So, you’re 20 something years old and it’s really set in that it’s time to get your savings together. Saving money can be extremely hard for some, or most, but if you go about it the right way – you won’t even realize you’re putting money away!
- The first step to start saving is to develop a budget plan. I did mine in Excel because the spreadsheet makes it super easy and clean. But there are plenty of printables as well that look nicer, and you can print it out and hang it up in your room or on the fridge.
- Once your budget plan is complete, or near complete – you need to think about how much you’re going to set aside each month for savings depending on how much money is left over after expenses are taken out. A good start is to put around $100 a month away (or more if you can!) and also set up a “simply save” on your bank account. In my experience, TD Canada Trust has this feature and I’m sure other banks do as well. Essentially, every time you use your card – it will take a certain amount in a separate transaction and transfer it over. It can be as small as 50 cents, so you really don’t even notice you’re saving – but it adds up!
- The third step is to make money work for you. This can be done a few different ways such as investing into mutual funds, GICs etc. It is a good idea to talk to a financial advisor about these investments to ensure that you are getting the proper advice and care for your money.
- A bonus step would be to create another form of income other than your main source (your job), preferably passive income. Passive income is income that requires little to no effort to earn and maintain, which can come from rental properties (you own the property and rent it out to people), royalties such as writing your own book, partnerships etc.
- READ! Yes, that’s right. Read as many books as you can about money and financial advice/freedom. There are several books out there that have changed lives and they could potentially change yours as well! It is great to have knowledge, especially in your 20’s. Some good books to read that are also on Amazon are:
- Broke Millennial by Erin Lowry – it is a great book for beginners who feel clueless about budgeting and getting out of debt. Also, this book is aimed at 20-30 year olds, which is different compared to some books that can be hard to read or interpret.
- The Total Money Makeover by Dave Ramsey – this book is incredible and features his famous “seven baby steps” to building wealth and getting rid of debt. A must read!
- Set for Life: Dominate Life, Money and the American Dream by Scott Trench – this book is built on debt and making choices and sacrifices in life for the greater good. This book is recommended for “younger people who want to live life on their own terms as quickly as they can.”
- Rich Dad, Poor Dad by Robert Kiyosaki – this book will offer personal finance education to help you learn about cash flow, real estate, investing, how to start a business etc. It truly teaches you what kind of mindset you should have if you truly want to be rich/wealthy.
6. Something that has saved me more money than I thought it would is not buying coffee when I’m out, or even any fast food for that matter. Make coffee at home if you’re a coffee drinker – and grocery shop frugally. I found that downloading a price-matching app saved me even more money as well whenever I went out shopping!
7. Thrift shopping versus shopping fast fashion or “sales”. If you truly need new clothes, try thrifting. But, before you do – you should try and sell the clothes that you don’t need or don’t fit anymore. Consider selling them to the thrift store to get your new items for cheaper (but in my experience, I have made more money selling them by myself than giving them to the thrift store, it just takes a bit longer)
8. I have listed books above that are from amazon, but once the library becomes available again – use the library!!! I repeat. Use the library! FREE. BOOKS.
9. Pick up a second job or business. In my experience, I made relatively good money as a pizza delivery driver from tips. It was cash in my pocket at the end of every night, and you can save up and put it in a jar or the bank. A great second job to do on weekends or nights! You could even try delivering for Uber Eats or Skipthedishes if that interests you more, just do some research to see how much they pay etc.
10. Look at the things that you spend your money on. Do you get your nails done? Buy a bottle of nail polish and do your own nails at home – manicures are not essential. Do you get eyelash extensions? These can be pretty costly, it might be time to take a break for awhile. What about subscriptions? Take out any that are unnecessary that you can live without. I know that I used to have a FabFitFun box and an Ipsy bag, that I considered to be cheap subscriptions – but they add up and take away from your savings! If you truly want to save money and live a better life – you need to make sacrifices and act your wage. Buying things that you don’t need and that are too expensive to maintain can lead to even more debt and the wrong path towards success.
Overall, it’s a great idea to talk to a financial advisor. They will give you proper advice based on your situation and change it along the way. Happy saving! If you have any suggestions/questions, comment down below I’d love to see them!! Cheers to financial freedom.