Category: Personal Finance

Although this is mainly a marketing blog, from time to time I do enjoy writing articles related to personal finance, saving money, investing and retirement.

It’s always been a passion of mine and a topic that I’m deeply enthusiastic about.

Partially because so many people work so hard at their jobs or running a business but have nothing to show for it.

What’s the point of working 40-80 hours per week and having little or no money tucked away in savings or investment accounts?

To me it’s insanity.

Disclaimer: I am not a financial expert or professional, this is just my personal opinion on this particular subject.

If you read my article on paying yourself first, this money saving technique is what really allows people to get ahead financially and break bad habits like spending their paycheck as soon as they receive it.

When it comes to saving money for retirement, we need to start thinking long-term and how we can make our money work for us…Rather than “you and I” working for money for the rest of our lives.

Again, we need to start making money work for us.

I’m not going to get into specific investments vehicles in this blog post when saving for retirement but I do want to go over a mindset/strategy that I use to save way more than I spend.

Giving me additional freedom and security.

When Saving Money For Retirement, Treat Your Finances Like a Full-Time Business

Most people approach saving money for retirement with very little intensity.

They keep putting off saving for retirement because it seems so far away.

Little do they know that the earlier they start, the more their investments will compound over-time and the less they will have to save in the future (compared to someone who starts later).

Unfortunately, most Americans do not start early enough nor save enough money for retirement.

One tip that I’m going to share with you right now really revolutionized the way I thought about saving money for retirement and personal finance in general.

Here it is…

Once I started treating my finances like a full-time business, I started making major progress.

Eventually your investments should make you enough monthly income that this will replace the need for you to work a job.

So why wouldn’t you take this as seriously as you can and treat it like a business?

For me, this meant really being intentional with the money I earned.

It also meant being more organized:

• I started to create excel spreadsheets that would track all of my savings/investments, net worth, side business income, personal expenses and more.
• I started utilizing the right applications on my phone to be more linked into my finances.
• I created goals and money saving strategies each month to hit certain benchmarks.
• I generated monthly reports for myself to track my progress and ensure I was heading in the right direction.

Now some people may think this is overboard or obsessive, but I look at it as being prepared and being able to have options in the future.

If you do nothing, you will have nothing when retirement rolls around.

Another important point to make is that “retirement” doesn’t have to be at the age of 65.

The more you save at an earlier age, the earlier you can retire.

There are many blogs and stories out there of people retiring in their 30’s, 40’s and 50’s…It’s possible and just this realization alone may be enough to kick you into high gear.

Take your finances into your own hands, be smart with your money and you may be pleasantly surprised with the progress you make over the next few years.

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Are you taking your finances and saving for retirement as seriously as you should be?

Chances are you’ve heard this phrase before “pay yourself first”.

Maybe from a personal finance book, blog, a friend or family member.

Perhaps you’re already doing it yourself or maybe you’re still unsure of what it exactly means.

Let’s dive in a bit deeper to see how such a simple idea can absolutely revolutionize your finances.

What Does It Mean To Pay Yourself First?

To put it simply, whenever you bring in any sort of income whether it’s a paycheck from a job or profit from your business, you will want to set aside a portion of that money in a savings account and/or investment account FIRST, before you spend a dime on anything else…even your bills!

The ones who grasp the concept above and actually implement it over the long-term almost always end up wealthy.

Pay Yourself First Definition

The simplest and best way to describe paying yourself first is to just sketch it out quickly like I did below. Most people follow either the first or second example.

So it should look something like this (rich people):

Paycheck/business profit ==> portion in a savings/investment account ==> bills/expenses ==> anything left over for entertainment/personal etc.

The problem is that most people have this totally backwards which is why they are broke.

Their process looks more similar to this (poor people):

Paycheck/business profit ==> entertainment/personal ==> bills/expenses ==> have nothing left over to save or invest

You want to be the first example in green and not the second example in red.

I know what you’re thinking…this is so easy that it’s silly.

Well yes, and that’s the beauty of it.

You really don’t have to think all that hard to become a good saver and increase your net worth over-time.

The problem is people may understand the above example but they don’t actually do it.

The good news is that we can use technology today to our advantage when saving money as this will put the process on complete autopilot.

A simple example of this is if you contribute to a company 401(k) or something similar.

If you have automatic deposits set up, a portion of your paycheck will go into your 401(k) without you even seeing it.

That’s paying yourself first!

If you don’t have the luxury of a 401(k) or are self employed, you can seamlessly set up automatic payments to mostly all of your different savings/investment accounts.

This makes saving money almost impossible NOT to do!

Let me make one note here…and there’s two schools of thoughts on this.

About debt…

I hate debt and would recommend that you pay off any debt you have (minus a home mortgage) before you begin paying yourself first.

I guess I would say, pay your debt first instead.

To start, save enough money so you have a cushion for emergencies and throw everything else at your debt.

Once you’re clear and free from the burden of debt, you can really start building some serious wealth by paying yourself first.

So How Much Should You Pay Yourself First

Well this really all depends on your current circumstances.

I have always been a big saver/investor and tend to put a larger portion of my income away than the average person.

Think of it this way.

The more money you put away, the quicker you will reach financial freedom where you ultimately have the choice of working or not.

When your investment income exceeds your expenses on a monthly/yearly basis, you are technically free from working.

With that being said, the absolute minimum amount I recommend saving is 15% of your income.

So let’s say you make $50,000 a year and you save 15% of that total…You would be able to put away $7,500 for the year.

Not too bad right?

Well let’s say you’re strange like me and save 50% of the total income of $50,000…You would be able to put away $25,000 for the year.

That’s $17,500 more per year when saving 50% compared to 15%!

Compounded over-decades and that could mean hundreds of thousands of dollars, if not millions more to your name.

The higher percentage of your income you can afford to invest, the better.

But remember it all starts with paying yourself first and valuing your hard earned money and not wasting it.

You might be surprised just how quickly this adds up once you get into a rhythm and track your results.

When it comes to finances you need to have both discipline and patience.

It may not be sexy but it works!

Do you currently pay yourself first?

 

Technology should be your best friend when it comes to saving more money and on a consistent basis.

Too many people do not take advantage of the technology that is right at their fingertips (literally).

Getting used to and comfortable having all of your bank/investment accounts linked to your smartphone can mean all the difference in the world.

And especially if you have a goal of financial independence.

Constantly checking in to see where you stand is incredibly helpful rather than being totally blind to your finances.

Modern day technology is also good for setting up automatic savings plans, creating a detailed budget and tracking your net worth.

All in all, I want you to embrace technology rather than being fearful of it..anyone can learn no matter what generation/age you are.

Below are a few ways that I take advantage and utilize technology to help when saving money and increasing my net worth.

Download All The Necessary Mobile Apps

Taking your finances seriously and socking away extra cash means having all of the proper mobile applications downloaded to your phone.

In doing this, you are only a “screen touch” away from your most important accounts.

Most major banks/investment companies have mobile apps that you can utilize…If they don’t, make sure you can easily login from the Internet on your phone or your computer.

To help explain this further, below are a few apps that I’ve been using for years now (note: everyone’s personal setup will be different based upon where they hold their money).

• Bank of America: I have a simple checking account and savings account with Bank of America. The checking account is used a lot for everyday type purchases so it’s essential that I have this linked to my phone in order to monitor my spending and check in when necessary. I can also easily transfer money from my checking to savings (or vice versa), quickly and seamlessly from my phone (or any other mobile device)
• Capital One 360: This is an additional savings account of mine that provides a
  higher interest rate than my Bank of America savings account.  For that reason, this is where I’m currently putting money away for a down payment on a house. This account in the future will be used for longer term financial goals that I don’t want tied up in an investment/retirement account. Capital One 360 is great because it also allows you to set up savings goals where you can monitor your progress.
• Vanguard: I have a Roth IRA and a Brokerage account set up with Vanguard, which are both invested in the stock market (VTSAX to be exact- Vanguard’s Total Stock Market Index Fund). I like to call these my “freedom funds” that I contribute to heavily to take advantage of compound interest, increasing my overall net worth and setting myself up for financial independence. Vanguard’s mobile app allows me to set up automatic or one-time contributions, track my investments in great detail, and provides in-depth metrics/analytics on how my investments are performing. I personally couldn’t live without this application.
• PayPal: I use the PayPal app for my side business, which allows me to quickly make transactions necessary to my business, transfer profits into my Bank of America account and send money to friends/family. When you run a business you need to be linked up to your accounts in order to save yourself as much time and money as possible. I use my PayPal app daily and couldn’t imagine doing business without it. When I’m “on the go” and away from my computer, this application comes in very handy to complete business transactions.

Automate Your Savings Plan

Another reason why technology is so important when it comes to saving money, is because it allows you to automate your savings plan…which quite honestly could mean the difference in being broke or becoming a millionaire down the road.

With the apps I highlighted above (specifically Bank of America, Capital One 360 and Vanguard) you can create a plan where a certain amount of money is transferred to those accounts every week, bi-weekly or monthly…automatically.

If you know anything about personal finance, you know that this step (as simple as it sounds) is crucial to your financial success.

The reason being is that you don’t have to think about saving/investing for the future since it’s automatic month in and month out.

It allows you to pay yourself first instead of spending your money as soon as you receive it.

And this my friend is how you build real wealth overtime.

Thanks to technology, saving money has never been easier.

Create Spreadsheets or Use Apps to Track Your Net Worth

Microsoft excel, although not entirely new technology can still be a great companion when tracking your net worth whether it’s monthly or yearly.

You can really create in-depth charts and tables based on your finances to keep track of your net worth.

This in my opinion is critical to growing your money as it allows you to see the progress you’re making and gives you incredible motivation to keep striving for more.

Personally, this has been an absolute game changer for me when I started implementing this strategy a few years ago…it’s really inspiring to see your hard work pay off over the years.

Spreadsheets are also really helpful for tracking expenses and improving your overall spending habits.

Lastly, another excellent app/website is Personal Capital which allows you to link your bank/investment accounts to the app in order to track your net worth, create various goals and manage your finances.

This is a great alternative to using your own spreadsheets if you’re not comfortable using Microsoft Excel.

Personal Capital is a useful way to get to know your money better, identify trends and create long-term goals.

Conclusion

In summary, technology when it comes to saving money should be used as a tool to increase your freedom fund, nest egg, net worth or whatever you want to call it.

It’s a sure-fire way to stay on track, stay inspired and ultimately help you reach total financial independence.

Adapting to the ever-changing technology we see today in the financial world is an incredible skill that shouldn’t be underestimated.

These little tips, tricks and tactics will really set you up for financial success over the long-term.

Stay focused, remain persistent and take advantage of the technology that’s available to you today!

There are different ways one can save money, however, it is the effort-effectiveness that counts, not just the potential for financial savings. For instance, you could save some money by rationing in a bit more frugal way but becoming malnourished in order to save a couple of extra dollars is seldom worth it. Moreover, you could try living like a hermit but this kind of lifestyle is not something a lot of people can maintain for a prolonged period of time. What you need are the simplest tricks possible. Methods that will enable you to save money while not having to change too much in your day-to-day behavior and patterns. Here are four such money saving techniques.

1.) Personal finance apps

Sometimes, all you need is a bit of awareness. You see, in a lot of cases, you spend more money than you can afford on items you don’t really need. Now, we’re not talking about the phenomenon of impulse buying (we’ll come to that later) but about the general lack of awareness of just how much some of these things cost you on a monthly or annual basis. With a personal finance app on your side, you will have an insight into the exact numbers you’re dealing with and it will be much easier to avoid some of these mistakes.

2.) Restrain your impulse-buying habits

The next thing you need to do is restrain your impulse-buying habits or, as we like to call it, learn how to stick to the list. Keep in mind that, while buying in bulk may be a frugal habit, this only applies to the items that you’re actually going to use. Here, we’re talking about non-perishable supplies like toilet paper, cleaning supplies and similar items. On the other hand, buying a self-flushing litter box just because it’s 50 percent off is a perfect example of the shopping behavior you need to avoid.

Nowadays, every major store has a website. This way, you can check the items that are on sale and make the list the day before you go grocery shopping. Next morning, while you’re no longer under the influence of all the discounts, you can re-examine the list and drop all the items you deem as unnecessary. Needless to say, you would be surprised just how effective this method can be, while still allowing you to save a small fortune by being able to turn all of these discounts to your favor. Being a bit more of a minimalist can truly change your life.

3.) Save money on your utility bill

The next place where you could try to save some additional funds is the utility bills. Here, there are several things you can do. The first option, a bit pricier one, is to replace your old appliances with new ones and, in this way, reduce your power consumption. As always, you have to spend some money in order to save some more. Another thing you can do is switch from incandescent to LED bulbs. Finally, you can find experts who can compare energy providers and ensure that you’re paying as little as you need to.

4.) Start a saving program

At the end of the day, your jar can become much fuller if you decide to gamify your savings experience. For instance, you can embark on a particular saving program like the 52-weeks challenge, where you are designated to increase the amount you deposit every week. For instance, if you start at $125 on the first week, deposit $150 on the second and raise by $25 every subsequent week. You stand to save as much as $10,000 in a single year. Still, you don’t have to set your goal this high. Even by starting at $1 and raising by a single dollar each week, you stand to save $1,378 by the end of the year.

At the end of the day, one thing that the above-listed four tips have in common is their ability to help you save some money while not feeling like you’re making any sacrifice to your lifestyle. This feature alone makes these methods more than self-sustainable.

Author Bio:

Diana Smith is a full time mom of two beautiful girls interested in topics related to finances and latest business technologies. In her free time she enjoys exercising and preparing healthy meals for her family. Follow Diana her on Twitter and Google+.

 

 

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As soon as you have a stable income, you should start thinking about your future and focus your attention on saving and investing. This can seem complicated, especially to those who have gotten used to living paycheck-to-paycheck, but with a few simple rules you can make the most of your income.

It’s important to note that saving and investing aren’t something that’s available only to the very wealthy; everyone can save and therefore invest some of their income. All it takes is staying organized and being disciplined with your money.

Analyze your finances

Before you can start investing or saving, you need to find out how much you are making and what your monthly expenses are. That’s relatively easy to do, all it takes is keeping track of each purchase you make and all the income you earn.

If you do this for a month or two, you’ll start noticing patterns in your behavior. That means that you can cut back on behaviors that are wasteful or at least not working for your benefit. Sticking to this plan is the harder part.

Decide on the amount

The simplest way to start saving is to decide on the amount that you plan to set aside each month. This can be an actual figure or it can be a percentage of your earnings. This decision isn’t to be made lightly; it’s best to figure out what your expenses are first and only start saving once everything else is covered.

When you’ve made this decision you need to stick to it. One of the ways of accomplishing this is to make the process automatic. That can be arranged with your bank and a portion of your income will simply be transferred to a savings account each month.

Long-term investing

One of the best long-term investment options are simple Index Funds as they contain the lowest fees and outperform the vast majority of actively managed funds. When you buy an Index Fund, for example like the Total Stock Market Index Fund (VTSAX) from Vanguard, you are basically getting a slice of the entire U.S. economy. Warren Buffet has even been on record to recommend Index Investing over picking individual stocks to new investors.

Index investing is very passive but you have to be in it for the long-term to reap the rewards. Alternatively, you could purchase a gold bullion and try your hand in precious metals, which are also a safe investment in the long-run.

Peer to peer lending

Peer to peer lending refers to lending small amounts of money to small and medium business owners directly. This is a faster and less complicated way of getting the money to start your small business. This suits the needs of family-owned businesses, because banks tend to complicate the process.

Peer to peer lending is almost always a safe investment to make and the interest rates are always much higher than those of banks. The amounts are smaller, but this can still prove to be a long-term investment that will generate income for years.

Additional costs

It’s important to keep in mind that investing comes with some hidden costs. This is true for various investments, including retirement funds and 401(k)s. Banks and other financial institutions have fees for their services and you need to ask them about the details because it can add up.

There’s also a matter of taxes that you need to pay on income generated by investing. This isn’t that much in comparison to general income tax, but it’s still something you need to take into consideration.

Saving and investing takes careful planning and preparation. Make sure you know what your goals are and how much money you can set aside before you jump into it.

Author Bio:

Diana Smith is a full time mom of two beautiful girls interested in topics related to finances and latest business technologies. In her free time she enjoys exercising and preparing healthy meals for her family. Follow Diana her on Twitter and Google+.

 

 

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It’s astonishing how much some people owe in student loan debt. Check out these numbers: total student loan debt has reached $1.5 trillion with 44 million borrowers overall. That’s crushing. Even worse, an estimated 8 million Americans could qualify to lower the interest rates on their student loans, but many do nothing about it. Who wants to pay more than they have to? Not you, so let’s find out how to cut down your student loan debt.

Strategy 1: Maximize Overall Savings

If you can manage to increase your monthly student loan payment, consider refinancing your loan with a shorter repayment term. Refinancing allows you to exchange your current loan for one with a lower interest rate.

If the interest rate is lower, and you make larger monthly payments, you’ll pay off your loan much faster. You also pay the least amount of interest possible. Plus, this strategy may make the lowest possible interest rates available to you that you won’t see with other options.

Strategy 2: Lower Monthly Payment

If you are strapped for cash, you might prefer a lower monthly student loan payment. Refinancing works here as well. With a lower interest rate, you can lower your monthly payment, but keep the overall number of payments about the same. In the end, you still save on overall payment costs. It’s not as impactful as Strategy 1, but it does help shave off some costs. Plus, you’ll have a bit of extra cash on hand each month.

Strategy 3: Rock Bottom Monthly Payment

Let’s say you’re income is really tight, and you need to drive your monthly payment as low as possible. If you refinance your student loan with a lower interest rate and longer repayment term, you’re likely to end up with the lowest monthly payment possible. Be careful here, since your total repayment costs could even end up increasing.

Also, choosing this strategy will probably put the best interest rates out of reach. Still, if times are ultra-tight, this might be your only refinancing option. It’s better than defaulting on your loan and damaging your credit score.

Keep in mind that federal student loan borrowers can often lower their monthly payments just by enrolling in an extended or income-driven repayment plan. If you refinance federal loans with a private lender, you lose access to government programs like income-driven repayment and the potential to qualify for loan forgiveness. But extending your loan term without an interest rate reduction can lead to an even more drastic increase in repayment costs — particularly for borrowers who don’t end up qualifying for loan forgiveness.

Tie It All Together

From a pure financial perspective, Strategy 1 is superior since you pay off your debt faster and pay way less in interest. Still, if times are tough, the other strategies offer viable options that keep you economically intact.

For those paying attention, the common thread for all three strategies is refinancing. That is, getting a new loan with better terms to replace your current loan. The fastest and most effective way to refinance is by using an online multi-lender marketplace. These platforms give you real access to lenders who compete for your business. The end results are prequalified rates (not teaser rates) presented in a way that makes it easy for you to make a decision.

Don’t get fooled by rate comparison sites that only show you rate estimates. A true lender marketplace will state that the rates are prequalified. This means they have actual connections to lenders that offer rates based on your personal financial situation. One final tip is to make sure you’re living an overall minimalist life, this can drastically reduce your overall expenses and free up some money to put towards your debt.

Saving money is important…in fact it is necessary with the unpredictability that we face in our everyday lives.

When we have frightening statistics like 78% of full-time U.S. workers living paycheck to paycheck, we know this is an area that is worth discussing.

The problem with living paycheck to paycheck is that one small emergency can completely rock someone’s world in a negative way.

There is no safety, security or certainty when you have little to no money in the bank.

That can be an extremely stressful way to live and it’s astonishing that so many Americans are in this situation currently.

Unfortunately, life’s emergencies will indeed come your way and if you’re not prepared, it can turn into a big mess.

Now is the time to get a hold of your finances and take this seriously…your future depends on it.

In this post, I wanted to briefly go over a few tips, techniques and lifestyle practices I use to make sure I’m prepared when the water gets choppy.

Tips On Saving Money For Emergencies

These three simple tips below have helped me save extra money and smooth the ride when those unexpected expenses show up.

Downgrade Your Life:

Quite literally, many people who struggle with money look like they have it all together with the latest gadgets, new clothes, leased cars, spacious house/apartment etc…but in reality, in many cases the more “stuff” you have the more broke you are (this isn’t always the case, but the more you read up and research personal finance, the more you’ll see this is a common trend). Many of the true rich people or people who have a financial cushion, live extremely simple lives.  They have no debt, drive used cars, live in modest houses, don’t purchase the latest and greatest technology and ultimately live well below their means. Try to adopt a minimalist lifestyle yourself, not only will it make you happier, but it will stuff more cash in your pockets as well.

Increase your income:

Another good way to save more money for emergencies is to increase your income. You can make this happen in a few different ways, whether that’s getting a raise at your current place of work, starting a side-hustle, picking up a second job on weekends (waiting tables/cutting grass), selling crap shoved away in your closet, garage or basement etc. These simple tweaks in your life can dramatically help you stash away extra cash and provide you with a bit more flexibility financially. Sacrifice now, so you can be more comfortable down the road.

Keep track of your progress:

This was a game-changer for me when I started keeping track of my progress (more specifically my net worth).  I recommend tracking your savings growth in an excel spreadsheet or by using a free service online. There is something about watching your money grow (or debt decrease), that is incredibly motivating and keeps you pushing in the right direction. Don’t worry if you’re starting from absolutely nothing, if you take this serious, over the course of a few months to a few years, the results can be inspiring.

Preparing yourself for financial security takes major discipline but it is well worth the sacrifice.

Everyone will have different circumstances, but I think we can all agree that having extra money in the bank is extremely helpful.

The sooner you get on the path to financial awareness, independence and freedom, the better off you’ll be.

You owe it to yourself to create a more secure future for yourself as well as your family.

Money isn’t everything, but it is a tool that will make other areas of your life that much easier.

Please do treat your personal finance with the same intensity that you would at your full-time job or business.

It’s one of the most important skills you could master in your life.

I’ve always been a natural saver rather than a spender, which is why I enjoy sharing tips here and there about personal finance that have helped me tremendously.

The vast majority of people for whatever reason have a hard time saving any money at all each and every month.

This is completely understandable with the relentless advertising we are exposed to on a daily basis, grocery bills, children expenses, rent/mortgage, entertainment and hundreds of other reasons.

However, I want you to consider adopting the strategy below that could open up some extra space in your life.

What Is One of The Best Ways To Save Money Quickly?

For some people this will be very difficult and could potentially take a major commitment.

And for others, this may be something you’re already doing naturally or have tried in the past, which is excellent!

Let’s go over two key elements here…

First I want you to be absolutely grateful for everything you have in your life….family, friends, health, nature, food, shelter, water, bed/blankets, etc.

This immediately puts you in a state of mass abundance…but it’s important that you actually feel the gratitude instead of just saying it or writing it down.

Second, I want you to realize that material items do not make you any happier.

Basically what I’m trying to say is break your addiction to purchasing material items.

When I say material items I’m talking about things like electronics/gadgets, clothes, shoes, accessories, new cars and so much more.

Now of course you need some of these things for everyday life, but too many people over indulge in this area and have way more ‘stuff’ than is actually necessary.

Like 30 pairs of shoes, or the latest iPhone when their older version works perfectly fine, or a brand new car because they don’t want to be seen in an old beater (by the way, I own a 2004 Nissan Altima with over 130K miles on it and I love it….simply because I have zero car payments and it’s saved me so much money already that I can now invest).

The over indulgence above results in unnecessary clutter, very little savings and major financial stress.

So I’m really preaching two points here…

• Practicing gratitude for what you already have.
• Limiting material spending quite aggressively (buying things you only really need to survive).

Once you have more of a savings built up (and hopefully are investing any surplus money), you have the option to treat yourself every once in a while.

I’m not saying we should deprive ourselves, but we should realize that material purchases or items do not make us any happier for the most part.

This is one of the best ways to save money quickly and effectively.

Also, it’s important to note that when you start practicing gratitude consistently, you begin to shatter the illusion of constantly needing more.

You realize how fortunate you are to have what you already have and that buying more for the sake of “buying more” holds no value anymore.

You will naturally start living a more minimalist lifestyle, with less chaos, less clutter and more financial freedom.

If this sounds like something you’re willing to try for yourself, do it with full commitment.

You may just be surprised with the results you see down the road…both monetarily and mentally.

The simple life is truly the way to go and this is one of the best ways to save money quickly and almost immediately.

So let me ask, are you already living this type of lifestyle?

If not, are you willing to try?

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.).

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!