9 Simple but Effective Budgeting Methods That Helped People Save $100,000
It is quite possible to save a significant amount of money while you’re young. A Reddit user asked the question: “People under 30 who’ve already managed to save 100k, how did you do it?” and he received thousands of responses. Some people honestly admitted that they were lucky to be born in a rich family that helped them, but many people saved this amount completely on their own.
Bright Side chose the most popular tips and made a list. We don’t think that everyone can save this much money, but we are completely sure that anyone can save enough for an epic vacation.
1. Live with your parents.
More and more people prefer to live with their parents, even after the age of 30 — this is a worldwide tendency. A lot of money is spent on renting apartments, sometimes it's 1/3 or even 1/2 of a person's salary. Of course, not everyone wants to live with their parents, so in this case, you can split the rent with your friends, your partner, or other people.
- I lived at home with my parents. Lived in the suburbs and not in a place with many young people, so I rarely went out. This is where most of my savings came from. People don’t seem to realize how much you save by living with your parents. I saved at least $1200/month from rent alone during the first few years out of college. Add on utility and other bills and that’s another few hundred. I built connections and was promoted to a manager level position within 3 years. I now make $120k, but have since moved out and into my own place. © Joe-misidd
2. Make automatic transfers to a savings account the day you get your paycheck.
The research center Superjob did a survey: about 29% of people don't add up their expenses and about 40% of people don't have any savings at all. In reality, it is not as hard to save money as it seems and you don't have to try to live on very little money. All you have to do is put aside 5-10% of your salary and the result will amaze you.
3. Don't rush to buy a car, especially an expensive one.
Most people really don't need anything more than public transportation and a bicycle, a car is just a symbol of success and nothing more. But in the case that a person doesn't have a good financial cushion, they can't think they are successful just because they have a car. In the Netherlands, for example, 36% of people prefer riding bicycles and the number of these people is growing.
4. Don't buy brand name things.
In the modern world, it is a little funny to buy brand name things. According to statistics, the number of people who borrow money from banks is constantly growing. Many of them buy trendy gadgets and cars and then they have nothing to eat. They can't save enough money if they keep spending crazy amounts of money on things they don't truly need.
- Basically, I don’t spend a lot of money on trivial stuff. I’m not into fashion or chasing electronic trends, when I need or want something I buy it for the hardware and quality, rather than the brand name. I didn’t have a car until I was 27 because I didn’t need one, public transportation worked very well for me. © Zerole00
5. Don't use the phrase "I can afford this."
Excessive consumption is one of the biggest vices of modern society. Even if a person earns enough money, the habit of buying anything this person wants leads to the inability to save a significant amount of money. Some people want to buy things that are not necessary but unique, and there is even a term for this phenomenon — snob effect.
- There are a lot of what I would call “poor rich” people. For example, my best friend. By all means, we had the exact same start — graduated college debt-free, got an old car from our parents, and landed well-paying jobs in the LA area. She and her husband make $135-145k jointly per year. My husband and I make $105k jointly per year. She is constantly broke and overdrafting her accounts, while my husband and I have $150,000 saved up. We’re 27. The primary issue comes down to daily spending habits. They eat out, they go to restaurants, they buy new devices... It’s easy to spend more than you earn if you can’t limit yourself. © emmaballoo
6. Buy property.
The property, unless it's a mortgage, pays itself off pretty quickly and it doesn't matter if you live in it or if you rent it. The cost of property usually grows together with inflation - much faster than inflation in developing cities.
- I invested in real estate. Worked the night shift at McDonald’s until I could afford a $40k house. Spent my nights at McD and my days fixing the house. 8 years later, that house is now worth $140k. Last year, I pulled $60k in equity out of the house and bought another, this one for $195k. I now have renters in the first house paying me $1,100/month. © Rust_Dawg
7. Change your specialty or workplace.
Don't be afraid to try something new while you are still young. There is a chance that you will discover a talent for something that will bring you more money and pleasure. And don't hold on to a workplace if your career is not developing. There are hundreds of others in the market that will appreciate your knowledge and experience.
- $120k in our bank account, we are 24 years old. I started as a wedding photographer and then I organized my own online courses. It turned out that teaching people to take photos is much more profitable. But my wife and I have a pretty simple life, we don’t have fancy clothes or a cool car. © saltwatersaguaro
8. Learn to cook.
Go to eat out very rarely. Eating out often is not only bad for your budget, but also bad for your health. So the cheapest way to eat is cooking at home.
- I won’t say I never get a drink at a restaurant, but I rarely do. It just adds dollars to the bill... And this adds up if you do it a lot. Instead, we spend $25 on mixers/vodka and make drinks at home for like 2 nights... It’d cost $100+ to do that in a restaurant. Cook at home, don’t give in to the temptation of going out to eat on a regular basis. It matters a lot for someone making ~$35k/year. When you’re making $350k, then you can ignore these expenses. © ACreativeTechnophile
9. Don't look for easy money.
There is no such thing as easy money and risky things like gambling are great ways to lose all your money. Even a profitable thing like the stock market requires a lot of effort and thorough research — there is no place for luck there.
But before, decide what you want from your youth. Living with your parents, using public transportation, being careful about every purchase you make? A happy youth or investments in the future should be everyone's personal choice.
- I get the point you’re making, and good on you for saving well and being so disciplined, but I can’t really fault your friends either. Yes, they are spending more than they need to, but they’re also enjoying their lives and seem fairly well set up to maintain their lifestyle. Assuming they have income protection in case their circumstances change, I can’t really fault them either. Money is a tool and if that tool can be used for pleasure without harming your future too much, then that seems fine too. Can’t fit much cash in your grave after all. © Deepandabear
Do you save money? Can you recommend any effective tips?