In this piece, I will go further into my personal finance story and provide the specifics of how I was able to save $100,000 based on my own experiences. And I was able to put all of this money aside in a little over three years without even making close to a six-figure wage. I am going to share these money-saving methods with you in the hope that they will inspire and encourage you to save money, just like they inspired and motivated me to save money. If I could do it, you can do it too. So, in order to save $100,000 in three years like I did, here is precisely how to do it!
The Way to Save a Hundred Thousand Dollars: This marks the start of my adventure
After I finished college, I was offered a position with a starting salary of $54,000, which translated to around $40,000 after taxes were taken into account. It was a great accomplishment to reach this milestone in the early stages of my path to financial health. I did, however, have a number of very extraordinary things working for me in terms of the amount of money that I was able to save, and those items were as follows: Because of good fortune, I did not need to take out any school loans (Thanks to my super hardworking mother, who paid for my college tuition in cash - a gift I am forever grateful for - and a partial scholarship I had) I had just graduated college when I was offered a decent wage for an entry-level position (to me, $40,000 after taxes was incredible!). My total compensation increased to around $74,000 at the conclusion of the 3.5-year period, thanks to annual raises, annual bonuses, and a promotion that brought my total earnings to approximately $52,000 after taxes. This indicates that I will continue to save money so long as I continue to make money, and I will elaborate on this topic further down.A few further suggestions for saving money are as follows:
All by myself, I was able to put away this sum of money. There was neither inheritance nor a gift, nor was there a trust fund. Because I was not married, I did not have the extra financial security that comes with a shared salary. Just so you know, I did not have a wealthy lover or a sugar daddy; it was just me. I felt I should get that out there.Did I mention that I accomplished all of this without receiving a salary in the six-figure range?
If you are interested in learning how to save $100,000 in three years, continue reading; in the following paragraphs, I will explain the steps that I took in order to help you understand how I was able to accomplish this goal. I have also provided you with some money-saving advice that you may use in conjunction with your own strategies for savings as you work toward achieving your financial objectives. My "self-education," which consisted of reading books and gaining as much knowledge as I could, was a significant contributor to my accomplishments, and it is crucial that I point this out. Now, let's dive into how you may save a hundred thousand dollars!Advice from me on how to economize $100,000 in three years
1. My company provided me with the opportunity to participate in a 401(k) plan, and I made contributions to that plan
To tell you the truth, I was utterly clueless about what a 401(k) was when I first began working. I was likewise confused about the need to have one. My only piece of information was that I was being given free money in the form of a match, so naturally, I jumped at the chance. Over the course of time, I was able to acquire knowledge about asset allocation, fund kinds, expenditure ratios, and other related topics. Having said that, I did make use of the free match, to begin with. My company at the time provided a matching contribution equal to one hundred percent of the first six percent that I donated. I did not donate the maximum amount possible at the time, but I did pay around 15 percent of my wage. During the course of the three and a half years, I was able to put away almost forty thousand dollars in my retirement account. This was also before the most recent big recession hit the United States. Therefore, the money that I gave rose as a result of the relatively positive performance of the stock market. Putting money into investments is one of the most important things you can do to save $100,000. As soon as you are able to, start making contributions to a retirement plan. Max out if possible. Until you are able to contribute the whole amount, consider increasing your payments by one percent each quarter. Take advantage of it if your work provides a matching contribution. Do you want to increase your knowledge about investing? Read my book, Learn How Investing Works, Grow Your Money and see whether it's right for you!2. I was able to keep my costs to a minimum
My primary costs remained after deducting contributions to my 401(k) and health insurance, as well as my taxes. They were my automobile (I paid a car loan for around $150 and then subsequently approximately $300), my insurance (which was approximately $80), and my mortgage (which was approximately $900). It was a great way to get my savings off the ground since I was able to put away the majority of my earnings for those first six months. Being a single person meant that I didn't do much cooking, so my grocery expenditure was never very high. Because of this, I didn't actually consume too much food, haha (Yes, ramen was my friend). Because I don't use alcohol, going out mainly consisted of hanging out at the homes of my friends, which resulted in significant cost savings for me. Because my job required me to travel quite a bit, the majority of my weekday meals were paid for by the company. When I was at home, I also lived pretty near to my workplace, which meant that I seldom needed to purchase gasoline. When it came to retail therapy, I did a little bit of shopping here and there, but I didn't have any spendthrift tendencies...yet! The total amount that I had to pay each month for my water bill, internet bill, and mobile phone bill amounted to around $170. Bright Girl Tip: When it comes to your budget, the first thing you should focus on is finding ways to reduce your spending. If you can manage it, try to locate your house closer to your place of employment, prepare meals at home, and pack lunches. You may cut down on alcohol consumption and save money by exercising at home or outside, carpooling, and making use of online coupons and rebate websites. You will be able to save an additional 100,000 dollars thanks to this!3. I made it a priority to save aside between 40 and 50 percent of each paycheck, in addition to any additional funds
My 401k, additional deductions and taxes (my tax rate was about 25 percent) brought my take- home income down to somewhere between $1350 and $1400 during my first year of work. I put aside every cent of my annual bonus, which, after deducting taxes equal to fifty percent of the bonus, amounted to roughly in the neighborhood of $1,500 for the first couple of years. (not much, but still something), and I made it a habit to put the majority of whatever tax return I received into savings. As a direct consequence of this, I was able to swiftly save a substantial amount of money. My annual cash savings came to roughly 18,000 dollars on average, and after working a full-time job for 3.5 years, I had accumulated well over 50,000 dollars in cash savings. Advice: If you want to know how to save $100,000, it's not enough to just reduce your costs; you also need to have a strategy for saving the money that's leftover after that. I made things simpler for myself by arranging for the funds to be sent to my savings account as soon as I was paid. This occurred immediately. In addition to that, I put a significant portion of my funds into long-term investments in the stock market. Fidelity is now one of the platforms I use for both my individual retirement account (IRA) and other types of investment.4. I embarked on a second career
An additional fantastic method for how to save $100,000 is to launch a side company. Around the middle of my second year of saving, I developed a strong interest in photography, and I eventually established a lifestyle and wedding photography company that is highly profitable on a part-time basis. In order to get my side company off the ground, I used some of the money I had saved up to make the first investment in a DSLR camera that was in the entry-level price range. To my utter astonishment, after a few short months, I discovered that this company was expanding very rapidly and becoming quite successful. As more time passed, I made an effort to expand my professional network and cultivate friendships with as many seasoned photographers as I could. In return, they allowed me to second shoot for them and started referring business to me, both of which contributed to the expansion of my company. It was something I really liked doing, and it brought in a nice supplementary income for me. What I did with the money I made from my side hustle was that I invested my profits back into my primary company and also used some of the money to pay the firm's taxes. This included investing in professional equipment such as cameras and lighting, as well as enrolling in a few classes. I also put aside a significant portion of it and used it to finance the first stages of building a very costly handbag collection, which I eventually resold. I am sure that throughout these last three years, I would have been able to save aside a far larmore significantrtion of my income had it not been for my unhealthy preoccupation with handbags. During the first year of operation of my company, I brought in around $10,000. My earnings for the second year were close to $30,000 in total. In succeeding years, I was able to increase my earnings. I put in a lot of effort, but I believe that it was worthwhile. My funds have surpassed the one hundred thousand dollar level thanks to this supplementary income. If you are seeking fantastic second jobs, this is a terrific alternative for you to consider! A helpful piece of advice is that if you handle your side hustle properly, it has the potential to significantly increase your income. It is also a potentially significant component of how one might save $100,000. Just make sure that you don't blow all of your money on stuff that you don't need!5. I used credit to pay for things, but I managed my finances responsibly
Yes, I still have a credit card, but I used a charge card for most of my purchases made with a credit card. When you use a charge card, you have a monthly obligation to pay off the whole amount on the card. For instance, a charge card is something like an American Express Gold card. In order to pay all of my work-related travel expenditures, I needed to carry a charge card. Therefore, I reasoned to myself, why not get one for myself as well? When I overdid it on occasion, I was given some sobering reminders, but having a credit card has always kept me in check, and it continues to do so now. I am now aware of my limitations. A word of advice: If you think you may be able to qualify for one, think about obtaining a charge card rather than a credit card. It functions just like a credit card while also assisting you in constructing your credit history. This will assist you in avoiding taking on further debt. There are many positive comments made about this credit-builder account from Self, and their customer service is outstanding.