PUBLISH FIVE | TIPS
How I Saved $100k By 24 (Plus My Money Saving Tips)
“Do not save what is left after spending but spend what is left after saving” — Warren Buffet
A few years ago at the age of 24, I reached a significant financial milestone: $100,000 in savings and no debt.
Saving that much money was not easy. However, I was fortunate enough to have a mother who stressed the importance of financial literacy from a young age. She encouraged me to always live below my means, to stick to a budget and to be frugal. “If you don’t need it, don’t buy it”, she often tells me.
Some people find it difficult to save. In reality, it’s not. There are two main ways of saving a lot of money in a short period of time and it’s done by either: increasing your income or decreasing your spending (or both). Here’s how I saved $100k.
1) I Had a Head Start
Growing up, I did not receive a lot material goods for my birthdays, Christmas or other special occasions. However, I did receive a lot of monetary gifts from friends and relatives. Unbeknownst to me, my loving mother was hoarding and depositing all that cash into a bank account she had opened in my name. By the time I started working, I already had around $2500 in savings.
2) I Worked A lot
I first worked as a Cart Pusher at Home Depot as a teenager and it paid $11/hour. Over the next couple years, I worked various jobs from retail, security, customer service and office work. No job was beneath me. After graduating university, I often worked two jobs, which allowed me to earn and save more.
3) I Lived At Home
At 24, I was still living at home, and while some people may find that laughable, it was honestly the best financial decision I’ve ever made.
My Asian parents instilled in me their traditions and mindsets. Filipino culture is deeply rooted in collectivism, and parents will often encourage their children to only leave home when they get married. I was happy to be in a situation where I could save and also spend quality time with my family, time that cannot be replaced.
4) I Kept My Expenses Low
Here are a few examples of how I cut my expenses to save more money:
- I attended a local university as a domestic student. I also applied for a government grant that paid off 30% of my yearly tuition.
- I rarely ate out and cooked at home.
- I befriended introverts, teetotalers and other frugal people. Our hangouts consisted of playing games at one’s house or going to cheap places for leisure and recreation.
- I commuted or walked everywhere.
- I embraced minimalism and only bought what I needed.
- I didn’t get into a committed relationship.
5) I Invested Most of My Money
Investing is an effective means of building wealth and generating future income.
I’ve invested most of my money on a Tax Free Savings Account (TFSA) and a Guaranteed Investment Certificate (GIC), both of which yields guaranteed returns. I receive a couple thousands a year when my investments mature and I didn’t even have to do anything to get that money.
My Money Saving Tips
Knowing your expenses and creating a budget are the first steps to saving money. Afterwards, you should aim to identify ways to reduce your expenses. Here are some of my money saving tips:
- Increase your income but live below your means.
- Avoid unnecessary purchases. If you’re not sure you need it, don’t buy it.
- Implement the 50/30/20 rule: 50% on needs, 30% on wants and 20% towards savings. For me, it’s 35/5/60.
- Don’t compare yourself to others who are materialistic.
- Switch to cash only as it allows you to keep closer track of your spending.
- Invest in stocks, mutual funds, real estate or other diverse assets.
It is often said that the first $100k is the hardest to save because it requires discipline and consistency. However, saving becomes easier as you continue to build your career and income, develop good financial habits and pay off debt.
