A 2021 study conducted by Fidelity Investments shows that most Americans want to save more money than during earlier years. The reasons are understandable since lots of Americans lost jobs due to the Covid-19 pandemic in 2020 and its fallout on the national and global economy.
Actually, there’re no age limits when you can start saving money. However, the earlier you start saving, the greater your chances of having a lot of money by the time you retire. As a matter of fact, there’re lots of millennials that have managed to save $100,000 and more before they reached the age of 25.
In this article, I will be discussing some of the ways these millennials are using to save $100,000 before 25. Regardless of your age, you too could use all these tips and increase your net worth in a few years.
Are you too interested in how to save $100k before the age of 25 or would like to start now regardless of how old you are? Then continue reading. In this article, I will discuss the best tips that’re helping countless people how to save $100k before 25.
Tips to Save $100,000 Before 25
These tips are from various real-life persons- both women and men- who have actually managed to save $100,000 before they’re 25. All these proven methods and legit too. You can adapt these to suit your own needs.
1. Make a Personal Budget
The first and foremost tip that millennials who have successfully saved $100,000 before 25 is to make a personal budget. This means, carefully listing various expenses and allotting just the right amount of money.
If you’re going to buy something expensive or planning a trip somewhere, include that in your monthly budget. And the trick here is to stick to your budget. This way, you can avoid overspending or even running out of cash, when it’s needed the most.
2. Find a Side Hustle
The best way for saving $100k before the age of 25 is to find a superb side hustle. As a matter of fact, about 83 percent of all Americans in the workforce have some or the other side hustle.
Therefore, you too could easily find one. There’re plenty of side hustles you can do online or even offline.
And the money you get from these side hustles can be used for investing rather than on spending. You can refer to any of the best side business ideas or best part-time online jobs and find a side hustle that suits your academic qualifications and skills.
3. Downsize Your Life
Downsizing your life isn’t easy. It involves doing away with several things that we just take for granted in our daily lives. However, if we examine our lives closely, it would be seen that there’re several unnecessary expenses.
And eliminating those wouldn’t really affect the way we live. Instead, it can save us a lot of money. Downsizing a life also means that you’ll have to do without home delivery food and takeaways or other frivolous expenses that we usually don’t bother about.
4. Get Rid of Unwanted Subscriptions
On average, an American spends more than $400 per month on subscriptions of various kinds. These include cable TV channel packages, magazines and newspapers, clubs, gym memberships, and lots more.
In most cases, a lot of these memberships are simply wasted and subscriptions are never fully utilized. Therefore, there’s a vast scope for getting rid of these unwanted subscriptions and memberships. That would save you a lot of money and bring you closer to your goal of saving $100,000 by the age of 25.
5. Pay Student Loans Faster
This might sound like an expense, but it isn’t. In your budget, up the repayment of your student loans. That’s because student debt can setback your life by at least seven years, if not more.
In fact, many important milestones of life such as marriage and buying own house could be delayed merely because of student debt. In America, an average student leaves college with about $30,000 in debt. This also adversely impacts your credit score. Therefore, pay off student debt at the earliest because of the interest that you could save.
6. Settle Credit Card Payments in Full
Never pay a credit card bill just partially. That’s because credit cards come with a feature known as Annual Purchase Rate or APR. When you buy something on a credit card but don’t settle the amount in full, the issuer goes on adding APR during each billing cycle. That means, the APR too gathers more APR and so on.
Often, you could end up paying twice or even thrice the price of your purchases merely due to compounding APR. Therefore, settle all credit card dues in full to avoid stiff APR repayments.
7. Stay Away from Vices
All those millennials that’ve successfully saved $100,000 before 25 have one thing in common. They stay away from vices such as alcohol, recreational weed, and alcohol.
While consuming alcohol occasionally isn’t bad and in fact beneficial to health, those who drink excessively can suffer from various problems such as poor concentration at work leading to delayed promotions or no pay hikes.
Additionally, consider the amount of money you’re burning on smoking a few cigarettes a day. It’s easy to give up on these vices and save a lot of money to reach your target of $100,000 before the age of 25 years.
8. Start Investing Early
And finally, start investing early, is the last tip from millennials that’ve managed to save $100,000 before the age of 25 years. That’s because you can invest small amounts of money regularly on stocks, Exchange Traded Funds, cryptocurrencies, currencies, and commodities to build a superb portfolio.
The earlier you start investing, the greater your chances of making profits on stocks, currencies, and commodities markets and reaching your goal of saving $100,000 by the age of 25. Nowadays, there’re several apps that actually help you to start your investment journey with as little as $5 only. You could use these apps and begin investing right away.
As you can see from these tips from real-life persons that managed to save $100,000 before they were 25, it’s very easy to achieve that goal if you’re serious. All it needs is a bit of self-discipline and some astute budgeting.
Automating your savings by investing in a superb savings plan where part of your monthly income goes directly from your bank, is one more way to save a lot of money. Before concluding, I will add that saving $100,000 before the age of 25 is not a pipe dream as it might sound. It’s possible and thousands of millennials are doing so.