Do you want to save money? Do you want to see that savings account get fatter?
Most personal finance writers have some emotional story about how they got started with money management. The story is a bit too common. They usually got into serious amounts of debt and then realized that they needed a way out. Then they took control of their lives. They slowly got out of debt and started saving money.
Not me. I’ve always just been greedy. I’ve always worked hard to save money. I’ve always wanted to get ahead.
Why would I want to be broke? That’s how I’ve always looked at it. I’ve never been afraid of work because the thought of being broke scares me.
Why would I spend money that I don’t have? I never understood credit card debt. I used my student credit card to build up my credit at a young age. I believe that if you don’t have the money, you shouldn’t spend it.
This leads me to my grand point of the day. I recently hit my biggest financial goal. I wanted to have $25,000 saved in a regular savings account before I turned 25. I hit this goal this past week, many months before my 25th birthday (December 26 for those of you that want to get me something).
This figure doesn’t include the money that I invested into my condo, education, or on trips. I’m not here to show off though. I just wanted to stop using hypotheticals and give out a real number.
The good news is that I’m nobody special. I’m a normal dude that just isn’t afraid of work. Every single one of you reading this can save X amount of money if you really want to. I’m going to show you how…
Let’s take a step back together first.
What are the pros of saving money in your 20s?
- Save for the future. While Drake promotes spending it all while you’re living, in reality he has way more money than the average person. The main benefit of getting into the habit of saving money is that you’ll have money for the future for when you want to buy a home or get married (yes you will get married Mr. Player).
- Do cool things. When you have money saved you can do lots of cool things. I’ve been able to travel the world and throw a pretty expensive surprise party for my parent’s 25th wedding anniversary. Without money saved, you miss out on lots of cool things.
What are the cons of saving money in your 20s?
You can miss out on life if you don’t find balance. Trust me. It’s easy to get lost. You start working, you see your savings account growing, and suddenly you forget what day or even what month it is. Next thing you know, you’re 30 years old and single. My biggest concern with focusing on money is balance.
I must confess that I’ve lost balance many times and neglected people who I shouldn’t. My only tip is to do your best to find that balance. Don’t lose balance like I have far too many times (this past summer for example).
The other con is that you’ll potentially miss out on investing in yourself. I have friends that managed to save a ton of money. The only problem is that it was at the expense of their education. They chose to avoid college and opportunities to invest in their skills because they wanted to save every penny. Not wise if you asked me.
Now it’s time to get into the juicy stuff…
How can an average person save money in their 20s?
Work like a single mom with two kids. You can’t be afraid of work. Nobody ever drowned in sweat. Just because you’re 24 it doesn’t mean that you can’t work like a 32-year old lady with two kids.
How can you work like a single mom with two kids?
- Work weekends.
- Work holidays.
- Pick up extra shifts.
- Find a part-time job.
As you can see, there are no shortcuts here. Sorry. One of the best ways to save money will always be to make more money.
Diversify your income. If you have a stable 9-5 job, that’s cool. You don’t have to sell your possessions and follow your passions. You can continue working and find a weekend/evening gig. You can also start an online business as I often suggest. The trick is to find ways to make more money.
You can also start freelancing now. Truthfully, freelancing has greatly helped me with my savings. If you want to see immediate results, you need to grab your copy of my premium guide on freelancing. Don’t be cheap. Support the cause!
Save money on your college tuition. The biggest hurdle to saving money in your 20s is dealing with student loans that just won’t go away. If you’re young enough, you need to check out my article on saving money on tuition. If you’re already in debt, it’s time to crush those student loans.
But Martin… saving money is too damn difficult!
I agree. I usually suck at saving money. I spend like crazy. I can’t prioritize. I spend money on things I absolutely don’t need. I can’t separate needs from wants.
I couldn’t save any money until I applied one KEY tactic that will help every single young person save. What’s this tactic you ask?
You must absolutely pay yourself first.
That’s the only way you’ll ever save money. The process is really simple and requires no work at all after the initial setup.
How can you pay yourself?
- Go to your employer or bank.
- Ask them for automatic deductions from every pay check.
- Pick a number you’re comfortable with. You can start off with $50 every two weeks. This will equal $1,300 in passive savings per year.
- Watch your savings account grow.
- Spend the rest of the money on stupid crap.
- Increase your savings as your income grows.
[I highly recommend using Capital One 360 for your checking/savings account. You can sign up right now and get $50 for free.]
Is this super secret guide for everyone?
Not at all. Saving money has many pitfalls and won’t work out for everyone. You have to be willing to do the following:
- Sacrifice. You can have anything that you want. You just can’t have everything that you want. You’re going to have to lose out and miss out once in a while to get ahead.
- Miss a few parties. You’ll eventually miss out on a few parties and social events. There will be times where you want to go out but you’re stuck at work. I won’t lie, this sucks. The only way to get through it is to think of something that you have to look forward to. It really helps to have a supportive partner.
- Drink lots of vodka and be the centre of attention. Hey, after a long week, a man needs to let loose.
If you do attempt to join in on this, then I salute you my friend. If this strategy isn’t for you, that’s cool then. Just keep us updated of what your plans are.
Are you going to save money? Are you ready to take control of your savings?
20 thoughts on “Martin’s Super Secret Guide to Saving $25,000 by 25”
Nice motivational article Martin. It’s a great opportunity to work extra hours and hold a variety of jobs while you’re a younger adult and save your extra income, as it’s a time when you have so much more energy and stamina to handle the extra hours.To have saved 25k by 25 years old is a great achievement.
It’s amazing how much energy you have in your 20s. It’s far too easy to waste this energy on watching tv all day.
I’m the same way you are as far as never really being in debt and trying to do the best for myself as possible. Congrats on achieving your goal and keep up the good work!
Thanks for the visit Lance. What has motivated you to stay out of debt?
I don’t see any need to incur any as I live well below my means. Hopefully early financial independence will be a nice benefit!
Congrats on your savings milestone MD!
Any plans to blow some of it on something fun and big? Perhaps an investment or something?
25K is a nice chunk of change!
Thanks for the visit. What would you recommend? I’ve gone on three trips this year and would love to go on another one by the end of the year.
HEY MD! I heard you wanted to bring all your friends on a free vacation with all that money. 😉
Or perhaps replace the camera of a friend after throwing them into the pool!
Great tips for everyone looking to lay their own strong financial foundation. So now that you have 25k, what will be your next step? Will be back to see!
Next time will likely involve taking some risks with time and money. I’ll definitely keep you guys updated.
I also never understood why you would spend money you don’t have, especially via a credit card. On top of that, I can’t understand how most people justify PAYING for a credit card. Are the rewards really worth it? I feel if I was paying for a credit card, I’d be more motivated to use it and have a bigger chance of paying for something I didn’t need or didn’t have the money for.
Hey Brian, you bring up an excellent point about credit rewards. While they can be worth it if you know what you’re doing, they can really screw you over. Most of us just don’t know enough about credit card rewards to maximize them. It can be another excuse to spend more money.
I loved this post. I must admit at 24 I have difficulty saving huge amounts of $. Saving $3,000 or $4,000 was easy, but this was with a goal in mind, paying for a nice place to live, or buying a car. Now that I have that I always put aside $2000 for emergencies but this doesn’t really add up. I just recently opened a savings account and my #1 rule is, treat that money as NON EXISTENT. If I touch it I know I will suffer in the end. Since This is my first year taking out student loans I’m already at a panic seeing my loan for 2 years reach up to $36,000. This is with me not even going to a extremely known school, just an exceptional and respectable school for my field. It’s great to get some advice and a little reminder that it’s possible to save up money and still balance out life. Working FT,running a weekend side business, and studying FT means I have to make time for those I care about and even though sometimes that’s hard I’m glad they seem to understand why I have to “sell out” sometimes.
Woohooo!! What an awesome feeling!
I have recently gotten into finances and reading different blogs, I’m quite enjoying yours!
I’m currently 22, paid off $47,000 of student loans last year and now have $35 000 in savings!! I did it all my self with no help from anyone. I’m addicted to saving! I never realized until I started. I’m now going back to school without having to get student loans and still enjoying life (going to Europe in April!!)
For me I found the biggest thing was working like a dog (for my first year our of school I was averaging 28 shifts a month) and really limiting excess spending.
Looking forward to more posts!
Thanks for visiting and leaving a comment. Your numbers are pretty damn impressive. How did you manage to save all that money?
It’s a good feeling =) Now planning on spending some of it. I always said traveling could never be considered ‘wasting’ money. We are going to Europe for two weeks in April and doing a month long backpacking trip thru Peru and up Costa Rica including the Inca Trail in Sept!!! Super excited.
I have a good paying job for my age and pick up extra shifts whenever I can. I also have a side home business that I like to do on my down time. It definitely adds up.
Now I need to learn more about investing and such.. definitely clueless there.
I love to hear stories like this…
Yeah it’s funny how many people view trips as a waste of money. I used to think like this. Then I had the time of my life on a trip to Cuba and have never looked back since.
You didn’t ask, but you mentioned learning about investing. My suggestion is simple:
Invest in yourself. Buy books, learn more skills, learn a language, travel, and do anything possible to become a better YOU. This will pay off better than any stock in my opinion.
Wow look at all the comments!
If only I could pull this off. I have a 9-5 job which is great, but personally, for me, I don’t think it would be wise to work more than that. I was going to write a lot but I don’t want to delve into my personal life on your blog. So I’ll just say this: Aside from saving money (which I read your other blog on) and sacrifice, any other good tips aside from working like a mad dog? 😛