Six rules to hit six figures in your bank account in your 20s

“How do you save money? I just don’t know where to start.”

An acquaintance at the gym brought this up to me. I don’t go around giving unsolicited advice. It’s not my job to tell you how to live your life. I blog so that readers can find me. I believe in this person and really wanted to help them. This article is my summary of how you can save huge money in your 20s.

I’m happy to say that I have over six figures worth of savings. I hit this figure in my mid-20s actually. I’m not here to brag. I want to show you how you can have a six figure bank account in your 20s while still having fun.

Six figures in your 20s

What are the six rules to hit six figures in your 20s?

Rule #1: Get into the habit of saving money.

“Everyone wants to live on top of the mountain, but all the happiness and growth occurs while you’re climbing it.” — Andy Rooney

Before you can even buy a pair of shoes or a new iPad, you need to get into the habit of saving up. You have to save your money first. Then you can spend what’s left over. If you don’t put some money aside first, you’re never going to be able to save.

It’s too easy these days to buy things on credit or to spend your money in general. There’s always something to buy. There’s always someone looking to separate you from your money. It’s getting even easier to spend money. Just the other day I went on Amazon and ended up ordering new light bulbs (they have my credit card on file) and another bottle of cologne. I’ve been writing about personal finance for over 8 years now and I still spend money foolishly.

The truth is that you’re never going to be perfect at saving money. Nobody is. The best that you can do is pay yourself first, put your money away, and keep on focusing on making more money so that you can save more money in the long run.

I save money by using The Cancun Technique and I hold on to it with The Houdini System.

Rule #2: Do whatever it takes to increase your income.

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” — James W. Frick

In your 20s you’re likely going to find a decent job at some point. No matter how much or how little you earn, you have to find ways to increase your income. You can never rely on one source of income. You shouldn’t accept your first job as final. You should also never be satisfied with your current pay. You can always increase your income.

I’m all about making more money. It’s way more exciting than trying to save every penny.

Guess what? You can make more money on the weekends and on your time off.

You can start a blog like this or drive for Uber. There are so many ways to make more money. Pick one source and go after it. The trick is that you have to pick one source. You can’t dabble in everything. You can’t post motivational quotes while you sit around waiting for something to happen.

If you want to build up your savings account, you have to do whatever it takes to make more money. You don’t want to be in the same situation for the entire decade.

Rule #3: Invest your money and take risks.

“The biggest risk is not taking any risks… In a world that’s changing really quickly, the only strategy that’s guaranteed to fail is not taking risks.” — Mark Zuckerberg

What got you here won’t get you there. You need to take some risks with your money. There’s only so much that you can do by saving and cutting back. You won’t build real wealth until you start taking some calculated risks. This is what has helped me get to the next level.

There are three steps to financial freedom/money management:

  1. Save your money. You already know that you have to save some of your money. The amount of your money that you save is up to you.
  2. Make more money. I can’t stress this point enough in my writing.
  3. Invest your money to make money off your money. Once you put the work in and build yourself up, it’s time to start investing this money.

I encourage you to read the Studenomics rule for building wealth. You have to hit all three of these. I’ve personally invested into real estate and my own business. Those have worked out for me. If you never take any risks, you’re never going to grow.

Rule #4: Learn from mentors and successful people.

“Spoon feeding in the long run teaches us nothing but the shape of the spoon.” — E.M. Forster

You become the people you surround yourself with. Some variation of this quote has been shared to death as a meme all over social media. You get the drift by now. The challenge lies in actually applying this advice.

I hang out with folks who are better than me at that specific interest. For example, I lift weights with guys who are stronger than me. I take real estate advice from a friend who owns multiple buildings instead of someone who lives at home.

This is one of those tips that feels useless because you either already have an established circle so you don’t need this advice or you’re stuck with loser friends so you don’t know where to start.

How do you start?

  • Join groups and associations.
  • Take classes in something.
  • Be open to feedback.
  • Always ask questions.
  • Read blogs.
  • Read biographies (everything has already been done).

Stop hanging around the same people who bring you down. Try to learn new things and explore different areas of life.

It also helps if you actually listen. I have friends who will get offended when I respond to their questions. They start to argue with me when I tell them what has worked for me. I’m not exactly looking to argue about something that has helped me. Be the type of person that accepts advice. Don’t ignore the advice and then wonder why nothing has changed in your life.

Rule #5: Find ways to have fun on the cheap.

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” — Ayn Rand

All of the financial advice in the world becomes useless if you hate your life. The goal is to enjoy your life while you’re building yourself up.

One of the easiest tricks is to be around activities that you enjoy. You can join a new gym and then find yourself hanging around the place/people more often. You don’t always have to go for an expensive dinner to have fun on the weekends.

How can you have fun on a budget?

  • House parties.
  • Drink before you go out.
  • Treat yourself after a gruelling work period.
  • Try new activities.
  • Earn your fun.

I’ll never tell you to stay in and miss out on life. I might actually laugh at you for staying in. I just know that you have to find ways to keep yourself going without blowing all of the money that you worked so hard to save.

Rule #6: Don’t fall too far off track when you mess up.

“Never spend your money before you have earned it.” — Thomas Jefferson

I have to bring this up because we all mess up. I screw up all of the time. I’m kind of addicted to cologne and going out. I spent more money during the holidays than I care to admit publicly. I enjoy eating out too. Nobody’s telling you that you have to be perfect 100% of the time to save any money. You just have to set financial goals and work mercilessly towards making them happen. It’s okay to splurge.

The trick is to avoid guilt. I actually plan to blow money. I know that once in a while I’m going to go out and spend more than I want to think about. We all have those moments.

These six steps will bring you to six figures in your 20s. I urge you to take the time to go over these steps one at a time. You don’t have to freak out if you’re not following any of these rules. I’ve figured out everything in here the long and painful way. Nothing has ever come easy to me. I’ve never been a “natural.” Start chipping away slowly and you’ll be surprised by what you’ve accomplished when you look back one year from now.

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