Editor’s note: This article was first published in October 2015; all its figures are as of that month, including starting at Google in May 2015, a $22,400 student loan with almost $17,000 repaid in four months, and the truck paid off on 21 October 2015.
When we teach financial education, we often say that one way to tell whether we’re on the right track is how much of our income we manage to save each month. A healthy financial life should let us save at least 20% of our income, although ideally it would be 30%. That savings rate shows that we’re living below our means.
(See: 5 signs you’re living beyond your means.)
In this case, a 23-year-old who started working at Google as a software engineer in May 2015 gives us another example of what in finance we call “financial jail”, which is nothing more than extreme saving for a set period of time to reach a specific goal. Brandon manages to save no less than 90% of his salary. How does he do it?
Brandon prefers not to give his surname or show his photo, to protect his privacy. He explains on his blog that he bought a small truck and turned its interior into a roomy bedroom. That truck is now his home, and it’s parked on Google’s own campus.
His previous option was to pay around $2,000 a month for one of the cheapest housing options available to him, when, according to Brandon, he only used it to sleep.
The young man, who wants to put his financial future on a sound footing, told Business Insider that he came up with the idea so he could pay off his $22,400 student loan as quickly as possible. Thanks to this way of saving, he has already repaid almost $17,000 of it over four months.
He has breakfast, lunch and dinner on the Google campus, and showers at the company gym, so his only current expense is the $121 a month he pays to insure the truck. He bought it for $10,000 and says that, as of 21 October, it has paid for itself.
He has fitted out his truck-bedroom with a bed and a wardrobe, and says it’s the biggest bedroom he has ever slept in.
“Low expenses mean significant savings,” says Brandon, who also admits that having cut out practically all his expenses lets him treat himself to meals at excellent San Francisco restaurants from time to time, something he couldn’t have afforded if he had chosen to live in an apartment.
Although it all started as a way to pay off his student loans quickly, Brandon now says he doesn’t know when he’ll give up this lifestyle, and that he may carry on like this for a few more years.
It may sound crazy, but this kind of extreme saving wasn’t invented by this young man: other young people have already used it to get completely out of debt through a temporary effort.
See also: To get out of debt, he secretly lived in a van until he paid off the last dollar
Featured image: Elise240SX, CC BY-SA 4.0, via Wikimedia Commons.
