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8 Great Money Saving Ideas for 20 Somethings

8 Great Money Saving Ideas for 20 Somethings

Yeah, I know. When you’re in your 20s it seems like the rest of your life is so very far, far away. It’s probably the first time in your life you have a steady income and the first thing you want to do is buy some of the things you’ve always wanted and could never afford. You want to go out with your other working friends and have a good time – there’s always more good times to be had than money. With all this fun and buying going on, the last thing you probably want to think about is saving for something that seems as far away as China. Take it from a banker that sees a lot of broke retirees, time flies.

 

Just think about going through high school and college. When you started each, I bet the end seemed so very far away too. But now that you’re out and working, looking back you quickly realize how fast time flies. Apply that realization to your future and you start to get a sense of the importance of saving. Use the below tips to start.

 

  1. Create your spending plan. Many people use the term budget here, but I find people mostly need to control their spending. Look at your last few months of bank statements and see where your money is going. You’ll have some broad categories like rent, car payment, and auto insurance – but you’ll quickly find you spend more on eating out and shopping than you thought you were spending. Once you understand your spending, you’ll have some concept of where you can save.

  2. Live with roommates. Renting  a place with your friends will minimize your living expenses. A $800 per month rent can quickly be reduced to $300 per month with a couple of good friends.

  3. Don’t buy a new car. I know the new smell and sparkling new paint can be very tempting, but buying the same car, only one or two years older will save you thousands.  It could cut your monthly car payment by 33% and monthly auto insurance by 20%.

  4. Participate in your employer’s retirement plan as soon as possible. I love retirement plans because they force you to save by taking a small percentage of your pay upfront. Most employers give you some kind of a match on your contribution, like a 50% match on the first 6% means a free 3% on your money. If you don’t participate, it’s like throwing 3% of your money away.

  5. Do some jobs on the side to make extra money. This is where money can really add up fast. Driving for UberⓇ on the weekends, picking up some dog sitting jobs while folks are on vacation, or some temporary seasonal work can really rack up money fast. I’m a big fan of mystery shopping that can save and make you money!  See my other blog post on The 4 Best Ways to Make Extra Money Online and from Home.

  6. Start small and build. No one is saying live like a pauper or become a cheapskate.  Start saving $25 per week and do more when possible. If you receive a raise or tax refund, take a percentage and add to your weekly savings. Target a 2% per year savings and increase as you begin to earn more money.

  7. Realize time is on your side, for now!  If you start saving $39 per week, or $2,000 per year from age 25-35 and then stopped – you would save more money than if you saved from age 40 -65! See the chart below.

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  1. Lastly, pay yourself first. Once you figure out how much you can save, pay yourself first by setting up a direct deposit or auto transfer into a savings account. Look at it just like paying a bill. Remember the saying, people don’t plan to fail, they fail to plan.

 

BankerXBanker X is a banking industry insider on your side.  He founded Squeezethebank.com to give money saving and money making ideas through educuational articles and stories.  He has a savings plan in place and mostly sticks to it.  If you liked this post, please share it with friends, like it on Facebook, and join my email list for future valuable information.  Check out my other money saving ideas too!

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