Give Me Back My Five Bucks

It’s not how much you make, it’s how much you save

2013-05-03 09.09.21Recently a friend and I were chatting over coffee about a mutual acquaintance who just got married. “She’s so rich now – combined her and her husband make over $240,000 a year,” my friend told me.

This bothered me. Not because I was jealous of our acquaintance’s healthy household income, but because my friend automatically assumed that because of the salary they were making, they were automatically rich. If there’s one thing I’ve learned since I started this personal finance journey, is that when it comes to money, you can’t judge how financially savvy someone is by their salary or their appearance.

The definition of the word “rich” means to have a great deal of money or assets. Well, if our acquaintance is making $240,000, but also spending $240,000, then she isn’t rich – she’s just living a $240,000 lifestyle. A big pay cheque doesn’t mean a thing if you have nothing to show for it, and we just didn’t know what their financial situation is to know if they are actually “rich.”

From 2006 to 2011 (5 years) I grew my net worth from -$20,000 to +$63,000. That’s a difference of $83,000 (or an average of $16,600 per year)! And I did that all on an average annual salary of $44,000. My salary was quite low, but my savings rate made me feel rich.

Now that my income is higher (I’ll earn around $85,000 to 90,000 this year), I’m trying really hard to curb lifestyle inflation. Because let’s be real, the more money you make, the more you have to spend (and the more you likely will spend). More money equals upgrading your housing, buying nicer clothing, more frequent Starbucks trips, and more vacations. I’m guilty of some of those things, but I’m trying the best I can. :)

Below is a chart based on an average month of spending for me in 2007, 2013, and 2016:


Related: Can lifestyle inflation be avoided?

Let me be the first to tell you that I’m not rich. I do not earn large pay cheques, and my net worth is only about $120,000. But my monthly expenses (as shown above) aren’t that much different than they were 9 or 10 years ago. My rent has only gone up by $100, and I feel like my groceries and entertainment budget have increased by a normal amount.

So while my $120,000 net worth isn’t much to celebrate now, that number will continue to increase every month. And 2016 could turn out to be a great year for me, as I have the ability to save nearly $40,000 if I stick to my budget.

I’ve blogged about it before, but I no longer aspire to earn more money. If it happens, it’ll be due to working hard at my full-time job or becoming more strategic with my freelancing. But I’m not going to sacrifice my lifestyle in pursuit of more dollars. :) So that means I’m never going to have a enviable salary that my friends can talk about behind my back. I’ll never wear high fashion brand name clothes, or fly first class, or hire house cleaners (but actually that’s mostly because RD refuses to let me). I just want to be comfortable.

My method of getting rich is by being smart with the money that I already earn. I want to save at least 50% of my net income this year, curb lifestyle inflation as best I can, and grow my wealth in a healthy and sustainable way. To me, this seems like a way better plan than trying to figure out a way to earn millions of dollars, or buying Lotto Max tickets in the hope of striking rich. :)

So whenever you hear of someone who earns the kind of salary you could only dream of, just remember that comparing yourself to others (while tempting to do) is never a good idea. There are always going to be people who make more money than you, but you can live a fulfilling life on your own terms by keeping lifestyle inflation in check and saving your money.

What are your savings goals for 2016?

Author: Krystal Yee

I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.


  1. Inspiring article. I completely agree with you in that salary increase will mostly likely equate to lifestyle increase.I make an average salary now but it still never feels like enough. Thanks for breaking this down! Interesting to look at.

    • Ramona says:

      You are absolutely right on that. Lifestyle inflation is indeed a huge problem. We had months when we earned way more than my mother-in-law for instance and saved nothing, while she’s diligently saving 60% of her pension.

  2. Jordann says:

    Thanks for the reminder that comparing yourself to others is a lose-lose proposition.

    I definitely get envious of people who make a ton of money, but then I remember that most of those people are up to their eyeballs in debt, don’t save anything, or have to deal with terrible or stressful working conditions.

    Myself, on the other hand, I don’t make all that much money ($55k last year) but I have enough money in the bank and my living expenses are low enough that I don’t worry about job loss too much or unexpected expenses. That comfort makes me rich.

  3. Money Beagle says:

    I’m assuming ‘utilities’ means heat and electric. How do you get that for $25 per month? Even if part of that was or is included when renting, what about when you were an owner? That seems unbelievably low.

    • Krystal Yee says:

      Now that I’m renting, the electric bill should average out to $50/month or so over the year. When I owned, I was paying about $15-20/month because I never used my baseboard heaters. I had a gas fireplace and that bill was included with my monthly condo fees, so always used that to heat my home.

  4. nic says:

    Hi Krystal –

    Long time reader and mostly “lurker” here but I enjoy your blog a lot and love seeing your life and financial plans evolve. I wanted to take you up on your offer (from quite a while ago) to pass on the names/contact info of the condo owners you rented from in Hawaii! Would love to have this contact info please!

    PS – have you ever read the mr. money mustache blog? it is really good also

    • Krystal Yee says:

      Hi Nic – thanks for commenting. :)

      Here is the VRBO listing for condo owners I rented from in Hawaii ( – note that the rate I got was $129/night back in 2010 and they’ve since raised it. The location is amazing, condo is clean with a fully stocked kitchen, and the views cannot be beat.

  5. Liz says:

    I know someone who makes a lot of money but they are buried in debt and hate their job! That seems like a form of prison. Money must be intelligently managed. There was an old man who did odd jobs his whole life and lived in a very small but tidy house in my hometown. When he died it was revealed by his lawyer he had $2.1 million dollars! He was very content with his simple lifestyle all those years.

  6. zeudi says:

    Hi Krystal!! I find you so inspiring I’m a long timer regular follower of your blog
    I’m 21 currently and looking for my first career job. I’m aspiring to become an accounting technician. The salary in this industry range from £15k to £32k once your experienced and fully qualified. My career aspiration is to work as an accountant and do freelance accounting work on the side. So once I have enough experience I can open my own firm .
    So I know I would not be one of these with high salary. My plan is to reach financial stability and hopefully financially free by increasing my assets through investing in property and gold&silver aswell as reducing/eliminating my liabilities.

  7. NZ Muse says:

    The one caveat being it’s a LOT easier to save when you make more. The best thing I ever did for my savings rate was change to a higher earning job. There’s only so much you can cut expenses…

    • Pira says:

      Yup. I agree with the message of this post, but the optimal scenario is making 240k like the couple you mention, and *also* being good savers…like you. Someone that makes a modest income can certainly save more than someone that squanders a large income, but a higher salary certainly means higher savings potential when done right.

  8. Karen says:

    When I switched careers paths, I took a significant pay cut, so I’m putting less into my RRSPs and TFSAs than I was before. My savings rate is a LOT lower, but I am a LOT happier than I was a year ago. Hopefully over time, I will be able to have a higher salary.

    Don’t sell yourself short. A $120 K net worth is something to be very proud of. I doubt many people our age have anywhere close to that amount. In comparison to a lot of people, including myself, I’d say your paycheque is pretty big. ;)

  9. MA says:

    How the heck did your net worth increase so little over the past 4-5 years?

    Your income was much higher, stock market returns were fantastic up until the last few months, you made a little money on your property, your budgets would have us believe that your spending was responsible… So it feels like at least CAD 50k-100k(+?) is missing.

    • Krystal Yee says:

      Hi! Thanks for your comment.

      So my net worth from 2012-2015 (4 years) grew about $60k. I saved very minimally in 2012 as I was traveling for the entire year. So in 3 years where I was actually saving, my net worth increased by about $20k per year on an average annual salary of $75k. Which I think is pretty good considering I had about $8k out-of-pocket medical expenses to deal with during that time frame, a job loss, and recently a pretty significant decrease in my investment portfolio. Hope that helps!

  10. Hi Krystal. I so agree with you. It also depends on if you’re single, a couple or have a child or children. A couple with the a saving mindset and splitting living costs can really benefit. Saving 50% of your income is amazing, Krystal! I wish my husband and I both spent more on experiences but yet saved more consciously when we were a couple before having three kids but we did pretty well but could have been much more purposeful about it!

  11. Awesome writing. Very interesting and motivational story. Thanks

    Only question, where do you get home insurance for only $20 as we are around $ 120/month. Also, only $25 for utilities? Amazing😁 Thank you again

    • Krystal Yee says:

      We got quoted annual renters insurance of $450. So split between two people, it’s actually less than $20/month each. And as for utilities, we were told by the landlords that the previous tenant paid about $50/month on average. So we used that number for our budget and split the cost. 😊

  12. Cass says:

    Good post, although I do think it’s important to point out that 2016 looks like you cut your expenses very well from 2013, however you’re splitting rent. So you do potentially live in a nicer place maybe not due to salary but due to a relationship…

    • Krystal Yee says:

      I wouldn’t say my place is nicer (my townhouse was pretty nice), but yeah expenses definitely went down because I’m living with someone now.

  13. Tawcan says:

    Totally agree, making a lot of money doesn’t mean you’re rich if you spend it all or spend more than you make. Looks like your budget is pretty bare-bone, which is great. Living with someone definitely helps when it comes to expenses. The question is, how would the budget look if you decide to tie the knot one day? Would you continue to budget separately? Or would both incomes go in one bucket and budget is done together?

    • Krystal Yee says:

      Neither of us as ever combined our finances with someone else before, and I’ve never been comfortable with the idea. I think that eventually we would open up joined chequing/savings accounts and contribute to those for shared expenses, while maintaining our own personal accounts … which means my budgeting will still be done separately.

  14. Charlie says:

    Totally agree. It’s amazing to see in almost over 10 years, your spending habit has remained mostly the same even though you earn much more. Great job!

  15. SP says:

    Great post. Our spending has certainly increased with our income, but I keep an eye on it. I’m happy with our savings each year and net worth increases, which is the main point.

  16. thriftyimage says:

    I agree. Savings is key and paradoxically – the less one makes, the more he or she should save.

    On another topic, Mavis over a had this link for kombucha tea recipes you may find helpful –

  17. fehmeen says:

    I totally agree with you here. The easiest way to feel rich is to find a way to live WELL within your means, and you’ve demonstrated that pretty nicely. You could earn a nice fat paycheck each month, maybe $100,000 but if you spend $100,100, then you’re not doing anyone any good. Good post.

  18. L.D. Sewell says:

    Very true. I once played the “just make more money” game too. In fact I played it most of my life. Unfortunately it is kind of like trying to outrun a bus on foot going down a hill…sooner or later its going to get you. You simply cant run fast enough.

    I’ve known many people who appeared to be doing very well – but behind the scenes it was all a lie built on a mountain of debt.

    Instead of simply trying to make more and more money – it works much better if you just eliminate more and more debt completely – until ideally there is no personal debt left at all.

  19. Chinazom says:

    Hey Krystal,

    This is truly a great article! Most people fall into the trap of increasing their cost of living at the same rate (or an even higher rate) as their income. This just means their net worth will not increase.

    I admire the fact that you value your quality of life (and sanity) enough to decide to focus on managing the income you already have! People are always looking for MORE, and it’s refreshing to see someone actually being content with what they have.

    Again, great post and great blog!

  20. Deb says:

    I would have to disagree with the idea that is how much you save, rather than how much you make. That can be true to a certain extent, but you and your partner make a good salary. I’d be interested in how you would cope on $100,000.00 per year, with two children to house , feed and educate. Not everyone can pack up and leave to work where ever they wish.

    In some ways I would say your blog reflects your relative youth . What if you or your partner became disabled? Would you bail on him/ her because they were not contributing financially? Life is not as cut and dried as one might imagine. If you made $40,000 per month and your education level and were such that you could not land a better paying job, would you criticize that person for not saving?

    • Krystal Yee says:

      That is true, we do have a very comfortable salary. But that wasn’t always the case. When I first moved to Vancouver I was making $42k and was living on my own. The amount you can potentially save would certainly be dictated by your salary, but I guess the point of my blog post was to show that just because someone earns a large salary – it does not mean they are rich.

      If my partner became disabled, of course I wouldn’t bail on him because he was not contributing financially. I don’t think I ever said I would do something like that – but because we’ve been able to keep our shared relatively low, and I’m able to save a lot of my income every month, I’d be able to pick up all of the expenses on my own.

      And you’re right, life is always throwing us curveballs – but it’s up to us to adapt. Keeping expenses in check and saving as much as we can (when we can) can help ride out life’s unexpected turns. :) Everybody has the ability to save money, and everybody has the ability to either reduce expenses or increase income (sometimes even both).

  21. Barb says:

    I like that you are being realistic with trying to curb lifestyle inflation. While it seems counterintuitive, hiring a cleaner is one of those things worth the money and can be great for a relationship

  22. Nice article. We have a few savings goals this year like maxing TFSAs and RRSPs, namely my wife’s, but once that work is done we’re going to spend some money.

    That is our plan, pay a certain % to Us Inc. and enjoy your life with the rest.

    Saving is good, we do that first, but then we spend most of what is leftover.

    (I was making <$25k when I started the workforce).

  23. Richard says:

    “Lifestyle Inflation” I love it!! It just sums it up. It sums up how many people live their lives and why they never really get ahead, despite significant increases to their income throughout their career, and standing back from that, it actually contributes massively to why these people are never truly happy. You make more, you spend more, you long for more. It’s a vicious cycle that never ends for some.

  24. dave says:

    parents used to always say this to us when we were young. And now I realize it’s true. And the saying a penny saved is a penny earned is true also

  25. One thing we can’t avoid is real inflation. The data you have presented are legitimate expenses and I don’t think any of them have suffered deflation, let alone maintained a zero increase for the almost 10 years tracked. I am a bit surprised you have been able to maintain some costs over this period of time. Kudos!

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