A 2021 study by Fidelity Investments shows that a majority of Americans want to save more money than in previous years. The reasons are understandable as many Americans lost their jobs in 2020 due to the COVID-19 pandemic and its impact on the national and global economy.
In fact, there is no age limit when you can start saving money. However, the sooner you start saving, the more likely you are to have a lot of money by the time you retire. In fact, there are many millennials who have managed to save $100,000 or more before reaching the age of 25.
In this article, I will discuss some of the ways these millennials are using to save $100,000 before 25. Whatever your age, you too can use all these tips and increase your net worth in a few years.
Are you also interested in how to save $100k before the age of 25 or would like to start now no matter how old you are? Then continue reading. In this article, I will discuss the best tips that are helping countless people how to save $100k before 25.
Tips To Save $100,000 In 25 Years
These tips are from a variety of real-life individuals—both men and women—who have actually managed to save $100,000 before turning 25. All these are proven methods and valid too. You can customize these to suit your needs.
1. Create a personal budget
The first and most important tip for Millennials who have successfully saved $100,000 before the age of 25 is to create a personal budget. This means carefully listing the various expenses and allocating the correct amount.
If you are going to buy an expensive item or are planning to go somewhere, then include it in your monthly budget. And the trick here is to stick to your budget. This way, you can avoid overspending or even running short of cash when it is needed the most.
2. Find a Side Hustle
The best way to save $100k before age 25 is to find a great side hustle. In fact, about 83 percent of all Americans in the workforce have some type of hustle.
Hence, you too can easily find one. There are a lot of side hustles that you can do online or even offline.
And the money you get from these side hustles can be used to invest rather than spend. You can refer any of the best side business ideas or best part time online jobs and find a side hustle that suits your educational qualification and skills.
3. Downsize Your Life
Downsizing your life isn’t easy. It includes many such things which we take lightly in our daily life. However, if we look closely at our life, we will find that there are many unnecessary expenses in it.
And eliminating them won’t really affect the way we live. Instead, it can save us a lot of money. Downsizing a life also means you have to do without home delivery meals and takeaways or other frivolous expenses that we usually don’t bother about.
4. Get rid of unwanted subscriptions
On average, an American spends over $400 per month on various subscriptions. These include cable TV channel packages, magazines and newspapers, clubs, gym memberships and more.
In most cases, many of these subscriptions go to waste and the subscriptions are never fully utilized. Hence, there is a lot of scope to get rid of these unwanted subscriptions and subscriptions. This will save you a lot of money and get you closer to your goal of having $100,000 saved by age 25.
5. Pay off student loans faster
This may sound like an expense, but it is not. Increase your student loan repayments, within your budget. That’s because student loans can set your life back at least seven years, if not more.
In fact, many important milestones in life such as marriage and buying your own home can get delayed simply because of student loans. In the US, the average student leaves college with approximately $30,000 in debt. This also badly affects your credit score. Therefore, pay off student loans as soon as possible because interest can save you.
6. Pay off the credit card payment in full
Never make a partial payment of a credit card bill. This is because credit cards come with a feature known as the annual purchase rate, or APR. When you buy something on a credit card but don’t pay off the full amount, the issuer keeps adding the APR during each billing cycle. This means, APR collects even higher APR and so on.
Often, you can double or triple your purchase price due to compound APR. Therefore, pay all credit card dues in full to avoid stringent APR repayments.
7. Stay away from vices
Millennials who have successfully saved $100,000 before age 25 have one thing in common. They stay away from evils like alcohol, recreational weed and alcohol.
While consuming alcohol occasionally is not bad and is actually beneficial to health, people who drink excessively can suffer from a variety of problems at work such as poor concentration, which can lead to delays in promotions or pay. Might be possible. There can be no growth.
Additionally, consider how much money you are spending on a few cigarettes a day. It’s easy to let go of these pitfalls and save a lot of money to reach your $100,000 goal before age 25.
8. Start Investing Early
And finally, start investing early, this is the last tip from Millennials who managed to save $100,000 before the age of 25. This is because you can invest small amounts regularly on stocks, exchange traded funds, cryptocurrencies, currencies and commodities. Build a great portfolio.
The sooner you start investing, the better your chances of making profits in the stock, currency and commodity markets and reaching your goal of saving $100,000 by age 25. Nowadays, there are many apps that really help you start your investment journey. , with a minimum of $5. You can use these apps and start investing immediately.
As you can see from these tips from real-life people who managed to save $100,000 before age 25, this goal is very easy to achieve if you’re serious. It just takes a little self-discipline and some micro-budgeting.
Automating your savings by investing in a smart savings plan where some part of your monthly income goes directly to your bank is another way to save a lot of money. Before I end, I’ll add that saving $100,000 before age 25 isn’t as dreamy as it may seem. It is possible and thousands of Millennials are doing it.