Kali Hawlk

Helping Creatives Make More

Are You a Savvy Saver… or a Paranoid Penny Pincher?

My mother-in-law asked me a very simple question a few weeks ago that I had a hard time answering right away. She keeps up with my writing here and knows that we aim to save 40% of our income each month — at a minimum.

As I was preparing to quit my “safe” day job and take a leap into the uncertainties associated with self-employment, she pointed out that I really had more financial cushion that I thought I did. Considering that we don’t spend 40% of what we make, we could technically afford to take a hit on earnings from time to time and still be okay.

I got a little panicky. “I have to save that 40%. Even that isn’t enough!” Even as I said it, it felt silly. When did a couple in their twenties start feeling like almost half their income would not be enough to qualify them for financial success — or just financial responsibility?

If we put away 40% of our current income, we’d be financially independent in 20 years. That’s half, or less than half in some cases, of other people’s working lives. I’d be able to retire before I was 45.

But my mother-in-law knows both her son and who he married very well. She understands that we’re hard-working and we enjoy having a purpose. And we’ve already told her that the idea of not working at all doesn’t appeal to us; we just want to secure the financial freedom that would allow us to pursue work on that basis that it interested us.

So, in knowing all this, when I said a 40% savings rate wasn’t enough and that my biggest fear with working for myself wasn’t in failing at running a successful business, it was failing to save that much or more, she gave me a funny look and asked me that simple question that took me a few weeks to figure out:


When Is Your Savings Rate Good Enough?

I couldn’t immediately tell her why I was so scared of not meeting that 40% savings rate on a consistent basis. The more I thought about it, the more confused I got, and the more I started to question myself.

Not because I thought my initial reaction was wrong — I had seen what a lack of financial education, responsibility, and stability had done to people in the late 2000s — but because I wanted to know why, too. What was driving that reaction?

And why, when most people agreed that a 15% savings rate was good, did I feel like what we had been doing since we graduated college, saving 20%, 30%, and now 40% of our income, wasn’t good enough?

I started to suspect that for me, a “good enough” savings rate would be something that was realistically out of our reach until we increased our earnings. We’ve already done a great job of minimizing bills and expenses and we’re happy to do so. We like living with less stuff and more experiences, and we’d rather save money than spend it on things that other people have said matter. We spend in a way that aligns with our values, and that’s really satisfying.

Where I feel like we’ve struggled is in the earnings department. We both started out with lower salaries than what we might have earned had we graduated before the recession. We have done a fantastic job of bumping up our incomes whenever possible, and I’m proud of the fact that we really did make hard work pay off.

But we don’t make enough to have 20% of it cover expenses to free up something like 75% or 80% for savings every month. I would love to have the ability to do that — not to “retire” sooner, but to not have to worry so much about keeping up with earning a certain income for such a long period of time.

Understanding What I Was Really Afraid of with Finances

I realized that my drive to save wasn’t coming from a sense of, “oh, I have this goal and I’m running towards it,” but more from a fear that had me trying to get away from something else. I didn’t feel like a savvy saver. I was acting like a paranoid pinny pincher instead.

As a personal finance blogger, I hate to say this out loud because I feel like it’s somehow “wrong,” but I’m not really motivated so much by the idea of financial independence as I am by the idea of getting to a point financially that if my business fell through the floor and I could never find another job again, we’d be okay.

Maybe it’s all the same, but it sure feels different to me.

Different because my action was driven by an irrational fear, not anything positive or productive.

Is it realistic to think I could never earn an income again if my present one dried up? Again, I want to work. I want to be productive and useful; I enjoy earning a living and providing something of value to the world.

Especially now that I work for myself — and I absolutely love it — I can’t imagine just not working, not pulling in any sort of paycheck at all. So financially independence, from the standpoint of getting to quit working when I reach it, has zero appeal for me.

So do I really need to be that concerned with saving more and more and more right now while I’m not even 25?

Finding My Savvy Saver Balance

Don’t get me wrong. I’m not trying to make an argument against saving for myself, or any Millennial.

We do need to save. I wholeheartedly believe I need to and will continue to do so, because for the most part I am fortunate enough to make more money that I need to cover my living expenses. I even have a bit left over that I can use for experiences that mean the most to me.

The rest I am happy and eager to invest.

Yeah, I’d be lying if I said I wasn’t tempted from time to time to say, “screw it. Roth IRA, you can shove it! I’m livin’ it up while I still can!” And sure, I’ve thought about how many trips abroad I could take or beach vacations I could enjoy every single year if I didn’t save a dime.

But I know better. I do want financial security, and yes, financial independence eventually. And we’re right on track to secure that independence in less time than I’ve been alive so far. Which is really cool to realize and makes me excited — especially as if we can do it, I’d be willing to be almost every one of you could do it, too.

That being said, is there a rush to reach financial independence when all my other big goals always see me earning an income somewhere, some how?

There has to be a balance in here somewhere. Or at least, a little less of the paranoid pinny pincher syndrome. It’s not realistic to think that one day my ability to earn an income will just cease to exist without warning and I’ll never get it back.

Yes, I understand it’s possible. However, it’s not probable.

I’ve done a lot in a very short amount of time with nothing more than a willingness to learn, hustle, and bust my tail working hard. I’d rather think positive than live in fear of something going catastrophically wrong. I’d rather say, “imagine what I could do with decades of learning, hustle, and hard work!” than worry about what may or may not happen along the way.

As I’ve learned in transitioning to self-employment, there is rarely a worst-case scenario if you’re prepared to fight through your problems and tough times. There’s always a solution — or at least, we always have plans B-Z.

That’s the path I’m choosing. That’s how I’ll find my financial balance between living for today and saving for tomorrow.

We’ll keep saving that 40% — and we’ll keep working to increase that savings rate. But I won’t be paranoid about failing to do so when I’m currently managing it successfully.

Are your financial goals motivated by positivity or fear? How have you overcome some of your fears about finance?


  1. Interesting read.

    “The rest I am happy and eager to invest.”

    When you say “the rest” I believe you mean everything outside of your 40% savings rate. But I’m assuming you invest within your savings as well, right? Juuuust wondering. :)

    • By “the rest” I mean what’s left over after we handle all our expenses, fixed and flexible (so things like the mortgage AND things like groceries and gas), and a small amount that we set aside for discretionary income. We invest the rest — which works out to be 40% of our income. I say “savings,” but we already have an emergency fund and we have a fund that we’ll pull from for travel for the next 3-5 years. Everything that we “save” goes straight into investment accounts right now.

      Hope that clarifies things bit! :)

  2. I think I *feel* like a paranoid penny pincher, and that is probably apt to desrcibe what drives me. But as myincome has increased, realistically I am probably moving more into the savvy saver category. For me, FI is not a motivator, but reaching a comfortable level – having a dry and warm house to live in (bought, because the standard of rentals here is dire), a work-life balance, enough to eat well and travel – is.

    • I’m glad to know I’m not the only one who is majorly driven by FI. I felt bad admitting that, because so many other personal finance bloggers are solely focused on it as the only right way to go about dealing with your money. And it’s not like anyone is going to say, “no, given the choice I don’t want to be financially independent.” 😉 So I’m happy that you understood where I was coming from here, and know I can completely relate to your motivations as well!

  3. I think you hit the nail on the head when you say you saw what happened to people in the 2000s. The recession shook our society to the core and brought home a real understanding of a few things: we can’t always rely on investments or employer-sponsored retirement and we can’t always count on long-term employers (even in the most financially stable jobs). I know it was hard for me to watch seemingly stable adults face true financial fear for the first time.

    Also, you’re now doing the thing you’ve been dreaming of for so long – which raises the stakes. It’s one thing to strive for something and another to get it. Once we get it, we don’t want to have to turn back for anything. That could be where some of your fear comes from (and I know it’s where a lot of mine comes from too).

    All that being said, you guys are doing an amazing job! I wish I had been that financially minded in my early 20s. Saving 40% of your income is seriously fantastic and there’s no doubt that your earnings will go up as your star rises. I for one am pretty darn excited to watch it happen :).

  4. I understand when you talk about achieving FI, sometimes it might be great to have the freedom, but the financial security blanket might be just as important to many.

  5. I don’t think your fears are paranoid. I know several professionals that lost their jobs during the recession and haven’t been able to work in their field. They are now considered “damaged goods” because they’ve been out of the field for so long. The economy has changed over the last few years and it’s important to be prepared for the financial bumps that come along.

  6. 40% is amazing! Congrats! I can’t wait to put the money I’m putting to student loans into my savings account. I think I can be both a savvy saver and a paranoid penny pincher. I’m savvy in that I always automate and have separate savings accounts. I am paranoid when I spend $10 on something I don’t need, but that is convenient and I feel like I’m having a mini crisis. For me, it’s about spending on your values and I realize that I feel differently every time I spend money depending on what it’s for and my emotional attachment to it. I am also not motivated by FI that much, but a sense of accomplishment, and safety.

  7. Isn’t it funny how we sometimes need others to tell us how silly our worries are? My boyfriend isn’t *as* serious as I am in the saving department, but he also never really had the opportunity as he wasn’t making much, and his expenses were high. He always tells me I worry for no reason, because I have that cushion. But I always want more. I do know that my savings goals mostly come from a place of fear, because I saw my parents struggle with money for so long. Money was always tight, and nothing ever seemed to be enough as one emergency happened after the next. I also wasn’t making much out of college, so I wanted to start saving as much as I possibly could while I was still living at home. It’s not a great mentality to have, and rationally I know I probably have more than enough should something serious happen.

  8. I, too, fall into the paranoid penny pincher category. Perhaps I’m self-conscious about my average salary and feel like I need to be saving more than most (40-50% of my earnings). Also, I’ve seen my parents worry about retirement with well-paying jobs. I’m a hard worker, but I can’t work this hard forever. Also, working in the entertainment business, I have a constant fear of being laid off, so I want to be sure I’ve saved plenty and can take care of myself no matter what happens.

  9. Hello Kali,

    My financial goals are motivated by positive and I’m at the stage that I am a savvy saver. I am currently diversifying my investment, focusing more on saving and retirement. I am also trying to aim for FI, so I can do more traveling.

  10. I think at times it’s been both, sometimes at the same time. I still fear not making enough money each month and going back to a finically stressed out state. Maybe if I was able to save 40% of my pay each month on a consistent level I’d be OK, but I’m lucky if I can do 10%, so that is scary. At other times I feel OK and know that I have it within me to survive…but who wants to just survive. Again, I think it goes back to me depending on myself. I have nothing to fall back on, so it’s hard not be fearful…but right now I’m working on eliminating that stress as you know. :) We’ll see how it goes!

  11. I think I’m driven towards positive financial goal. Just like you, I would like to do the kind of job that I actually love later in the future and be location independent. In this way, I’m not too focused on being financial independent but rather on having more personal freedom if I can achieve my financial goals.

  12. Great stuff here, Kali. I do find myself motivated by the negative (mostly fear) at times, and that causes me to save more. And then some days I’m motivated by a positive idea, like getting all my time back and spending those precious hours with my family, instead of in front of a computer.

    This might be the wrong approach, but I’m happy to let my day to day emotions motivate me, be they positive or negative, so long as the results and my overall emotional state are what I want them to be.

  13. I love how self-reflective this post is, and also that your mother in law stumped you for weeks with just a simple 3 letter word. Haha. Keep up the good work on finding your balance!

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