbs.
When I was 13 years old, my dad took me to the bank for a big financial milestone: opening an account and getting a debit card. I had $100 in my wallet, largely in fives and ones, that I had saved from hours of babysitting and allowance. I flipped through the plastic pages full of debit card designs until I landed on a now-discontinued panda design. “This is it,” I thought as I held it up. “The beginning of adulthood.”
As much as my 13-year-old self wanted to spend all the money in my bank account on nail polish, frozen yogurt, and books, my dad’s financial advice was always in the back of my mind.
My dad taught me to always save 10%
During that time, my dad was my financial role model. He had the privilege of having a stable career, but he always lived below his means. He was never interested in buying the fanciest cars or staying in luxury hotels. Instead, he installed solar panels on his home, drove hybrid cars with great mileage, and committed to saving his income.
From a young age, he taught me to save 10% of every paycheck, allowance, or money I received, whether it was $50 or $500. I followed his advice and saved as much money as I could, often doing small things to save more, like eating at home as much as possible or waiting to buy clothing during major sales.
Fast forward to when I was in college, where I spent mornings and nights running between my jobs as a writing tutor, student leader, and journalist. I maxed out my working hours while being a full-time student making close to minimum wage and usually lived with three to five other people to keep my rent costs down, but I still spent at least 60% of my income on my rent in Seattle.
Even at that time, my dad’s advice rang in my ears. I continued to save 10% of each paycheck, often moving it after every pay period so I wouldn’t be tempted to spend it. It helped that I didn’t have a lot of space to spend money on knick knacks or clothes.
My savings habit served me well when I got my first higher-paying internship
During my junior year of college, I applied for an internship at a large tech company. In the days waiting for my recruiter to get back to me, I was too afraid to even look up how much I could get paid as an intern because I didn’t want to get my hopes up. All I had on the books was an unpaid summer internship at another company and the few hundred dollars I could make as a student journalist, not nearly enough to cover rent in Seattle.
Turns out that preparedness met opportunity, because I landed the internship and made seven times what I made working as a student.
It was tempting to buy all the things I couldn’t afford while working as a student. I could get coffee whenever I wanted, put all those Target beauty items in my cart if they caught my eye, or buy movie tickets for a friend with no questions asked. But every time I got paid, I promptly moved at least 10% to 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 would be out of sight, out of mind. The spending habit I had learned as a 13-year-old followed me into adulthood, enabling me to create sustainable savings.
I had an emergency fund when I needed it
As I prepared to work full-time, I started sorting out what my life would look like post-grad. The money I had from saving 10% every paycheck became my emergency fund to cover up to six months of living expenses if I ever lost my job, which was invaluable for my peace of mind when COVID-19, and the layoffs that accompanied, hit.
When allocating money for each part of my life, from living expenses to trips, I continued to set aside at least 10% of my paychecks for my 401(k) contribution and max out my employer match.
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I also set aside another 10% so I could travel the way I wanted and spend money on beautiful Airbnbs and hotels and fly out for my friends’ weddings and graduation celebrations without checking my bank account over and over. Money didn’t buy me happiness, but it gave me 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 13, but the way that I think about money remains the same. Saving 10% of every paycheck is a money habit that has enabled me to save for my future self and achieve my financial goals. What’s worked for me is finding a sustainable way to save that fits my lifestyle, goals, and spending habits, and adapting it as my income and values shift.