Saving money takes a superhuman amount of self-control, especially when you live in an expensive city like New York. But JP Livingston, a now retired 28-year-old former finance professional, managed to resist the world-famous New York shopping, dining, and bar scene to save $2 million in just seven years.
According to Business Insider, Livingston worked her way up to a senior position at her finance firm, all while investing and saving 70% of her income. "The way I think about it is: If you don't need to work for money, you can do anything you like," she told BI. "If you want to go work at a traditional job, you can, but you don't have to. [Early retirement] is a word I picked up when I was looking at my future way back in middle school and high school."
While making $100,000 per year straight out of college certainly helped, Livingston relied on one financial rule to help her reach her goal: Think of every purchase in terms of cost per hour worked. So if you make $20 an hour, for example, then a $60 blouse would cost you three hours' worth of work at the office. She reportedly picked up this tip from Joe Dominguez's book, Your Money or Your Life.
"If you think about how much you earn and you divide it by the number of hours you work, you get the amount of money per life unit," she explained. "If I were to get one point across, it's that if you think of things as not just what you save that day, but having that money work for you and compound, it will totally change the way you spend money."
Do you think Livingston's piece of financial advice would help you save? Share your thoughts in the comments below.