According to CNN Money, the average net worth for those between 25-34 is $9,000. I played around with a calculator on CNN Money, and I discovered that the median net worth for someone that’s 24 (my age) is $1,475. Then when you hit 25, the median net worth becomes $8,525.
I don’t know about you but that’s a pretty low net worth if you asked me. My goal is to put more money in your pocket. This means that I want you to increase that damn net worth so that you’re ahead of the average person.
I want you to have the highest net worth possible at an early age!
What are the three steps to save huge money in your 20s? How can you increase your net worth to $25,000 or any other number?
Pay yourself first.
I’ve written about how you can save tons of money by paying yourself first many times on here. The process is simple and I’ll outline it again:
- Go to your payroll department or you bank.
- Ask to have X amount of dollars automatically deducted every paycheck.
- Leave the money alone. Let it grow.
- Enjoy life without stressing about money. Get wasted. Have fun.
You don’t have to budget your money to the exact dollar. You just run the numbers to see what your expenses are. Then you should try to figure out how much money you want to spend on going out and life. Then you’ll be able to think of a dollar amount that you’re happy with.
For example, you can start off with $50 every two weeks. Then you increase it by $25 until you hit a sexy target. Then you just get used to not earning this money.
Reset to zero.
Now you have to reset to zero. How do you do this? Put your money away and pretend you have nothing. At this point, you put your savings away so that you can’t easily access them. You have to build your net worth again!
Where can you put your money? I would recommend Capital One 360.
What happens when you reset to zero?
You now have to pretend that you don’t have any money. The money is still yours. You just can’t easily touch it. I do this because it makes me feel a sense of desperation that forces me to work harder.
How can reseting to zero work for you?
You’re forced to work and build your savings up once again. You can’t rely on your savings. You can’t feel comfortable. You have to be on edge and ready to make more money.
The next step in increasing your net worth is pretty common…
Increase your income.
Next you have to increase your income. You can start an online business, look into freelancing, ask for a raise, find a new job, or even work a part-time job.
The more money you make, the more money that you can save. This will help you increase your net worth to a nice juicy number that impresses the girls (okay maybe not).
What’s next? Keep on going. Why stop? There are no shortcuts here. The best part is that this whole process is VERY hands-off. You don’t have to think about money every day. In fact, you can spend less than an hour a month on your finances. You can actually enjoy life!
Before we part ways…
How to calculate net worth will depend on your situation and what sort of investments you’re involved in. If you get a little complex and start placing your money into stocks, real estate, and other tools, it’s going to be a bit more challenging to figure out your net worth. If you have your money in a CD or a savings account, it’ll be much easier to see how your net worth is doing.
One final note on your net worth is that your student credit card debt could be holding you back. If you’re not happy with your current net worth, it’s likely that you need to kill your debt.