How I Went From Unemployed to Saving $30k+ Per Year
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Where It All Started
Back in 2015, I had just been laid off from my job as a business development manager for a small, construction startup, and I sat on the couch in my apartment the day after it happened to ponder what I was going to do next with my life. It was winter in Chicago, temperatures near zero degrees, snow on the ground, cold and dark days in my life (literally and figuratively). I seriously had no idea what I wanted to do next.
With a background in civil engineering and sales experience, luckily I had options, however, nothing sounded appealing to me. Go get a job with a large general contractor to slave away working 80 hour weeks as a project engineer, get another job in sales where I would be driving around the Midwest every week visiting customers to sell a boring product, or find something else that was equally unappealing. Either way, I would have to get my resume together, start applying to jobs and the process would probably take up to 2 months of waiting.
I made a decision that day to write down what I wanted out of life and work for the next few years to help me make my decision and not just take whatever came first. I wrote down three different lists to help me make a plan:
- What I enjoy doing
- What I don’t enjoy doing
- Ideal options based on the first two
Instead of just finding a job that gave me a paycheck, I was going to design my life in a way that I would find most fulfilling. Here is what I wrote down for those lists:
- What I enjoy doing: Being outside, being with interesting people, traveling, working with innovative ideas or products
- What I don’t enjoy doing: sitting in a office all day, working on repetitive tasks, toxic office culture
- Ideal option based on the first two: selling an innovative product or service while living in another country that didn’t involve a lot office time.
It wasn’t long after that where I made a big decision. The time was right, and I was going to make a big move to Sydney, Australia. That would take care of the “living in another country part” and the job part I would figure out later.
My life was flipped upside down
The Tipping Point and POA (Plan of Action)
In the few months before I moved to Sydney, I was just scrapping by financially. Without a job and paycheck, I was collecting unemployment benefits and working as many hours a week as I could as a math and science tutor for high school and college students using Varsity Tutors. Looking back, this was a crucial time for me during my financial common sense development because I learned to be strategic with money.
Because I wasn’t making much at the time, I had to become VERY frugal. I walked or took public transit everywhere, cooked almost every meal at home (even choosing to eat before going out to meet friends), didn’t buy anything new and actually started selling certain items because I wouldn’t need them once I moved.
It was during this time of low income that I learned that I could be perfectly happy and get by. I was actually happier during this time than when I was working at a full time job earning way more money.
During the few months before I moved to Sydney, a former employer reached out to me after seeing I was no longer employed on LinkedIn. They asked if I would be interested in coming back to work for them, they told me they had a job opening in Sydney and the rest was history. It’s funny how things tend to work out once you make a decision to take a risk.
How I Saved $30k Per Year
Once I moved to Sydney and got a full-time job again, my income was now back up to what I was used to. My employer adjusted my pay to account for Sydney’s high cost of living, I was being paid incentive pay as I was working in sales, and Australia requires employers to pay 9.5% of your salary into a retirement account, so things were looking pretty good. However, I didn’t forget my habits and lessons from being unemployed. My income went up, but I actually kept my spending habits from when I was unemployed.
I decided that I could probably save a lot of money if I kept my low spending habits and took advantage of my higher income. So I decided to challenge myself to save as much as possible. So here is the breakdown of how I saved $30,000 during my first year living in Sydney:
- I decided to save 30% of my paycheck each month using this budget strategy
- On payday, I immediately moved 30% of my paycheck into my savings account
- When I received my end-of-year bonus, that also immediately went into my savings account. No rewarding myself with a big purchase or trip
- I looked ahead at the whole year and made a cash-flow analysis using Personal Capital. How much would be coming in (salary, bonus, retirement contribution, tax return) and what would be going out (monthly expenses, flights back to the U.S. to visit friends/family, trips around Australia)
- Tracked my spending daily to make sure I didn’t go over my budget (70% of my salary)
- Like I said, I remained frugal. I didn’t buy any new clothes or electronics, mostly cooked at home and enjoyed time outside for entertainment.
From this, I learned that the key to saving big is deciding:
- That it’s a priority
- Maintain habits that will enable you to reach your goal
It took an unfortunate experience to teach me the habits I needed to learn about budgeting and saving, and also to push me to one of the most rewarding experiences of my life, living and working overseas. Sometimes it takes an unfortunate experience to shake up your life, and unfortunately all you can do is choose how to respond to it. Do you use it as an opportunity to take a life-changing chance, or do you shrink back and decide you don’t deserve to get the most out of life? Looking back, I couldn’t be happier that I was laid off from that job back in 2015 as it propelled me forward to changing my life for the better.
Have you learned any great lessons from unfortunate experiences? Leave a comment or send me an email!