5 Crazy Things I’ve Done To Save $300,000 by Age 26

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This month I hit a huge milestone. I opened up my money tracking software Personal Capital, and after everything synced up– it spit out a number I sputtered over.

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My net worth according to Personal Capital

There have been a lot of changes in my life since I discovered the idea of financial independence three years ago. And no, in case you’re wondering, I didn’t receive an inheritance or win a lawsuit. In fact, on the outside my life looks pretty normal. For the most part.

I don’t always do things according to life’s script and so far that has worked out for me. After hitting this net worth milestone I thought I would reflect on some of the wackier ways I have saved money. Here are 5 crazy things I did to save like crazy in my twenties.

1. Sold My Car For More Than I Bought It For

Cars are a depreciating asset– we know that. If you take a new car and drive it off the lot, experts estimate that a new vehicle will lose 20% of its value in the first year, and 10% every year for the next 4 years after that. Today, buyers spend an average of $31,000 on a new car. Based on these depreciation rates, in 5 years it will be worth $16,272, or a loss of $14,728!

To avoid severe depreciation rates, I bought a used car. I wasn’t in a rush, so I did my research, cruised Craigslist, car enthusiast forums, and dealers in my area until I found a good deal. The MSRP for the car brand new in 2009 was $31,010. In late 2016, I found one listed for $12,000, a steal! I negotiated with the seller and brought the sticker price down to $10,700. With added costs of transporting the car, registering it, and flying out to inspect it, my total was $12,150.

Car$10,700
Shipping$900
Flights$250
Registration, Title, License plates$300

Total

$12,150

Two years later, I listed and sold the car for $13,200.

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My Craigslist listing of the car

I personally detailed the car, cleaned it, listed it, and held my own in negotiations. It might not be the largest profit, but with some diligent research, planning, and care, I made money even after driving the car around for two years.

2. Sleep In The Same Room As 15 Strangers While Traveling

Some might call it crazy– I call it cost-effective. Staying in hostels has saved me thousands of dollars over the years, and I have met some really cool people along the way.

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What a typical hostel bunking situation looks like

Hostels often range in price from $12-$30 per night. I usually stay in a dorm room, sometimes sharing with as many as 15 people. When I spend most of the day exploring, all I need at night is a bed to sleep in. I don’t need anything fancy– room service, plush bedding, or other amenities would be superfluous. This way, I get to talk to other travelers, stay in the center of the city, and stash away the extra cash.

3. Applied for Jobs Without The “Right” Degree

“Wait, how did you become a software engineer if you didn’t study it in school?”

I get this question all the time, and the truth is that it took grit and a lot of gumption. I taught myself how to code on the job, applied for positions even if I didn’t meet 100% of the qualifications, and attended numerous networking events.

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While many people were incredulous that I would even try to be a programmer without a CS degree, it seems that I am not alone in applying for jobs that don’t line up with my degree. In a survey from CareerBuilder, 32% of college grads said that they had never worked in a field related to their major (though to be fair, software engineering is at least tangentially related to my major of mechanical engineering).

Switching into software engineering was a huge boost to my salary, therefore boosting my savings rate. A high income undoubtedly is one of the biggest factors in being able to save so much money. While some called me crazy for attempting such a difficult field without much prior experience, the change of industries was critical to my income growth.

4. Job Hop Even When My Job Was Going Well

At my first job, I was promoted in my first six months in my role. I was getting raises without asking for them, and I was being sent abroad to do interesting work in other countries. Even so, after two years I started job hunting. Several of my coworkers stuck around because the job wasn’t that bad, and they would prefer to stick with the devil they knew rather than risk jumping into a worse situation.

However, I knew the market was hot for software developers, and in those two years I had gained valuable expertise in my field. Even with regular salary bumps, it would be impossible to catch up to the market rate.

It was time to hop.

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In fact, employees that stick around with their company for longer than two years end up earning 50% less on average. True to this trend, when I changed jobs I doubled my salary and ended up with an exciting project and engaged mentors, making it an amazing move for my career.

5. Ignore Conventional Spending Advice

When I started ‘adulting’ for real, I wanted to find out how much was reasonable to spend on housing and buying a car. I did what most people do: I Googled it.

Rules of thumb, like the 50/30/20 guideline where 50% of your spending should go towards needs, 30% on wants, and 20% on savings, give a nice starting point for some. However, once you are living comfortably you don’t need to spend more. If you let your spending scale with increased income, you are leaving savings on the table.

I ignore all rules of thumb when it comes to spending advice. To save an amount like $300,000, I didn’t increase my spending as my income increased. I found a comfortable level of spending and banked all extra income, raises, and bonuses.

I budget a fixed amount for each spending category. Thus, the percentages I currently spend on each category decreases every pay raise.

  • Right now, instead of spending 30% on rent, I spend 11%.
  • Compared to the suggested 10% on transportation, after selling my car I spend less than 1%.
  • Rather than the suggested 9-12% income going towards food, I currently spend 2%.

If my salary goes up, those percentages should go down, because I will be spending the same fixed amount.

Here is a chart from Personal Capital of my monthly cashflow comparing my income and my expenses:

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 My expenses are low compared to my income, meaning I save more.

For many people, even high earners, the green and orange bars are the same height. Using conventional rules of thumb it is easy to figure out ways to spend more– whether on a larger house, a nicer car, or higher quality gear. However, in order to save more, it is better to keep your spending consistent and save anything extra.

Conclusion

Those are 5 crazy things I’ve done in order to save $300,000. For more context, I wrote more about the history and process of saving money in my post about saving $200,000 by age 25. While some may shake their heads, I like to think there is a method to my madness.

What do you think?

Is this totally crazy?

Would you or have you done these things?

What is the craziest thing you have done to save money?

Share in the comments below!

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22 Comments

  1. Long time reader but first time commenter!

    A lot of people blindly follow what society told them to do without thinking about it. It looks like you took a different approach by doing your own research and mindfully deciding how you want to spend your money. So I applause that and would not call these choice crazy but rather data/goals driven 🙂

    As for us, we’ve definitely be ignoring a lot of the “conventional wisdom” since we ultimately sold all of our belongings, moved out of our apartment in San Francisco and packed 2 carryon bags each to become nomadic indefinitely – traveling the world slowly and are having the best time of our lives yet 🙂

    One of the best saving tip for us was to embrace minimalism. This totally reset our approach the spending money in the first place. We actually share much more on how we spend our money today in case you are interested: https://www.nomadnumbers.com/how-we-spend-our-money/

    And well done on your huge milestone! You are on such a great financial trajectory as such an early age!

    1. I love the idea of having everything you need in a carry-on. I just lived a semi-nomadic lifestyle for the last two months while moving, and when I got home to a bunch of my stuff I realized how little I missed it. Your adventure will be fun to follow 🙂

    1. Thank you! Sometimes it’s easy to get caught up in what the next thing should be instead of taking a moment to be proud.

  2. That’s amazing! You’ve done a great job by ignoring the conventional rules. More people need to do this when it comes to buying a home based on the max they can afford.

    1. That one is definitely tricky. It can be so tempting since it will be where you spend most of your time! But if you can anchor yourself lower and stay true to your priorities, it should be possible to find a home within your means. Or rent for that flexibility!

  3. Congrats! “Unconventional” is certainly a theme here, but that’s the only way to live an unconventional life. 🙂

    Also, I second the hosteling. I’ve done it over a few Europe trips and never had a bad experience. It was good in both groups or traveling alone, and you end up with a more unique set of memories.

    1. I’ve noticed you have some ‘unconventional’ choices of your own on your blog! 🙂

      I think at this point I have stayed in over 100 hostels and have had few bad experiences, probably similar to the ratio I would have if I were staying in hotels. I have so many fond memories!

  4. Congratulations on the milestone!

    What I see here is a consistent pattern of taking risks but backing it up with huge amounts of research and personal effort. I’m not at all surprised they pay off for you in a big way.

    1. Some might say a little too much research and effort 😀 I think it has paid off though, and the more you front-load work and effort, the less work you have to do later. Sometimes literally!

  5. years ago i was booted from my chemical lab analyst job and landed as an operator in a control room in our factory for a little while. i was asking something to one of the programmers and his response was a little arrogant for my taste. “it takes a 4 year degree in computer science to do this!” or something along those lines was what he said. the thought bubble above my head was saying “oh yeah? my bachelors is in chemistry and i’ll be i can learn your skills quicker than you can learn mine, if you can learn them at all.” i didn’t say it but was thinking it.

    did you make it to ny state yet? it’s starting to get nice out finally. the adirondacks are calling you.

    1. That is a really rude thing to say to someone! I think it’s more about the time you spend on the job learning than the 4 years of theoretical schooling, anyway.

      Yes, finally made it to NY state! It’s beautiful so far. Need to plan a weekend to go to the Adirondacks.

  6. Great article, thanks! Avoiding rules of thumb and common wisdom is great advice. If you follow common wisdom, you’ll have a common life. I feel that the more common a rule of thumb becomes, the more you should avoid it and think differently.

  7. I think that living frugally is often synonymous with minimizing ones impact on the planet and that is something I can get behind. To answer your question, I have not done anything really crazy to save money but I live where I don’t need to spend much on cooling or heating, live near to where I work (less than 5 minute commute), furnish my home with items purchased second hand rather than going to the store. Oh and of course fixing things, not replacing them.

    On a related topic I just read an amusing thread on Nextdoor where neighbors were one upping each other on how little toilet paper they use. Now that seems like a crazy way to save money!

  8. Great article! remind me of a lot of bad advice I ignored when I was younger with that uncertainty of “I hope I am doing the right thing” but my gut was right. I have never been a fan of all those recommended percentages people give on spending.
    Awesome job reaching 300k at your age!

    1. Thank you! Yes sometimes it can feel like you might be doing something wrong if you’re not doing what everyone else is doing. Often people don’t make the best financial decisions though.

  9. Wow, it sounds like you totally have your financial act together. Very impressive. 🙂 Hostel dorm rooms are cheap but pretty uncomfortable to say the least. I’ve been able to find stay in private rooms with private baths in super cheap locales like SE Asia for as low as 6-9 USD per night. I haven’t paid much attention to hostel rates since I don’t want to stay in them, but I think some of them even in SE Asia may be as expensive as some private rooms.

  10. I am intrigued by your content and commitment to savings. I have managed a large mortgage sales force for 30 years which is, essentially, the profession of analyzing spending and earning habits and predicting them for the purpose of lending money. I believe that early adulthood spending sets the stage for success and creates the necessary disciplines in “earnings spread” that lead to financial independence. I share your thoughts on auto buying and shared expenses. It is one of the easiest ways to create the spread and housing cost sharing is a large percentage of the young adult budget. I would love you have you as a guest in our NYC office sometime.

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