A show of hands, who wants to be rich? I’m going to assume you probably raised your hand. Money is one of the leading factors of stress, so who wouldn’t want to not have to worry about it, right? I’m right there with you, friends! We have aspirations to be successful and make lots of money so that we can have all of the luxuries life has to offer. But what if I told you that you can start your journey towards those goals today? Whether you’re still in university or trying to navigate your way through the working world, I can tell you from my own experiences that it is absolutely possible to save thousands (yes, you heard me, THOUSANDS) of dollars per year!
Here I have compiled a simple list of tasks that will help you as a young adult to potentially save a lot of money. I do want to note that if you’re someone who tends to want to spend all of your earnings, I warn you that this journey will be challenging at first, but I know that you are strong enough to get past the initial obstacles and create a more balanced life for yourself with healthier spending habits! Want to learn how? Just keep on reading, friend!
1. Figure out your end game.
This can relate to money as well as other areas of life, but where would you like to see yourself in the future? What lifestyle will make you feel fulfilled? Are you someone who aspires to own a mansion as well as a vacation home in the Bahamas? Or are you more comfortable with a modest home with minimal possessions? Neither answer is wrong, and both are absolutely achievable if you really set your mind to them! The trick here is realizing what your goals are and what you need to do financially to achieve them. Set SMART goals (more on that here if you don’t know what I’m talking about) for yourself at different stages of your life, and then work towards them! What financial goals do you hope to achieve in the next five years? Ten years?
2. Open a high interest savings account.
Let me just say, this has been a god send for me personally! Up until October of last year, I had never had a savings account. The thought of this now seems so bizarre to me, as I could have been saving so much money over the years, but I’m so glad I decided to go into the bank and open an account that would be of benefit to my personal situation.
A high interest savings account basically adds monthly interest to the balance in your account at a higher percentage, meaning you’re profiting just by having money in the account! The more money in the account, the more you’ll make from it each month. One of the things I find useful for those who find it hard to save money is that if you want to take money out of the account, there is a slight fee for it. For me, I want to save money wherever I can, so this is just more incentive to keep the money where it belongs until I decide to use it for something of more value than just buying my morning coffee.
When I was working for a regular monthly paycheque, I made a plan that any money that I hadn’t used in my chequing account the previous month I would put into my savings account once I received my next paycheque. This worked extremely well, as I was able to save quite a bit of money each month! Now that I’m not receiving a regular paycheque, however, I have found this saving system difficult to continue with. That being said, I have decided on a set amount per month that I can afford to put into my savings account and am thinking of that kind of like a “bill payment”. That way, I’m still putting money in every month while still having money to live.
3. Invest in your future.
This is still something I’m in the process of figuring out. I’ve held a lot of confusion and misunderstanding about this topic in the past, but luckily I have people in my life who have a lot of experience in this area to guide me through the process! People always talk about investing your money, whether that be in stocks or real estate or whatever. While I am aware that this is an incredibly important thing to do if you want to grow your finances, I have always held a weary feeling about it. I’ve heard so many stories about people losing billions of dollars from bad investments, which scared me out of even exploring the idea of it.
I’ve learned that the key to investing is having knowledge about the investment you’re considering, and not investing more than you can afford to lose. You won’t lose more than you put in (something I had a misconception about), but you need to be prepared to lose that money and still be financially stable. I am not currently in a place where I can afford to invest my money, but I’m definitely starting to look into it and learn as much as I can about it so that when I am able to afford it I will be prepared and knowledgeable. This is something I highly recommend for others in a similar situation to myself. Even if you can’t invest right now, start learning about investing. Do your research so that you’re ready when the opportunity does come.
4. Keep track of your finances.
Believe it or not, I’m not actually someone who keeps every receipt or writes down everything I spend money on in a finance book. I’m absolutely not saying there’s anything wrong with that method, and if you’re someone who is on top of their finances that way, kudos to you, friend! Teach me your ways so that I can be even better with my money than I already am, haha. I do, however, check my balance in my accounts on a weekly basis and keep track of my regular payments. I also always keep it in mind when I spend money how it will affect my balance and if I can afford it. I’m very conscious of my credit balances and paying them off on time and in full whenever possible. These things together help me to stay on top of my financial situation, which in turn helps me to save money (because spending guilt is a real thing, haha).
5. Cut out unnecessary costs.
Don’t watch television? Then why are you paying for cable? Do you need to eat out every day, or can you bring a lunch and then cook dinner at home? We all have decisions to make about our spending on a daily basis. There will always be the necessary costs, like bills or transportation, but you and I both know that we don’t need the $6 coffee every single morning. Maybe make coffee at home and then treat yourself one day a week (I’ve always liked treating myself on Fridays to celebrate the end of the week lol).
My point here is that there are small lifestyle changes that you can make to actually save you a ton of money! It might not seem like much individually, but if you spend $15 per day on food, that’s $105 per week, about $420 per month, and approximately $5040 per year! You could be saving so much of that! It just goes to show you that the little things really do add up. Absolutely, treat yourself, but don’t make a habit of it.
6. Pay off debt as quickly as you can.
If you’re someone who tends to spend all of the money you have, then I’m sorry to say this, but credit cards are not your friend. While building credit is important and there is a lot of appeal to credit cards, you’re not doing yourself any good if you rack them up and then can’t pay them off. The number one thing I want you to take from this: credit and loans are NOT free money. You have to pay them back, and the longer you take to pay them back the more interest will build up on your balance. With credit cards especially, interest rates are extremely high, so it’s best to pay them off completely each month. Don’t use them for more than what you can afford to pay off that month.
I also want to talk about student loans. Obviously, this isn’t something that most people can just pay off overnight. That being said, there are steps you can take, even when still in school, to make the paying off process easier. Over my four years of my undergraduate degree, I was able to save thousands of dollars just through the methods I’ve talked about here. When it came time to start paying off my loans, I was able to put a lump sum down to bring down my balance significantly, just using the money I had saved while in school! I plan to make a yearly lump sum payment on my loans and have a goal to have them completely paid off in five years. No debt is good debt, so the faster you can be back in the positive numbers the better! And I recommend never putting yourself into more debt with another big investment until you have all of your current debt paid off.
Do you have any tips for budgeting and saving money that I missed? I’d love to hear your ideas in the comments! Also, I’m curious to know what your biggest obstacle is when it comes to budgeting!
Thank you so much for reading! Be sure to check out my previous post, How to Deal with Job Rejection: Quarter Life Crisis Confessions, and be sure to join the dream team to receive access to the free resource library for all of your adulting needs!