How To Start Saving Money In Your 20’s- Time To Get Focused

save money in 20s

I was lucky enough to instinctively have good savings habits all throughout my late teens and 20’s (I am now 28 years old at the time of writing this post).

By nature, I was always more of a saver than a spender for as long as I could remember.

However, I realize that not many people are like this and especially in their 20’s.

In fact, the exact opposite is generally more common…prioritizing spending over saving.

It looks something like this:

Work for a paycheck ==> Spend that money before there’s anything left to save ==> Work for another paycheck ==> Spend that money again before there’s anything left to save

It’s never ending…and notice the keywords I underlined….work, spend, work, spend...which leaves no room for saving.

This is a cycle that will only lead to dissatisfaction, less flexibility and more financial stress.

If you’re reading this and wondering how you can start saving money in your 20’s, this post will help to get you started.

I give you a lot of credit for having the motivation to research this topic and look for more information, as this mindset puts you way ahead of the average person in their 20s (you know the one who blows money on food, alcohol, going out, living it up, partying etc.).How To Start Saving Money In Your 20's

You are different, and that’s a good thing…this alone tells me that you will be stacking away some serious cash going forward.

And don’t worry, you do not have to give up your life to be a dedicated saver.

It will only create more freedom and options down the road to do what you truly want to in life.

Trust me on this!

How To Start Saving Money In Your 20s

Saving money in your 20’s can be rough, with school loans, low income, part-time work, relationships, distractions, temptations and a whole lot more.

I never said this was going to be easy, but the habits you create now can truly change your life down the road.

Let’s look at a few tips to help get you started:

1.) Adopt a strong work ethic: It’s important at an early age to understand the value of money and to adopt a strong and consistent work ethic. Regardless of the job(s) you are working in your 20’s, realize that they are helping you further your savings goals.  Look at every hour, every week and every paycheck as getting closer to your goal and closer to financial independence.  Let’s face it, you need an income in order to save money and without a strong work ethic, you will lose focus quickly.  A few good jobs that can be pretty lucrative in your 20’s are serving tables, bartending and really anything where you can make tips.  I waited tables for 5 years (along with working another part-time job) and it allowed me to pay off my student loans, stash some cash away and indulge in activities I was interested in.  Regardless what types of jobs you work in your 20’s, take this time to develop a strong work ethic.  Hard work pays off, remember that.

2.) Save a Portion of Your Income (no matter what): Whenever you bring in any sort of income (even if it’s a birthday card filled with money from a family member), I want you to immediately save a portion of it and put it into a savings account where you won’t be tempted to spend it.  You see, when we’re in our 20’s, money is spent almost as soon as we receive it.  Although it may feel good at first, this habit will constantly keep you under water.  The idea here is to give yourself more space and freedom in life, and this can be accomplished through financial education and persistent action.  The portion of money that you save each pay period, try to pretend like it’s not even there. And more importantly realize that every chunk you save/invest is slowly creating more momentum for you.  Another key point to implement is to automate this process through your bank or investment company, this way money is guaranteed to be saved, no matter what. Automation alone will result in saving consistently and watching your balance grow over-time. Take it from me, set up automatic deposits and you will thank me later.

3.) Read Books on Personal Finance: My life really changed when I started reading various books on personal finance. In fact, I became addicted and quickly turned into a personal finance “geek”. The type of information provided in these books opened my eyes to what is possible through saving and investing your hard earned cash instead of throwing it away and making other people rich.  A few personal finance books that I highly recommend for people in their 20’s that are juggling student debt, low incomes and just overall confusion are:

  • “The Millionaire Next Door” – Thomas Stanley
  • “This Richest Man In Babylon” – George S. Clason
  • “The Total Money Makeover” – Dave Ramsey
  • “Your Money Or Your Life” – Vicki Robin
  • “The Automatic Millionaire” – David Bach
  • “The Simple Path To Wealth” – JL Collins

These books will provide you the road map you need to win with money. Learn from people who are successful in this area and adopt their habits.  The best part about this whole process is that anyone can experience financial independence, no matter what their income level is and how much debt they have. Stick to your plan and never look back.

4.) Live Simply & Keep Expenses Low: There’s something really liberating about only buying things that you need, getting rid of unnecessary clutter and living an overall simple life. Transitioning to a minimalist lifestyle will be one of the single best decisions you ever make in your life (for your mental health and wallet).  This will also result in keeping your expenses lower which in return will allow you to save more money.  Realize that things or objects do not make you happy, but progress does. Living below your means and really being strategic with your spending will result in a much higher savings rate.  This is almost like giving yourself a raise as it will free up extra income to use for saving.  This may be hard at first to adopt a simpler type of lifestyle, but overtime it will become more natural and especially when you see your savings grow.

A Few Tips To Help Speed Up The Saving Process In Your 20’s

1.) Start a Side Hustle: Having an extra source of income outside of your job can really shake things up in a good way. I believe starting a side-hustle in your 20’s is one of the best times to do so, since that’s when you have the most energy and hunger.  The power of the Internet has opened up so many doors and opportunists for people to create additional cash flow in their lives. I know the few side projects I’ve started, have helped increased my savings rate dramatically. If you’re confused at where to begin, I recommend considering starting a blog to get your feet wet.  At the very least, you will learn a lot along the way.  Having a side-hustle is both rewarding and fulfilling and adds another layer of financial security in your life.

2.) Become More Efficient/Create More Value: You should constantly be working on becoming more efficient in your life by expanding your skills, knowledge and creating more value for the world.  This can be done through self-education, reading influential books, going to seminars, adopting productive habits etc.  The more efficient you become, the more value you can offer which leads to making & then saving more money.  Always take the time to invest in yourself, each and every day.  You are your greatest asset.

3.) Keep Track of Your Net Worth: This has a psychologically boosting effect like no other.  Seeing your progress whether it’s paying off debt or tracking your net worth can be both addicting and seductive and will encourage you to keep pushing forward.  I recommend tracking your numbers in an excel spreadsheet, with charts/graphs to help you visually see your hard work paying off.  This alone has made a huge difference in my finances as well as my mindset and motivation.  If you need an excel template to work off of, just let me know.

There you have it, some practical tips/steps that you can get started with today to save more money in your 20’s.

The most critical part here is to actually started.

The financial decisions you make now can have an extremely positive impact on your life going forward, so please don’t take this information lightly.

I want you to become a warrior with your finances from here on out like your life depends on it (because quite frankly, it does).

Please keep me posted on your progress, as I’d love to hear how you are making out and if you have any questions.

If you enjoyed this type of post, please let me know if you’d like me to write future posts based around personal finance.

And if you have any additional tips that have helped you save more money, please leave them in the comments section below!

Begin Living a Minimalist Lifestyle & Change Your World

How To Live a Simpler Life

Instinctively I’ve always lived a pretty minimalist lifestyle…

However, it shocks me how many people live well beyond their means and don’t even realize they’re doing it.

Buying things they don’t need, going into unnecessary debt, having to spend every paycheck they get on ‘stuff’ and never paying themselves first.

This immediately puts you in a hole and creates habits that are hard to break.

When you begin living a minimalist lifestyle, your options really begin to open up in life.

The simple life in my opinion, is the good life.

It cuts out so much extra tension (especially with finances) but also with unnecessary clutter as a result of mass consumerism.

And down the road if you save/invest the surplus, it allows you to do what you want, when you want and where you want to.

Financial independence is always the end goal.Begin Living a Minimalist Lifestyle

And this ultimately means creating more freedom in life and never having to rely on money again.

Sound impossible?

Well it’s not when you begin living a minimalist lifestyle and do things differently from the vast majority of people.

It actually can be quite addicting once you start to see your savings increase and your spending decrease….and also when you start getting rid of unnecessary crap that serves no value.

This isn’t just liberating from a financial perspective, but also from a mental health perspective.

Knowing that when tough times come up (which they will), you have money in the bank to lessen the burden.

I want to tell you a quick story…

The other day I was with a group of people having a conversation (although I was mainly just listening/observing) and there was this one guy there who talked a “big game”.

He gave off the impression that he had his sh*t together…

He had a nice car, living situation, expensive clothes, shoes and the latest gadgets.

When the conversation went on a bit longer, I began to realize that this guy wasn’t as “put together” as he wanted to come off as.

In fact, it became apparent to me that he was flat out broke, in debt and barely getting by day to day (as he confessed in a round about way).

Nothing against his character or personality, however it does bug me when people own all this stuff and have absotuely nothing to show for it.

To me, it’s just plain stupid.

And even worse, the first impression this guys gives off would fool many people into thinking he’s rich.

When the exact opposite is actually true.

To make a long story short, do not buy expensive things to look cool or wealthy…as most people don’t really care.

Once you adopt a minimalist lifestyle, there is no going back.

I realize this post was a bit of a rant, however I think it’s an extremely important topic and I encourage you to try this for yourself.

If this changes even one person’s mindset on how they are currently living and encourages them to live a more basic and freedom enriched life, then I’ve done my job.

What are your thoughts on this subject?

Are you already living this way?

Are there improvements you can make?

Diversifying Your Income – Having More Than One Income Stream

Generating Extra Income

You’ve probably heard it before that you should have some diversification in your income generation strategy…or more than one income stream.

There’s a reason why many successful people (especially entrepreneurs) do NOT just rely on one source of income and that reason is security.

If one particular income source were to “crap out” for any reason, you have more options to fall back on, more flexibility and more diversification.

It blows my mind how many people just rely on their 9-5 job to get by, without even Diversifying Your Incomeconsidering the consequences of putting all your eggs in one basket.

Nothing against 9-5 jobs as I still work one myself…

However, I have multiple streams of income that help supplement this.

Let me ask you a question, what if you lost your job?

What money would help keep you afloat?

How would you pay your bills?

If I can give you one tip, it would be to never rely on one source of income.

In this short post I want to provide you with a few concrete examples of my diversification strategy to maybe get your gears turning and motivation flowing.

Please note that this is what I do and that you will have to find your own income generation methods…but maybe this list will help catapult you in the right direction.

My Current Income Generation Strategies

1.) Solo Ads– If you’ve been reading this blog for anytime now, you may be familiar that I run a solo ad business.  Solo ads have helped provide me an extra source of income for almost 2 years now.

2.) Blogging- Although this blog is still fairly new, it does generate a little bit of income for me and also for my solo ad business. I also expect this blog to organically grow with the more content I produce and exposure it gets, resulting in more income down the road.

3.) Affiliate Marketing- I’ve been doing affiliate marketing for years now using ClickBank, which has been an excellent extra stream of green.  I started out with small niche websites/YouTube, and now have transitioned into other marketing techniques.

4.) My 9-5 Job- My day job is a consistent paycheck with benefits and helps me invest more into other income generation methods.  Jobs can actually be really valuable if you use them as leverage instead of relying solely on them.

5.) Investing in the Stock Market- This is my favorite strategy for building long-term security and independence.  I invest a percentage of my income every single month into the stock market (specifically through Vanguard).  If you start as young as possible and are disciplined enough to ride out the volatility of the stock market, the results (especially because of the power of compound interest) can be amazing!

I also have a few other projects in the works…My main focus being E-commerce (more to come on this) 🙂

However, I highly recommend not putting too much on your plate to start.

It’s important that you focus on only one income source at first until you feel comfortable enough to attempt something else.

What income sources do you currently have?

Personal Money Management Tips – Create More Freedom In Life!

Personal Finance Tips

Personal Money Management TipsIf you don’t already know, I am a big personal finance geek.

I’ve read dozens of books on the subject for the simple fact that I enjoy the idea of creating more freedom in my life through spending less and saving/investing more.

In fact, I think that personal money management is an extremely important topic that should become a central focus of everyone’s life.

If you’re unhappy with your current job or financial position and feel completely trapped in your situation, here are a few tips you can start implementing that will get you on the right path to creating more “space” in your life.

1.) Avoid & Pay Off Debt

It’s vital that you avoid debt at all costs (some may disagree), but the peace of mind that comes with being debt free is priceless.

If you are currently in debt, do NOT keep digging a deeper hole.  Come up with a plan and be aggressive with paying it off.

Once I paid off the last of my student loans a few years ago, I couldn’t believe how much extra money was freed up for me to save, invest or put towards my Internet businesses.

I challenge you to set a realistic goal of when you can pay off your debt…

Do out the math, create a spreadsheet and stay hyper focused as it will be one off the wisest decisions you ever make.

2.) Limit Your Spending

You wouldn’t believe how much money we spend on unnecessary and irrelevant things in our lives.

Sometimes a few simple tweaks to our monthly habits can mean hundreds of thousands of dollars, if not more, in the long run.

Cut out any unnecessary spending that doesn’t enhance or add value to your life.

This could be eating out at unhealthy restaurants, avoiding happy hour and expensive bar tabs, buying loads of junk on Amazon, purchasing a coffee out every day, excessive driving, buying lunch out everyday at work….etc.

Pinpoint where the bulk of your extra income goes, and see how much better life becomes when you hang on to a certain portion of that hard earned cash.

3.) Indulge In Free Activities

The great thing about being more conscious of your spending, is that is forces you to realize that happiness doesn’t come from the things you buy…Financial Independence

But more from the experiences that don’t revolve around money.

For example, one of my favorite things to do (that doesn’t cost me anything besides a little bit in gas) is taking walks at different trails, hikes or really anything that has to do with the outdoors.

I love this type of activity for a few reasons…

1.) You are connected with nature which creates a natural euphoric feeling.

2.) You spend virtually ZERO money.

3.) It’s great to share the outdoor experience with people you care about.

4.) It’s a healthy way to spend time both physically and mentally.

Now we can reverse this for example to an activity like going out late-night drinking at a bar…

1.) You spend most likely anywhere from $20-100 on food/alcohol (maybe more).

2.) You feel groggy and unmotivated the next day.

3.) A consistent habit of this will make you broke and fat.

4.) You’re more likely to participate in other unhealthy habits, like late-night eating, smoking, buying a round of drinks for everyone etc..

Now I realize everyone’s situation is different but this is just for example purposes to make you think a bit.

I know I’m not normal 🙂 But this is partially why I am never stressed about my financial situation.

4.) Save & Invest The Rest

Now that hopefully you are out of debt or are working aggressively to pay it off, you will want to start saving and investing!

This is when things get exciting and where much momentum starts to kick in (especially when you factor in compound interest).

Now I’m not going to get into detail about the specific investment vehicles you should park your money in, however it’s important that you do your research and find an approach and strategy that’s comfortable for you.

You should aim at the very least to save 20% of your income.

I invest over 40-50% of my money each and every month which is a bit extreme but not when you get used to living a simple lifestyle.

I think the problem here is that people shoot too low and only invest 5-10% of their income…which is better than nothing but not enough if you want to gain financial independence sooner rather than later.

Think of every time you put money away, you are that much closer to freedom in your life.

Look at this as a lifestyle more than anything…you are truly creating the limitless space and opportunity that you so badly deserve.

I want to reccomend a few good blogs on personal finance that I suggest you take a look at.

These have also helped me along with some of the books I have read in the past.

Please feel free to check them out and let me know what you think:

(In no particular order)

1.) Mr. Money Mustache

2.) Frugal Woods

3.) jlcollinsnh.com

4.) My Money Wizard

If you enjoy articles on personal finance, money management, building wealth and would like me to post more on the subject…please let me know in the comments section below.