Have you ever wanted to save a ton of money but you can't seem to figure out where to start? Well I'm going to tell you just how you can do it.
I saved over $100,000 right out of college over three and a half years all while earning less than 6 figures ($54,000 to be exact) and if I could do it so can you. Saving $100,000 might seem like a daunting or extremely long term task however, it's really not that difficult to do it in a few years with a solid plan in place.
"Saving $100,000 might seem like a daunting or extremely long term task however, it's really not that difficult to do it in a few years with a solid plan in place."
Let's talk about how you can get started and get on the path to saving $100k over the short term even if you don't make six figures.
Start contributing to your retirement accounts
One of the best ways to get started with saving (and investing) your money is by contributing to your retirement account. If you are employed and your employer offers a retirement savings plan, start contributing to it and if possible max out your contributions (The allowance is $18,000 in 2017). In addition, if your employer offers a contribution match, make a plan to at least contribute enough to get the full match which is essentially free money.
If you are self employed, you have the option to set up an IRA. Start contributing to one and again if possible max out your contributions (The allowance is $5,500 in 2017). To save even more, you have can both an employer sponsored retirement account and an IRA.
Given the historical performance of the stock market, your continued contributions could easily equal millions of dollars in savings over the long term.
I was able to save $40,000 in my 401k within the first 3.5 years after I graduated from college and at the time I was not even fully maxing out my contributions and I had not yet opened an IRA account.
Create a budget every month, keep your expenses low
Sticking to a budget and keeping your expenses low is a major factor when it comes to your savings success. The goal of your budget is to help you track your income and expenses so you don't spend more than you earn.
Also by tracking your actual spending against your budget, you'll be able to see exactly where your money is really going and where you can possibly cut back or what expenses you can eliminate completely. To be successful with budgeting, plan to create one in advance of every month since no two months are exactly the same.
While I was saving my $100k using a budget allowed me to save 40-50% of my income each pay period. I also used my budget to keep my expenses as low as possible. I had a strict grocery budget, kept my utilities expenses low, didn't drink any alcohol and while I still participated in the social scene with my friends, I didn't over do it as nights out can get very expensive.
Doing a combination of these little things allowed me to save ~$50,000 in cash over the 3.5 year period.
Start a low cost side hustle
Starting a side hustle that doesn't cost a lot of money to set up is a great way to earn some extra income to boost your savings. I started a photography business towards the end of the 3.5 years when I was saving my $100k.
I was completely self taught and started out by taking photos for free but it quickly turned into a profitable venture. With my earnings I paid taxes, reinvested money into my business and saved the rest.
My first year in business as a photographer I earned around ~$10,000, my second year I earned ~$30,000.
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"It is entirely possible to save a large amount of money but it starts with the right mindset and a solid plan"
Saving a large amount of money in a short amount of time is entirely possible but it starts with creating a solid budget, keeping your expenses low, saving as much as you can, staying focused and most importantly being disciplined and consistent.
Do you have any major savings accomplishments? Share what is is and how you did it in the comments section below!
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