9 Steps to Save $100,000 by the Time You Turn 30
If $100,000 sounds like a lot of money to you that is because it is. But it’s also very much an attainable goal if you are willing to make some sacrifices. For those of you who were wondering, sacrifices are those things that our parents never made us make because they felt guilty on account of the divorce.
Here are 9 steps that can help you get you on your way to building that $100,000 nest egg.
1. Keep living like a student
Just because you’ve finished college doesn’t mean you need to be finished living like a student. No one is expecting you to have a big fancy apartment or that you will be out each night eating fancy dinners. Rather than getting swept up in shopping for your big boy (or girl) apartment – find a cheaper neighborhood or live with a roommate for another year or two. Not only will you save a lot of money, but it will also seem less weird that you are still playing beer pong.
2. Don’t have credit card debt
Think those drinks this weekend were expensive? Just wait 7 years until you are done paying them off. Credit cards are one of the best ways of establishing and maintaining good credit. That’s the good news. The bad news is that carrying credit debt is probably the best way to not meet your financial goals. Don’t live beyond your means. If you cant afford it, then don’t buy it.
And for those of you with self-discipline, use your credit card for some of your budgeted monthly expenses and pay them off each month. It will build your credit history and maybe earn you some travel miles or a little cash back.
3. Take the 401k match
As the esteemed financial advisor Janet Jackson once said, “the best things in life are free.” Clearly Mrs. Jackson was referring to the free money offered to you through your employer in the form of a 401k match.
If your employer offers a match, figure out how much and how to qualify and start taking the free money.
4. Get a promotion
Easier said than done, to be sure. But it’s important to remember that you’re not just limited to your current salary when it comes to reaching your savings goals. Getting a raise will make it much easier to stack that paper. Look for ways to gain more responsibility at work that can help you showcase your skills and eventually lead to a pay raise. And if you’ve been at your current job for a while with no pay raise in sight then it may be time to start looking for another job. Remember that it’s never going to be easier to jump from job to job than it is in your 20s.
5. Find additional sources of income
Don’t just rely on your full time job to fund all your savings. Supplemental sources of income can really help drive your savings goals. And thanks to technology, finding additional sources of income has never been easier. Here are just a few ways to generate a little extra money in the new economy – you can drive for a ridesharing app like Uber, you can sell handmade crafts on Etsy but please promise that you won’t start a blog where you write financial advice for young people.
6. Save your bonus
Bonuses, by definition, are not guaranteed – (unless you work on Wall Street) which means you can’t budget for them. So, ideally, you shouldn’t be using them to pay for living expenses. Undoubtedly, this is not always easy to do. But the truth is that when we get a bonus it’s much easier to find ways to spend it than it is to find ways to save it. If you are fortunate enough to get a bonus, then do your best to put it towards something that will help you financially, like paying down debt or saving it.
7. Stop wasting money on stuff you don’t need
Seriously folks, stop buying stuff you don’t need. That includes expensive food and drinks, those quick weekend trips with your friends and pretty much anything on Etsy.
8. Set goals
It’s not enough to just say you want to save $100,000 by the time you are 30. Set goals for each year until you get to 30. Have manageable monthly and yearly goals that you can meet and even exceed.
9. Don’t put your money under the mattress
You may have noticed that interest rates for savings accounts are insultingly low. They are so low in fact that the only motivation for not leaving your money under the mattress is the termites. Lucky for you those aren’t the only two options. Invest your money in the stock market using low cost index funds. If you start in your 20’s it will benefit you for the rest of your life.
