I saved up my first $100,000 by the age of 23 all on my own and want to share my insights and learnings with others who may be on the same journey.
Introduction:
Saving up $100,000 in your twenties may seem like a daunting task, but it’s definitely possible with a little planning and effort. In this blog post, I’ll share some tips on how to save up this much money, even if you’re on a tight budget.
1. Set a goal.
The first step to saving up any amount of money is to set a goal. How much money do you want to save, and by when? Once you have a goal in mind, you can start to create a plan to reach it.
Breaking up my goal into smaller steps was an intuitive game plan that really helped me reach my goal faster. Hopefully, it can do the same for you.
2. Create a budget.
Once you have a goal, it’s important to create a budget to help you track your spending and make sure you’re on track to reach your goal. There are many different budgeting methods available, so find one that works for you and stick to it.
Outside of fixed expenses such as rent, utility bills, medical insurance and so forth, I recommend setting a budget for your discretionary spending as well. What is discretionary spending? Well, I like to call it the fun money which is eating out, shopping, and vacations.
One great way to track monthly expenses is through an app my partner developed that is completely free, easy to use, and available on the App Store called “Let’s Save”. I guarantee you that this is an app created out of passion and kindness for those who on the same journey so there are no hidden fees or exchange of your personal data.
Here is the link to the app for download on your iPhone, iPad, and Mac. https://apps.apple.com/us/app/lets-save-private-budgeting/id1669437433
3. Cut back on unnecessary expenses.
One of the best ways to save money is to cut back on unnecessary expenses. Take a close look at your budget and see where you can make cuts. Maybe you can eat out less, cancel unused subscriptions, or find cheaper alternatives to your favorite brands.
When I felt the urge to go purchase something new, I reminded myself that I might already own it in my closet somewhere or my family / friends may be willing to lend it to me. This really helped me cut back further on unnecessary purchases beyond eating out or subscriptions.
4. Increase your income.
Another way to save up money faster is to increase your income. This could mean getting a part-time job, starting a side hustle, or negotiating a raise at your current job.
At the time of saving up my first $100,000, I completely relied on my job and employer to help me reach that goal. Sometimes, you don’t need multiple streams of income and can focus on just one and do it well. Other times, it can be a collection of “hustles.”
5. Invest your savings.
Once you have some money saved up, it’s important to invest it so it can grow over time. There are many different investment options available, but the most straight forward path could just be investing your money into an ETF that tracks the S&P 500 and contributing to your employer’s 401K accounts.
In any case, investing is the key to letting the money you earned grow to the levels you want with time. Time is one thing you cannot get back, so the earlier you start the better it is for your future.
Conclusion:
Saving up $100,000 in your twenties is definitely possible with a little planning and effort. By following the tips above, you can set yourself up for financial success in the future.
Additional tips:
- Automate your savings. One of the best ways to save money is to automate your savings. This means setting up a recurring transfer from your checking account to your savings account each month. This way, you’ll save money without even having to think about it.
- Find a savings friend or community. Having a community can help you stay motivated and on track. Find a friend or family member who is also trying to save money and hold each other accountable or follow my blog or TikTok to get periodic content on personal finance.
- Don’t give up. Saving up $100,000 takes time and effort, but it’s definitely possible in your twenties. There are so many odds going against our favor, but you are not alone in this journey. I was inspired in my early twenties by Tori of HerFirst100K. There were moments where I felt like I couldn’t make it through because I wanted to leave my job or go back to school, but seeing this goal through has changed the directory of my life.
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