How I Saved $70,000 by Age 25
It’s a strange thing. No one really went out of their way to teach me to save money at a young age, but it seems to always been ingrained in my DNA. My family was not poor so we never lacked the necessities that made me feel the need to be particularly frugal, but even at a young age; I always enjoyed not spending and saving.
So that continued to through my teenage years and young adulthood. In fact, my Mom was always worried that I was overly frugal and that could cause problem in finding a mate and cause issues in my future family (this was not and still is not a problem today).
So how did I manage to save over $70,000 by the time I’m 25 years old you ask? For one, I was living at home and my parents did not ask me to pay rent. So I effectively saved around $1200-$1500 in rent and utilities every month. Secondly, I was never a big spender and didn’t have any costly hobbies so I basically saved everything that’s not a necessity.
Some of my friends at that age were travelling, eating out frequently, and buying whatever they wanted since they’ve also just started making money and living a more independence life. I was low maintenance so I didn’t feel the need to “live it up” on a regular basis other than the occasional eating out with friends. Once I started my own family, due to our saving habits, we were able to travel at huge discounts or almost free at least once a year with our credit card reward points and free hotel nights (we flew for free to Australia / New Zealand / China for our honeymoon, I’ll write another post about how we did that later).
My financial philosophy has always been saving frequently and spends frugally on a regular basis, so when you want to really spend on something (like an expensive item or vacation) you won’t have to worry about not having the funds to do so. I have never balanced a check book and we still don’t do that (I didn’t even know what that is until much later in life), because our family never spends more than what we have in the bank or in credit. My parents do the same thing.
I started working at 22 or so and would save around $25,000 a year after deducting taxes, expenses, and 401ks. So all in all, I was able to save $70,000-$80,000 by the time I was 25 years old. If you have to pay for your own housing, food, utilities and so on, you may not save $70,000, but still save significantly if you are a saver. I had originally planned to use the savings to pursue a MBA, but since I did not do that, I instead invested the money in stocks through professional management.
MBA would have been a good investment in myself, but this investment didn’t turn out too shabby either. The initial investment have since more than doubled on its own, so you can’t really go wrong investing in yourself or in the stock market (with a professional manager).
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It’s a strange thing. No…