Do you want to save money? Do you want to see that savings account get fatter?
Most personal finance writers have some emotional story about how they got started with money management. The story is a bit too common. They usually got into serious amounts of debt and then realized that they needed a way out. Then they took control of their lives. They slowly got out of debt and started saving money.
Not me. I’ve always just been greedy. I’ve always worked hard to save money. I’ve always wanted to get ahead.
Why would I want to be broke? That’s how I’ve always looked at it. I’ve never been afraid of work because the thought of being broke scares me.
Why would I spend money that I don’t have? I never understood credit card debt. I used my student credit card to build up my credit at a young age. I believe that if you don’t have the money, you shouldn’t spend it.
This leads me to my grand point of the day. I recently hit my biggest financial goal. I wanted to have $25,000 saved in a regular savings account before I turned 25. I hit this goal this past week, many months before my 25th birthday (December 26 for those of you that want to get me something).
This figure doesn’t include the money that I invested into my condo, education, or on trips. I’m not here to show off though. I just wanted to stop using hypotheticals and give out a real number.
The good news is that I’m nobody special. I’m a normal dude that just isn’t afraid of work. Every single one of you reading this can save X amount of money if you really want to. I’m going to show you how…
Let’s take a step back together first.
What are the pros of saving money in your 20s?
- Save for the future. While Drake promotes spending it all while you’re living, in reality he has way more money than the average person. The main benefit of getting into the habit of saving money is that you’ll have money for the future for when you want to buy a home or get married (yes you will get married Mr. Player).
- Do cool things. When you have money saved you can do lots of cool things. I’ve been able to travel the world and throw a pretty expensive surprise party for my parent’s 25th wedding anniversary. Without money saved, you miss out on lots of cool things.
What are the cons of saving money in your 20s?
You can miss out on life if you don’t find balance. Trust me. It’s easy to get lost. You start working, you see your savings account growing, and suddenly you forget what day or even what month it is. Next thing you know, you’re 30 years old and single. My biggest concern with focusing on money is balance.
I must confess that I’ve lost balance many times and neglected people who I shouldn’t. My only tip is to do your best to find that balance. Don’t lose balance like I have far too many times (this past summer for example).
The other con is that you’ll potentially miss out on investing in yourself. I have friends that managed to save a ton of money. The only problem is that it was at the expense of their education. They chose to avoid college and opportunities to invest in their skills because they wanted to save every penny. Not wise if you asked me.
Now it’s time to get into the juicy stuff…
How can an average person save money in their 20s?
Work like a single mom with two kids. You can’t be afraid of work. Nobody ever drowned in sweat. Just because you’re 24 it doesn’t mean that you can’t work like a 32-year old lady with two kids.
How can you work like a single mom with two kids?
- Work weekends.
- Work holidays.
- Pick up extra shifts.
- Find a part-time job.
As you can see, there are no shortcuts here. Sorry. One of the best ways to save money will always be to make more money.
Diversify your income. If you have a stable 9-5 job, that’s cool. You don’t have to sell your possessions and follow your passions. You can continue working and find a weekend/evening gig. You can also start an online business as I often suggest. The trick is to find ways to make more money.
You can also start freelancing now. Truthfully, freelancing has greatly helped me with my savings. If you want to see immediate results, you need to grab your copy of my premium guide on freelancing. Don’t be cheap. Support the cause!
Save money on your college tuition. The biggest hurdle to saving money in your 20s is dealing with student loans that just won’t go away. If you’re young enough, you need to check out my article on saving money on tuition. If you’re already in debt, it’s time to crush those student loans.
But Martin… saving money is too damn difficult!
I agree. I usually suck at saving money. I spend like crazy. I can’t prioritize. I spend money on things I absolutely don’t need. I can’t separate needs from wants.
I couldn’t save any money until I applied one KEY tactic that will help every single young person save. What’s this tactic you ask?
You must absolutely pay yourself first.
That’s the only way you’ll ever save money. The process is really simple and requires no work at all after the initial setup.
How can you pay yourself?
- Go to your employer or bank.
- Ask them for automatic deductions from every pay check.
- Pick a number you’re comfortable with. You can start off with $50 every two weeks. This will equal $1,300 in passive savings per year.
- Watch your savings account grow.
- Spend the rest of the money on stupid crap.
- Increase your savings as your income grows.
[I highly recommend using Capital One 360 for your checking/savings account. You can sign up right now and get $50 for free.]
Is this super secret guide for everyone?
Not at all. Saving money has many pitfalls and won’t work out for everyone. You have to be willing to do the following:
- Sacrifice. You can have anything that you want. You just can’t have everything that you want. You’re going to have to lose out and miss out once in a while to get ahead.
- Miss a few parties. You’ll eventually miss out on a few parties and social events. There will be times where you want to go out but you’re stuck at work. I won’t lie, this sucks. The only way to get through it is to think of something that you have to look forward to. It really helps to have a supportive partner.
- Drink lots of vodka and be the centre of attention. Hey, after a long week, a man needs to let loose.
If you do attempt to join in on this, then I salute you my friend. If this strategy isn’t for you, that’s cool then. Just keep us updated of what your plans are.
Are you going to save money? Are you ready to take control of your savings?