Insider’s experts choose the best products and services to help you make informed decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.
- From a very young age, my father taught me to save 10% of the money I earned or received.
- I followed his rule to the letter, and it helped me build up an emergency fund with 6 months of expenses.
- Now I have money to travel whenever I want and stay in nice hotels and Airbnbs.
When I was 13, 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, mostly in five-and-ones, that I had saved from childcare hours and the allowance. I flipped through plastic pages full of debit card designs until I landed on a now-discontinued panda design. “That’s it,” I thought as I held it. “The beginning of adulthood.”
Even though my 13-year-old wanted to spend all the money in my bank account on nail polish, frozen yogurt, and books, my dad’s financial advice was still on my mind.
My dad taught me to always save 10%
During this time, my father was my financial role model. He was privileged to have 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 house, drove hybrid cars with high mileage, and pledged to save his income.
From an early age, he taught me to save 10% of every salary, allowance, or money I received, whether it was $50 or $500. I followed his advice and saved as much money as possible, often doing little things to save more, like eating at home as much as possible or waiting to buy clothes during big sales.
Fast forward to my college days, spending mornings and nights running between jobs as a writing teacher, student leader, and journalist. I maximized my work hours while being a full-time student, earning close to minimum wage, and generally living with three to five other people to keep my rent costs down, but I still spent at least 60% of my income for my rent in Seattle. .
Even then, my father’s advice rang in my ears. I continued to save 10% of each paycheck, often moving it after each 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 trinkets or clothes.
My savings habits served me well when I got my first higher-paying internship
During my freshman year of college, I applied for an internship at a large tech company. During the days of waiting for my recruiter to get back to me, I was too scared to look at how much I could get paid as an intern because I didn’t want to have any hope. All I had on the books was an unpaid summer internship at another company and the few hundred dollars I could earn as a student journalist, far from enough to cover rent in Seattle.
Turns out preparation met opportunity, because I landed the internship and earned seven times what I earned as a student.
It was tempting to buy all the things I couldn’t afford while working as a student. I could grab a 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 no questions asked. But every time I got paid, I quickly transferred at least 10% savings.
I was able to save 70% of what I earned that summer, largely by automatically transferring money before I could spend it so it was out of sight, out of my mind. The spending habit that I had acquired at the age of 13 followed me into adulthood, allowing me to create lasting savings.
I had an emergency fund when I needed it
As I prepared to work full time, I began to figure out what my life would be like after graduation. The money I had from saving 10% on every paycheck became my emergency fund to cover up to six months of living expenses if I ever lost my job, which was invaluable to my peace of mind. mind when COVID-19, and the layoffs that accompanied it, hit.
When allocating money for every part of my life, from living expenses to travel, I continued to set aside at least 10% of my paychecks for my 401(k) contribution and maximize the compensation from my employer.
Insider Featured Savings Accounts
1.90% APY (as of 09/15/2022)
On the website of American Express National Bank (Member FDIC)
I also set aside an extra 10% so I could travel the way I wanted and spend money on nice Airbnbs and hotels and fly to my friends’ weddings and graduation parties without checking my bank account again and again. Money didn’t buy me happiness, but it gave 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 I think about money remains the same. Saving 10% of every paycheck is a financial habit that has helped me save for my future and achieve my financial goals. What has 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 change.