The Best Kept Secret to a High Savings Rate


If you ask most personal finance bloggers what the number one piece of advice is for obtaining financial independence they’ll likely tell you the sacred mantra of the early retirement community: spend less than you earn. Another way of saying this is: have a high savings rate. After all, the higher your savings rate, the sooner you reach financial independence.

But sometimes focusing on spending less than you earn can feel like voluntary deprivation.

It’s easy to get trapped in the mindset of constantly trying to reduce daily expenses in an attempt to increase your savings rate. It’s easy to fall for the idea that you must make a sacrifice in your lifestyle now in order to live the lifestyle you want many years from now when you’re financially independent. But I want to suggest a new way of thinking about the journey to financial independence:

Switch from thinking:

“What else can I sacrifice to reach F.I. sooner?”


“How can I do more of what I love right now?”

The answer to “What else can I sacrifice?” might be cutting your cable, lowering your phone bill, dining out less often, clipping coupons, and a myriad of other cost-cutting exercises. This does lead to a higher savings rate, but using this approach forces you to focus on what you can remove from your life to save money.

Instead, consider the question “How can I do more of what I love right now?” The answer to this might be: spend more time with family, more time doing hobbies and creative work you love, more time outdoors, more time being grateful for what you have. You’ll find that this approach forces you to focus on doing more of what you love on a daily basis. There is also a wonderful byproduct of this approach: You’ll likely find that the activities that truly make you happy don’t cost any money.

Both of these approaches lead to a high savings rate, but one focuses on “what can I take away from my current lifestyle?” while the other pinpoints “what can I do more of in my current lifestyle that makes me happy?” 

One approach enforces a mindset of removal while the other instills a mindset of increase. I like to think of the mindset of increase as intentional living.

The Beauty of Intentional Living

Deciding to live an intentional life – a life with purpose and meaning – isn’t a financial choice, but rather a lifestyle choice. It’s the conscious choice to place priority upon the things you truly love in life, whether it be family, working, creating, reading, writing, meditating, or whatever else. It’s the decision to constantly say no to activities and people that add no joy to your life.

Making the decision to live intentionally isn’t limited strictly to people pursuing financial independence either. It’s available to everyone. Even if you don’t give a shit about personal finance, saving, investing, or any other finance topic, it still makes sense for you to choose intentional living. The fact that this way of living just happens to have a high correlation with reduced expenses is an added bonus for those seeking financial independence.

Short-Term and Long-Term Tools

I like to think of financial independence as the ultimate tool for long-term freedom. Once you have it, you have freedom to say no (or yes) to virtually anything you want. But I consider intentional living to be the ultimate tool for short-term freedom. This tool is far easier to obtain than financial independence because you have the ability to obtain it now. Whether or not you’re confined to the 9-5 cubicle grind, or bogged down by debt, or simply in a poor financial situation, you always possess the ability to choose intentional living.

Of course there will be things that bring you genuine joy that cost money and that’s fine. Not everything in life that bring you true happiness is free. But you’ll find that as you begin to focus on intentional living more and more you’ll simply spend less. You’ll find joy and peace in people and activities that cost very little money.

I want to offer two practical pieces of advice on how to foster this mindset of intentional living:

1. Escape the never-ending comparison game

This is the number one piece of advice I can give you, not only to improve your financial situation but to give you a huge amount of freedom in life you might not have right now. If you never read another article on this blog, at least read what I’m about to say here:

Escape the comparison game.

The comparison game takes many forms: comparing yourself to others on social media, comparing your house size, car model, number of social media followers, education level, and even your marriage to that of others. I have learned that the fastest and most efficient way to lose joy is to compare yourself to those around you as much as possible.

I really want to emphasize this point, because it’s life changing.

Making purchases for the sake of impressing others is a never-ending process. There will always be someone who has a bigger, better, shinier new consumer item than you and the only way to compete with them is to buy, buy, buy.

But here’s something most people never realize in life: No one is monitoring your lifestyle as much as you think they are. Nobody is keeping tabs on your salary increases, or the square footage of your house or the year and model of your car. Not one person. No one has enough time in the day to monitor your life.

And yet it’s so easy to inflate your own significance in your head. You can make consumer purchases and buy things for the sake of impressing people but at the end of the day you are responsible for bearing the burden of the financial consequences of these purchases.

This might sound pessimistic but I think it’s freeing. When you realize there is no one to impress, no one monitoring every step you take, you give yourself the permission to make decisions that align with what you value and you spend only on things that bring value to your life. Letting go of the urge to constantly please others is one of the most effective ways to immediately gain more freedom and live intentionally.

2. Focus on your well-being

My next piece of advice to start living intentionally is to focus on your well-being.

What I mean by this is that you should strive to live a life based on what you value. You should seek to do work that interests you, pursue relationships that bring you joy, live in a location that makes you happy. 

You may think that the choices you make on a daily basis are based on your own thinking. You may think the lifestyle you lead right now is a result of your own decisions. But this isn’t always the case. It’s so easy to unconsciously be influenced by the opinions of parents, teachers, peers, marketers, social media. 

Your closest friends and family might have good intentions with their advice on how to live but just remember that their views are based on their own unique life experiences and what type of lifestyle has made them happy. Mimicking their lifestyle has no guarantee of making you happy. Don’t fall into the intellectual trap.

Focusing on living a lifestyle that brings you long-term happiness can be difficult when you’re swimming in a sea of eclectic opinions. Go to college. Don’t bother with college. Choose a STEM major. Choose a major that aligns with your passion. Invest in real estate. Don’t invest at all, it’s too risky. Live for the present. Save now, build your wealth and live off dividends later.

There is no shortage of advice people are willing to give you. This is why it’s so vital that you identify what makes you happy and intentionally choose to live in a way that aligns with your unique happiness.


When making the choice to embrace intentional living it’s helpful to remember:

There is no one to impress. There is no one to compete with. Your success is not dependent on your salary in comparison to others. Your happiness is not dependent on the size of your house or the year of your car. Your importance is not connected to your job title. Your impact on the world is not measured by your number of followers, subscribers, or page views. Your well-being is not predetermined by your parents, friends, or coworkers. No one knows what will bring you happiness as well as you do.

Choosing to live intentionally means constantly asking the question:

“How can I do more of what I love right now?”

You’ll find that answering this question leads to intentional living, which naturally leads to reduced spending.

I strongly suggest using free financial tools like Personal Capital to track your net worth, spending habits, and cash flow to help keep an eye on your money. The more you track your finances, the better you get at growing your wealth!

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Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

3 Replies to “The Best Kept Secret to a High Savings Rate”

  1. I love it. 🙂 Happiness = wealth–and not the other way around. I’ve found that by being happy with my appearance, happy with my possessions, and happy with my life, I’m not only more satisfied but able to save more moolah.

  2. This is a great question to ask. Awhile back I wanted to increase the amount of time I spent with my friends, without having to increase my spending much. I decided to host a weekly board game night, and it was a huge success. By adding this, I got to enjoy my friends more, and spend less money.
    Man, your escape the comparison game hit close to home for me today. I’m glad you said something about it, I needed to read it.

    1. I love the idea of inviting friends to your place instead of going out. What’s funny is I have been doing the same quite a lot lately and we all seem to enjoy being able to have real conversations with each other instead of yelling to be heard over the sound of music or crowds out in public/the bar scene.

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