A few years ago (yes, I’ve been blogging for a long time now), I wrote a post entitled, ‘Save Now, While You Can’. The article was all about how as young professionals, either single or DINK (dual income, no kids), we really don’t have a ton of financial responsibilities tying us down. We may not have a large mortgage payment yet, we aren’t worried about saving for a kid’s college or buying diapers. As such, we typically have a fair amount of disposable income for which we spend on: travel, going out, eating out, new clothes or toys, etc. The post talked about how while spending on yourself and enjoying your money is smart, it’s important to start saving money early on – and if you can, save a lot of it, because it’ll never be that easy for you! Fast forward a few years and I’m married, have a house and a kid! I thought it’d be cool to reflect and see how I’m doing now with my savings rate.

What I was doing

While I could, I was saving 33% of my income. Yes that’s quite aggressive, but I knew it wouldn’t be forever so I did it while I could! I did 9% to retirement (and get a 6% match), 10% to employee stock purchase program then about 14% to general savings. What makes doing this is a little easier is the fact that the 19% for retirement and ESPP comes out pre-paycheck, which means I don’t really feel as much like I’m missing it. My normal is what I get paid so if it’s not something I do after I get paid, it doesn’t really bother me as much. 

Saving 33% for a number of years wasn’t easy at first, and really never got easy but I kept at it. I knew that one day I’d have to cut back as my financial obligations increased but until then, I would stay the course! I really believe that saving so much for a long time has helped me out tremendously in the long run. I track my overall balances, or ‘net worth’ monthly and it’s cool to see the balances grow over time. It’s cool to see my retirement and savings accounts compounding, meaning earning interest or dividends that get reinvested back into the accounts, helping them grow more. 

It feels nice having a well stocked safety net (emergency fund), a great retirement balance that I’m on track with and money in savings for some bigger goals that Mrs. Money and I have (paying for cars and grad school). It wasn’t always easy, but I think it’s really paid off! 

What’s changed

For many of us, when our incomes grow, so does our lifestyle. I wish I could say that’s not the case for me, but I’d be lying! And I don’t necessarily think it’s completely a bad thing. Each time I get a raise, I try to save 50% of that raise and then I add the 50% to my general budget. For a while I was using that save/investing to increase my retirement contributions, with the goal of reaching 15%. My current job offers a 6% match (very generous) so I only am saving 9% of my salary right now. Any future raises (fingers crossed) will likely go to either my ESPP to purchase more company stock, or my general saving/investing bucket. (Have you read my post on: Short/Medium/Long term investments?). Then with the rest of my raise, I do put that money towards fun or general living. 

The addition of BabyMoneyFinance has brought a number of increased expenses to our family. I will start off by saying we’ve been blessed by the generosity of our friends and family with gifts of practical things we need. I was thrown a diaper party which filled our closet full of diapers. Mrs. Money had a baby shower and received many wonderful gifts. We’ve also gotten a number of hand-me-downs, which has been great. Mrs. Money (shout out to her) has stalked Facebook marketplace and has gotten a number of things we need for cheap, or free. Aside from all that, having a kid isn’t cheap! Lots of things to buy, and it seems to only continue as they get older. Healthcare is more expensive too, with the addition of another family member on our insurance plan, and lots of doctor’s visits during the first year. I also started saving for BabyMoneyFinance’s college fund via a 529 plan. Daycare has started as well as Mrs. Money goes back to work. We also upgraded houses to something a little bigger, and so more of a mortgage payment to pay each month. 

A lot of new expenses have come our way in the past few years! 

Where I’m at now (and why it’s ok)

I’m still saving for retirement and contributing to the ESPP plan, which brings me to 19% of my income being saved/invested. The 14% I was saving in savings or a brokerage account has really taken a hit. I probably budget now to save 10%, and probably end up saving about 5% each month. I always like to set savings goals a bit higher, and if I don’t meet them it’s not the end of the world. So, all in all I’m probably still at 25%, which ironically enough is what I recommended in my article the 75% rule.

I always knew that saving so much wasn’t totally sustainable and that I’d have to cut back one day. That day has come and I feel like we prepared for it. I’m really thankful to have been able to save a fair amount for several years, and I’m a lot more confident in our future financial success. At the end of the day, saving 25% is still pretty great too!

No matter where you are in life, always challenge and push yourself when it comes to your savings. If you meet your goal, great! If not, hopefully you partially met your goal. Know that change is one of the few constants in life, and learn to be ok with it! Be realistic and realize that over time your savings rate may fluctuate. The most important thing is that you’re always saving and investing, whether that amount is small or large!