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How I Created a 5 Figure Savings on a Low Income

To some 5 figures is not considered a lot of money, but it is definitely a great start for someone who is making a lower yearly income.  In my case, it meant a fully funded emergency savings. For this post I’m going to recount how i was able to save 5 figures while living in poverty in an expensive city (Chicago). Stay tuned for some tips that that I incorporated when I first started my financial journey.

The incidents in this article are based on my experience, and serve for educational purposes. I am not a financial advisor, nor do the contents of this article constitute financial advice. Please consult with a finance professional for any advice when it comes to your money. For more information please read the full disclosure.

                                                      I built up my savings first.

(savings) a pile of dollars on a flat surface

When I moved out of my moms house, I owned one suitcase and $1200 from graduation gifts, and leftover research stipends. My internship manager connected me with a man who owned a shared house in Chinatown – a house where foreign exchange students come to live temporarily. One month of rent was 714 dollars for a private room and bathroom.

The rest of the utility expenses were covered by the man who owned the house, and this gave me a lot of room to save and gain footing. All that I needed to pay for was train fare (100$/month). The job that I had at the time was a startup – this means that there was a lot of free food that allowed me to forgo grocery shopping. (I’m not suggesting that you do this, but I was a broke college grad trying to survive).

Moving to this house made it so that I could save a little money from my first job until i had enough money for a direct deposit and first month rent at my own place. I saved up 2300 and then stayed with my ex boyfriend for a little over 2 weeks when I finally found my own place.

                                                  I lived grossly below my means.

hand placing money into a piggy bank

I was able to find a studio apartment for 880 dollars/month in an alright neighborhood, and I shoveled out 1200 for direct deposit and half of first months rent. All i needed was to furnish my new home. Places like goodwill and salvation army is where I went to gather second hand spoons, bowls, water bottles, etc. My total kitchenware bill was 20 dollars. However I really hit the jackpot with my dad.

He provided me with a free full sized mattress, and a second hand recliner seat as furniture. It was all that I needed for my 600 sq ft. place. All that was left to do was budget my life away. Here are the facts:

  • I was making $1250 semi monthly
  • Rent was $880
  • Student loan 1 minimal payment was $213
  • School loan 2 minimal was $185

That left me with a bottom line of -28 dollars!  Which doesn’t even include gas, electric and internet. And thus, the cyclical savings came into play. My total expenses came out to be upwards of 1400 dollars/month on a salary of 2500. I was left with around 1100 for the month. So I designated my first check of the month to bills and rent, while my second check was focused on saving and other expenses. 

                                           I prioritized paying myself (savings) first.

cup full of pennies with a plant growing from it

Whenever I received my non rent check, I put $600 into savings. This only left me with $450 for whatever may happen that month. (keep in mind that because the checks and savings were cyclical, I never had $450 at one time). It looked more like me stretching $225 dollars for two weeks until my next check came in. But here is the magic:

Because I had a budget, I felt secure in my situation. My savings was growing by more than half of $1000 per month, and I was able to eat, travel the city, and rest comfortably at night. 

There is nothing more fulfilling than being able to survive solely on your own. And I was 100% immersed in that. Did I have an abundance of pocket money? Nope. Was I able to be a social butterfly every weekend? Negative. 

But I had my own place, and I was in charge of my own finances and living situation.

I started to make a game out of putting money in savings every month. And would do calculations to see how much money I would have at this point in the year vs. that point. This allowed me to continue for exactly one year, and before you know it I had done the unthinkable:

$600 x 12 months = $7200.

I had a comfortable emergency fund.

But it didn’t stop there. I eventually met my fiancé and moved in with him. This allowed me to lower my expenses even more, and discover investing. Through investing I was able to make 500 dollars grow to 12 grand with a lucky upsurge in the market, (and an abundance of dividends). I eventually paid off my private student loan in full. The snowball literally kept growing as time went on!

These are the key factors that helped me survive that year on a very low income.

  • savings came first.

 I made it a point to stay put until I knew I had the money to make that jump.

  • living modestly was a priority

 Having the understanding that I was not trying to impress anyone was a plus. I needed to do this for myself if I wanted to survive.

 The budget provided me with peace of mind, because as long as you follow it, you will have enough money to survive.

  •  My expenses lowered when I met my fiancé and we moved in together.

I made it a point to pay myself first

 This is where growth happens. At the beginning of the month, I made it my mission to put money into saving quickly, so as to avoid wanting to spend the extra cash.

  •  When I found myself with a little extra, I threw it into the stock market, and put my money to work.

 Eventually I gained satisfaction watching my security grow.


Thank you all for taking the time to read my saving strategy for a lower income. What are some ways that you stay ahead of  your monthly expenses? Leave some feedback below, and I’ll see you in the next post! For other posts like this please see below for suggestions.

To keep tabs on my financial journey check out my instagram

This Post Has 10 Comments

  1. Thank you for sharing your experience – this is a great example of the importance of paying yourself first! 🙂

  2. Suraj


  3. Carolyn Miller

    Well done! Kudo’s to you for not buying into the rest of the American dream after being pressured into college and student debt.
    It really is a crime that personal finance is not a mandatory course in high school. If more people could just figure out a budget and live by it, there would be a whole lot more happier people. Debt = stress.

    1. bonitalynn

      Thanks so much! I honestly just accepted the fact that I simply couldn’t afford to haha

  4. Pansy Krauss

    Everything is very open with a really clear
    explanation of the challenges. It was truly informative.
    Your site is extremely helpful. Thank you for sharing!

    1. bonitalynn


      Thanks so much for reading, and for the nice words <3.

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