While Tim Jacobs was growing up, his parents earned only $15,000 a year.
Now 26 and living in Wisconsin, Jacobs earns more than $200,000 working as a software-implementation architect and consultant for a software company.
Tim Jacobs is not his real name; for professional reasons, he has requested to remain anonymous.
Jacobs is in a unique position because he earns a high salary while his employers cover most of his living costs. This allows him to save and invest the bulk of his income.
"My wife and I live the typical consulting lifestyle, but we do a little twist: We go and live where the project is," Jacobs says. "I'm running a project that's worth over $200 million, and we've been living out of a hotel suite for a year and a half."
Instead of the more standard consulting lifestyle in which you would spend four days on-site and three days at home each week, Jacobs and his wife negotiated with his employer to cover their living costs in a hotel wherever his project might be, rather than pay for him to fly back and forth every week.
"We are reimbursed for nearly every expense," Jacobs says. "Our hotel, gas, food, laundry, phones, you name it. The only bills we have are car insurance and a cellphone bill, which is 50% reimbursed."
Luxuries like travel are largely covered by their credit card and hotel points, which they accumulate at an astonishing pace living in a hotel for 12 months at a time.
He says he and his wife closely monitor their costs, with the aim of saving half their income. In fact, when taking into account their company stock, retirement accounts, and other investments, they manage to save about 67% of their income. "I want to be able to retire at 45 with $5 million in the bank," he says.
Jacobs' base salary for 2014 was $123,000, and he was paid the remainder of his earnings in an annual bonus and in company stock. All told, he earned $211,000.
Even though Jacobs isn't responsible for most of his living expenses, he and his wife do choose to keep to a monthly budget. He bases it on the per diem expenses his company will reimburse and "fine tunes" it according to what they have spent previously. Here is what that budget looks like in a mid-January screenshot from his favored money-management website Mint.com:
"The idea here is that we are trending well," Jacobs says. "We're currently well under budget for the month ($1,508.70 spent of the $2,516). You can see we overspent a bit in restaurants, which is a subset category of food and dining, but because we underspent in groceries, we will be OK in the food and dining as a whole."
Jacobs' housing costs are not included, but he negotiated a year at his current hotel down from $150 a night to $69 a night, which adds up to about $1,800 to $2,100 a month, depending on taxes. He doesn't include it in the monthly budget because it is highly unpredictable (if he were to change cities), and unlike his other expenses, his employer's reimbursement isn't based on a per diem. He is reimbursed for the full cost, whatever it may be.
He maxes out a 401(k) for himself and a spousal IRA for his wife (who volunteers, substitute teaches, and is starting a blog), and keeps more than half of their retirement savings in non-qualified investments like low-fee index funds to have liquidity if he does retire early. They supplement employer-provided health insurance with an HSA.
They have no student loan debt, as they paid off his wife's $32,000, and Jacobs did not incur any loans when obtaining his associate's and bachelor's degrees while working full time. He is pursuing an MBA.
He also clarifies that the $288 of gym spending is misleading, because $148 of spending rolled over from the previous month. Shopping and clothing are other areas in which the couple appear to have overspent. This is due to his wife's fledgling travel blog, Jacobs says, and he plans to adjust their budget soon to accommodate the blog's costs.
That they are starting that business, Jacobs says, is another reason they keep to a strict budget. "Since we're starting a business, the blog, we need to monitor our investment, as well as monitor the cash flow stringently," he says. "I have to make sure I'm not shortchanging myself, so I can separate our budget from my wife's blog — it's really important for tax season."
"The budget matches the lifestyle, which ultimately matches what my wife and I dream of: to retire early and travel," Jacobs says. "If you understand the full picture, the budget makes a lot of sense. It's not just what's your end-of-year goal, but what about five, 10, or 15 years?"
Do you have unique savings goals or strategies you'd like to share with the Business Insider community? Email lkane[at]businessinsider[dot]com. Anonymous submissions will be considered.
