While some people define disposable income as the money they have left over to spend, Portia and Kyron Jackson define it as the money they have to save.
For the Los Angeles-based couple, saving is not just about putting something away for a rainy day. It’s a recipe for building wealth for themselves and their 8-month-old daughter, Johannah Grace. In addition to saving 15% of their income for retirement, they have stocked up $24,000 in an emergency fund–enough for six months of living expenses. “We also save 10% in an ING account for additional investments such as entrepreneurial endeavors,†says 30-year-old Portia, who is an aerospace engineer. The couple has plans of buying a franchise or rental property in the near future to provide them with passive income.
But strategic saving hasn’t always been a top priority for the Jacksons. Before the couple got married in April of 2011, Portia was barely making ends meet in graduate school. “I didn’t have too much to save, but what little I did have, I just threw into a savings account and didn’t think of it,†she says. Kyron, who is 36, had even less of a savings strategy: he kept all of the money he earned as a human resources information systems manager in a non-interest-bearing checking account.
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