How I Saved $100,000 At 26 Years Old
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My journey to my first $100k was a quick one, quicker than I ever imagined. I managed to save $100,000 in two years at age 26. I know this year was rough for many, and I was hesitant to share this news but if it wasn’t for me reading about other blogger’s financial goals I would’ve never set or achieved such a massive goal myself.
I believe that the secret to achieving your goals consists of 40% mindset, 40% time and 20% hard work. You can’t just wake up one day and have $100k saved. You have to let the time pass, consistently believe you can achieve it despite any obstacles, and work hard to budget and save that money. So whether it takes you 1 year, 5 years, or 20, your first $100k is coming sooner than you realize!
So how did my journey start?
Three short years ago, I had just started real estate and was living commission to commission, earning $27k my first year. I persisted and ended up buying my very first house two years later, at age 25. After reaching that financial milestone I set a goal to save $100k.
Here are the top 5 reasons I managed to save one hundred thousand dollars by age 26.
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I Only Lived In States With No Income Taxes
I’ve never paid income tax since graduating from college. Many people overlook this when they’re deciding to relocate but it has honestly played a huge role in my savings. Income taxes can affect your savings progress on a large scale and I’ve been lucky to avoid them since graduation.
I took my first job in 2016 as a civil engineering consultant in Seattle, Washington. I stuck it out there for one year before switching careers to real estate and moving to Florida, another no income tax state.
There are actually only 7 states with no income taxes so I understand this isn’t feasible for everyone but it’s worth considering during your next move! There is no state tax in “Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee don’t tax earned income either, but they do tax investment income”
I Always Had A Roommate
I’ve never lived without a roommate. When I lived in Seattle, I lived with four other women and paid $800/mo in rent. If you’re in a high cost of living city, I would encourage you to consider getting a roommate or moving in with your family if possible. Many people seeking F.I.R.E (Financial Independence, Retire Early) live with their parents to cut their costs down.
Living expenses tend to be people’s highest cost and they can really eat into your savings.
When I moved to Florida, I moved in with my boyfriend which has allowed us to split utilities, groceries and the mortgage. This is a huge monthly savings for both of us.
If you don’t know how to find a roommate, check out roommates.com or a local college Facebook group.
I Decreased My Grocery Bill
It’s easy to get carried away when grocery shopping and this can dwindle your savings significantly.
We usually spend anywhere between $400-600/mo on groceries for two adults, a cat and a dog. A few years ago we were spending even less, but now we are opting for healthier and more organic options.
My top tips for saving money on groceries would be to use a list, don’t shop when you’re hungry, and utilize cash back apps like Fetch Rewards.
I Looked For Ways To Earn More Rather Than Save More
The fastest road to saving your first $100k is to start earning more. There’s only so much I could save when I was earning $27k. I needed to increase my income significantly.
Don’t be afraid to job hop. In fact, “Workers who stay with a company longer than two years are said to get paid 50% less, and job hoppers are believed to have a higher learning curve, be higher performers, and even to be more loyal…”
Do some research, are you getting paid what you deserve? If not, then ask for a raise using these tips. Explore other careers you might be good at, or get a lucrative side hustle.
Read: 47 High-Paying Side Hustles You Can Start Today
I Avoided Lifestyle Creep
This is an oldie, but a goodie. Focus on spending much less than you earn, and saving/investing the difference. As you start earning more, continue living on what you’re used to and don’t let lifestyle creep get to you. (Obviously you can still treat yourself, but do it intentionally!)
Read: The Easiest Budget You’ll Ever Use
Other Factors That Helped Me On My Journey To saving $100,000
I would be remiss if I did not mention these other items that contributed to my fast journey to saving $100k:
- I graduated with no student debt (I went to college on merit scholarships and lived with my parents throughout college to save money)
- I stayed on my parents health insurance until I turned 26 (besides the year I lived in Seattle). I did this because health insurance options for self-employed people are very expensive.
- My parents gifted me a car which has helped tremendously as well.
If I did not have these privileges it would have definitely taken me longer, so I’m beyond grateful for my parents and their help. We immigrated to this country in 2000 from Russia and we have all achieved so much in such a short time.
My life goal has always been to create generational wealth and I’m excited to be one step closer to it. My next goal is to invest $100k!
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