I know you want the dirty details but I want to start out with a disclaimer. This is not financial advice, just my personal experience. Anything mentioned here is purely for educational purposes only and does not consider your own unique situation.
What's mentioned below is by no means comprehensive, nor is it the absolutely only way to get to where I am. I encourage you to do your own research, evaluate your own situation, and decide for yourself what's best for you. I just want to arm you with knowledge, not boss you around!
Boring stuff out of the way, now onto the information!
What I Did
The hands-down biggest advantage I had in reaching this goal was being able to live at home for as long as I did. Not everyone has this luxury so I won't harp on it too much, but if you are safe and supported, I highly encourage doing so, and put money away every week/month/whenever you get paid.
This leads perfectly to my next tip for saving up: set up either a direct deposit straight into your (high yield! more on that in a minute) savings account, or an auto withdrawal from wherever your paycheck gets deposited, as soon as possible after payday. You know what they say, out of sight out of mind, and if you forget about that money while it sits in a savings account where you aren't seeing it, it eliminates the temptation to "splurge" when you don't really need to. Now, about that savings account. It is SO critical that you find a high-yield savings account to keep at least some of your savings in. You want your hard-earned money to earn a couple of dollars a month, not a few cents. In August alone I earned $13.25 in just interest, on top of what I was already putting away. It's a small amount of money but it's zero effort, zero risk. At the end of the post I'll link the one I use, along with other resources.
When I have the time and energy, I also do some side hustles. Nothing high paying or high commitment, just things like surveys, rewards/cash back programs. It's small amounts of money here and there, but it really adds up over time. If you save every $5 you earn every weekend doing gig work, surveys, or focus groups, you'd have $260 by the end of the year. Every single dollar will make a difference in the long run, so don't feel like any amount is too small. Every drop of water has the power to break through rock. Don't get discouraged.
Where I Went Wrong
I am the first to admit that I am FAR from perfect. I did not do everything I mentioned above perfectly, or as often as I liked. I have severe ADHD, so impulse control is a problem for me. I am wont to make irrational choices on a whim. I definitely could have hit this goal a lot sooner had I made some different choices. For starters, I did NOT need that $600 Versace swimsuit. I just didn't I don't care how cute I look in it, not worth it. I also managed to rack up a decent amount of credit card debt, which I'm working to pay off. But I always pay myself first, because I'd rather build up a safety net than just keep myself on the hamster wheel that is the debt cycle.
I also started an investment account way before I needed to. I had NO business sinking $1000 in the market when I did. What's done is done now, but if I had to do it again I'd have at least 6 months of emergency money saved before starting a dividend-earning account.
My main vice though is going out to eat. Did I need to go to Chipotle twice, to Taco Bell, and happy hour with a coworker all in the same week? No. Did I still do it? Yup. Bad call. I really should be limiting myself to once a week, but I'm still working on it.
I'm definitely not of the camp that while you're saving money you can't have any fun or make any frivolous purchases, just be mindful of how often you do them so it doesn't majorly hinder your goals.
What's Next?
You might be wondering what I'm doing now that I have a whopping 10k in my bank account. I'm going to keep saving! I'm actually going to up the amount that I direct deposit into savings, to really crank up my timeline for hitting my major goal. Where I live, I'd have to have $30,000 saved to pay my bills for a year without working. Mind you this is bare bones, no frills, but I could survive if I needed to. That's my next savings goal, and top priority for the moment.
Next is my investment account. I only add $10 a month, but it's something. I want to up that to $15. The goal for this account is to earn dividends, to buy more stock, to earn more dividends, to buy more stock, to someday slowly sell off when I either want to make a big purchase or am going to retire and need the liquid cash for security purposes. I use a strategy called dollar cost averaging, meaning I buy a set amount of stock in a set time frame and stay consistent. I will keep this up, just with more money. And eventually, when I hit my 30k goal I'll increase it even more.
Finally, I have my Roth IRA. A Roth IRA is an after tax retirement account that people who earn under a certain limit qualify for. It's a brokerage account where you can invest a limited amount of money each year and it can grow tax-free, and after a set amount of time, you can withdraw the money tax-free as well. I was previously adding $20 a month to that account but now I'm upping it to $30, for the same reasons mentioned above, faster growth, and so on. And once I hit my 30k goal I'm going to really hammer down on this account so that there's more money with more time to grow for when I retire someday.
And that's it. How I got here, the mistakes I made along the way, and my plans for the future. I know it's a lot of info. But like I said before, my way is not the only way, and there are so many paths to get to this point. It is possible, you can do it. Just put one foot in front of the other, one step at a time., you'll get there. And you already did the hardest part, starting!
Below are links to accounts and services I use to make, save and invest money, as well as some resources I use to help make my personal finance decisions.
Resources
Affiliate/Referal Links when applicable.
High-yield savings account: Marcus by Goldman Sachs (we each get a 1% APY referral bonus if you use this link! Terms & Conditions apply)
Roth IRA: Marcus By Goldman Sachs
Side Hustles/Rewards programs:
Receipt Hog code: spap7733
General Resources:
Comments