N181)How to save 50% percent of your income

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Saving half of your income may be more possible than you think. Some regular people have managed to do it, like Grant Sabatier: He went from having almost nothing to set a goal of retiring early and achieving it within five years.

Here are five tried-and-true strategies from Sabatier and other super-savers who have all, at one point, set aside at least half of their income to reach their financial goals.

Automate everything

In 2016, Chris Reining quit his IT job at age 37 with more than $1 million in the bank by living a modest lifestyle, saving and investing more than half his income, and putting his money to work. Reining, who’s been living comfortably off of his investments for the past three years, succeeded largely thanks to one simple habit, he tells CNBC Make It: automating his finances.

Putting your financial plan on autopilot means setting up your savings accounts, retirement funds, and debt-repayment plans to automatically draw money from your paycheck or checking account each month so that you never have to make the choice to spend or save those dollars.

It will not only help you build wealth, but it’ll save you time and mental energy, says Reining: “I automated my money years ago and the benefit is, I don’t have to make decisions about where my money should go, how much I should invest, what I can spend, do I have enough savings and so on.”

Track your spending

If you want to save big, it helps to know where your cash is going in the first place.

Many early retirees started their journey to financial independence by analyzing their spending habits and figuring out where they could cut back. “Knowing how you spend lets you determine whether you get value for your dollars — and where you might be able to focus efforts to reduce expenses further,” says Justin McCurry, who saved more than half his income to retire in his 30s with his wife.

Try tracking your purchases on your phone, in a spreadsheet, or in a notebook, or by using an app like Mint, You Need a Budget, or Personal Capital.

Reining also employs this strategy and has been tracking his income, spending, and investments in a spreadsheet since 2006, he tells CNBC Make It: “Once you start tracking this stuff and seeing it month to month and then year to year you really start to understand: ‘If I spend less, that means I’m saving and investing more. And if I’m saving and investing more, I’m going to be able to walk away sooner. I’m going to be able to have financial independence sooner because these numbers all work together.’”Trim your biggest expenses

Chances are, a significant chunk of your paycheck goes toward housing. If you can figure out a way to cut back on that cost, you’ll free up a lot of money that you can direct toward saving and investing.

“Live in the least expensive apartment that you can, get roommates, house hack, buy a two-bedroom apartment and rent out the other room to keep your housing expenses as low as possible,” says self-made millionaire and early retiree Grant Sabatier, who managed to save around 80% of what he brought in. “If you can cut your housing expense from $2,000 down to $600 or $700, all of the sudden, you’ve cut 10 or 15 years off the time that it will take you to retire.”

Keeping “the big three” expenses low — housing, food, and transportation — can make a big impact on your savings.

Boost your income

The more money you have coming in, the more you can set aside to save and invest.

“Go out and just try to make a little extra money,” Sabatier says. “You don’t have to go crazy, you don’t have to go out and make an extra $10,000 or more per month. But every $1,000 you make and invest instead, that’s going to cut literal months off the time that it will take you to retire.”Set a goal and monitor your progress

Tracking your net worth is the “No. 1 tool for real financial success,” says Richard Meadows, a millennial who managed to bank $100,000 in three years.

Meadows started saving about half of his income in 2013 and tracked his progress with a custom spreadsheet. “If you’re not measuring something, then you don’t have that feedback loop,” he says. “You don’t know whether you’re heading in the right direction.”

Sabatier relies on the same habit: “I look at my net worth every day when I wake up in the morning and have my morning coffee. There are few greater motivations than seeing this number rise over time, no matter where you start from.”

Whether you want to retire early, save up for a down payment or pay off debt, having a specific goal for your money will make it easier to save. A couple of years ago, I read stories about people achieving extremely high savings rates and assumed that it was something I could never do. At the time, I was only making around $25,000 a year at my first "real" job. 

With a lower income, the idea of saving half or more was daunting. In fact, saving more than a couple of dollars every paycheck was a challenge. But just four years later, I've boosted my income and am able to save more than 50% of my income each year. 

How much I save every year

My income has changed dramatically since my first real paycheck. In the last year, my husband and I brought in a combined total of just over $100,000. 

With his income as a grad student and my day job as a field biologist, you wouldn't think of us as high earners. And with our relatively modest lifestyle, you wouldn't think twice about your assumption. 

But our secret weapon is my side hustle. As a freelance writer, I've been able to boost our income dramatically. That extra money puts our income into the six figures. With that, it is much easier to save more than 50% of our income. 

Each year we have the goal of keeping our spending around the $35,000 mark. Last year, we went a bit over budget at around $40,000 thanks to the unexpected costs of our first year as homeowners. Even still, we were able to save more than 50% of our income. 

How I made this happen

So, how did I take my finances from barely getting by to saving over 50% of my income? It took big changes and conscientious lifestyle choices to get to this point. 

I increased my income through side-hustle opportunities

My main focus on this journey was to increase our income instead of taking frugality too far. I wasn't interested in trying to save half my income when I was only making $25,000 per year. At that point, spending only $12,500 per year seemed much too dramatic for my tastes. I don't think of myself as a big spender by any means, but even that was too far for me. 

I knew my best option was to increase my income. I decided to pursue freelance writing as a side hustle. Eventually, the side hustle turned into a full-blown career that allowed me to dramatically increase my income while paring down the hours I worked at my day job. 

The balance I've stuck allows me to bring in a healthy income while still spending some of my time doing a job I enjoy. 

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