To be clear I saved 50% of my GROSS income (not take home) and I survived. Heck, I think I even enjoyed it. If I can do it, so can you.  Saving Money in Los Angeles is difficult but not impossible.

While I will admit saving 50% of you income takes work and even a little sacrifice, I still had a pretty wonderful quality of life during this year of heavy duty saving.  I did a have a few things going my way to make this a bit easier on me, like starting with a  relatively low cost of living, and rising income.  Even taking this into account, I still had to be a bit savvy and downright frugal to get 50% saved.

The impetus for this saving goal was my desire to buy a house in a very specific Los Angeles neighborhood. I went into hyper savings mode to get a bigger down payment. Here are tips on how you can do it too.

Have your big fixed expenses in line with your income: 

I had a really great deal on rent at the time.  I lived in a nice apartment, but nothing super fancy.  With two bedrooms, and a roommate I was only spending about 10% of my income on housing.  I was mid 20’s and single, so no reason to live alone, so I got a roommate.  My roomie helped cut both my rent and utilities in half.  I realized most of you are going to be paying way more on housing than 10%, so you may need to look at other areas to find savings.

Before you think I was slumming it, this was still a nice building, but I did have to compromise a bit on location.  I wasn’t living right in the heart of West Hollywood, but I was paying $700-1000 less per month in rent.  INSTANT SAVINGS!  The lower rent helped offset the money I was throwing down the drain on my 5 Series BMW lease.  (The stupid things we do in our 20’s)

Take advantage of Tax Breaks: 

I put as much money as I could into my retirement accounts, and you should too. If you have a 401(k) or an IRA you can save money on taxes by contributing.  Essentially saving money into your retirement accounts makes it cheaper and easier to put the money away.  You might even get free money from your employer (either a match or profit sharing).  Think of that 401(k) as a way to make more money without working any harder, or getting a raise.

Get the things you want cheaper:

I personally don’t mind clipping coupons or shopping at a sale, but I know some of you can’t stand the idea. I know the restaurants around my office and save a few bucks a day with their rewards programs and coupons.  The food tastes the same with or without the coupon.  Also,  many retailers have online coupons that can easily save you 20% or more.  Why pay more than you need to.

Where I actually had to cut back: 

Again I was mid 20’s at the time, so I’m not going to even pretend I didn’t go out and have a good time with my friends.   But I did really have to watch my dining out (avoid those big expensive dinners with friends) and watch my spending on alcohol.  A few rounds of drinks can bust most of our budgets.  I did turn down a few vacations invitations that were a little elaborate for my tastes.

This doesn’t mean I wasn’t having fun, just spending less money.  I had tons of nights with friends over for pre-drinks, or dinner and movies.  Often just as much fun, without the big price tag. I still got quite a bit of traveling in thanks to crashing with friends, splitting hotel rooms, and booking some flights with miles.

You won’t need to save 50% most of the time, but you may be surprised at how much you can actually save to reach your goals if you put your mind to it.  I pinched pennies more than normal for a year, and I was able to close on a house in the neighborhood I wanted the following February.

Look at what you are saving now, and set a goal of what you want to save.  Be proactive and try and save 10% more than you are now. What do you have to lose?

DAVID RAE, CFP®, specializes in comprehensive financial planning for the friends of the LGBT community.  He is a regular contributor to the Advocate Magazine, Forbes.com and Huffington Post.  Los Angeles-based Wealth Manager with DRM Wealth Management. For more information visit his website, www.DavidRaeFP.com.

How the LGBT Community Can Retire Early and Fabulously