1. A reserve account used in order to quit your day job and figure out what you want to do next (e.g. travel) 2. The calculation of how much you spend each month multiplied by the number of months you'll need to survive without income. Tervooren 3. The amount of money you need to save in order to escape the cubicle and become location independent.
We all want to escape right? It doesn't matter if you're trying to escape a dead end job, a slave driver boss, or simply a mundane existence. But what's true for everyone is that we can't do that without saving up for an escape fund.
There are a lot of myths that surround the escape fund. Like the myth that you need an insane amount of money to hatch your escape or that it will take you ages to save up. Or that you need insanely rich parents who can bankroll your spending until you figure out what to do with your life. And the smallest but most vicious myth: I don't earn enough money to save up for an escape fund.
Everyone and I mean everyone can come up with an escape fund. Even shopaholic party girls like my sole sister Chichi. All it takes is a bit of sacrifice and a lot resourcefulness. So we've come up with 10 surefire ways for you to start saving money to fund your own escape.
Here are the first 5. Chichi's saving up (pun intended) for the rest of Part 2!
1. Pencil Pushing
The first step and probably as appealing as swallowing a frog in the morning. This entails writing all your daily expenses and keeping track of where your money goes. There were 2 things I had working against me on this one:
First, I abhor math and second, I hate routine.
But I pushed myself to record my expenses on a little notebook to figure out what areas I can cut back on. I realized that my budget mainly went to rent, transportation and food.
Taking a cab everyday to and from work cost me 200PHP (about $5). Not a lot. But if you multiply that by 20 days of work each month, that adds on to 4,000PHP! More than half my rent! I had to find a way to minimize this immediately. Which brings me to the next step:
In order to save on transportation costs, I had to look for a place much closer to work. The closer the better. And boy, did I get lucky! I found a place7 minutes away from work.On foot!
That meant I could eliminate that 4,000PHP cost completely and deposit that amount in full towards my escape fund! For those who don't have this alternative, consider moving in with a roommate or moving back with the parents. Just remember it's going to be temporary and will get you closer to your escape.
The 'frapuccinos' are symbolic here. It can be any of the usual luxuries that you enjoy but won't die from lack of. Case in point: Chichi loves her daily dose of Stabucks grande soy no-whip extra-hot Caramel Macchiatto. A grande only costs about 165PHP, not much really. But if you drink this everyday, like my caffeine-addicted sole sister, it adds up to a whole lot of moolah. Needless to say, someone missed out on her daily Starbucks habit for the past few months. Chichi has been subsisting on the free brewed coffee from the office vendo machine instead.
You may also need to say no to cigarettes, partying, weekly massages and pedicures. You don't have to eliminate them completely. The key is cutting back.
Sole Sisters, this is the toughest challenge yet. You have to stop shopping. And you have to do it cold turkey. No more cheap purchase excuses! Buying stuff just leads to the need for more stuff and more costs.
Case in point: You just bought a new bag. But you also need to get the shoes, the belt, the perfect outfit and accessories to match it. And to think it all just started with one purchase! If you seriously want to be one more peso closer to your escape, you have to stop buying stuff you don't need.
It's been really difficult for me to start saving at first. It got a little easier when I opened a separate bank account. That way, I saw money coming steadily and I knew exactly what it was for - my escape. But I really built momentum when Chichi and I decided to challenge each other.
Since we opened separate bank accounts, we would check each other passbook to see who was ahead of the game. We made bets as to who would have more money each month. Whenever she would want make a new purchase, I would have to keep her in check and remind her: The more we spend here, the less we get to spend elsewhere. She was also accountable for my spending. Whenever I would go on trips abroad, she would remind me to spend wisely and stick to my budget. It was fun for both of us because we're so competitive and enjoy friendly banter.
Have I encouraged you enough to start your own escape fund? If 1-5 of this guide is not enough, read tips 6-10 on part 2 of this series. If you have any tips you would like to share, please leave a comment below. We love sharing with you!