3 Savings tips that could make your dream a reality
So, you want to be a millionaire? Everyone does. For many, figuring out how to save money and increase net worth is no easy task. If you are thinking about saving in your 20s, then you are on the right track. Becoming a millionaire all starts with savings, and the sooner you start, the quicker you can get to your goal. There are a few strategies for saving in your 20s that will help you meet your goals.
Create a Financial Plan
Very few people are blessed with riches without much planning. Unless you hit the lottery or fall into a large inheritance, your road to financial independence will require careful planning. To get the ball rolling, it is crucial to sit down and figure out exactly what your goals are. Write down your goals, and then take a hard look at your spending. Figuring out how much money is available for saving or investing is the first step to understanding your financial picture. Once you know what your income and spending look like, you can begin to cut out unnecessary spending.
It is also important to sit down with a financial planner who can come up with different strategies to meet your goals. This may include creating an investment account, and ensuring enough money is left over to fund a rainy day fund.
Take the Effort out of Saving
You’ve probably fallen into the trap of having good intentions for saving in your 20s, but life manages to always get in the way. Maybe you planned to save 20% of your monthly income, but something comes up that makes it impossible, or you see a great sale, or there is a new restaurant you absolutely must try. We are all human, and because of that, we can allow excuses to thwart saving efforts.
To prevent this problem, and save your way to six figures, automate your savings. Take the effort out of it, and set up automatic withdraws into your preferred accounts. You can set up automated deposits into your IRAs and 401k accounts; you can also set up your bank account to automatically transfer money into your emergency fund, too. You will be surprised how easy savings can be when you don’t have to manually move money out of your hand and into off-site accounts.
Increase Your Streams of Revenue
No one becomes a self-made millionaire without a lot of hustle. Simply put, increasing your bankroll will take work. To maximize your cash year over year, you’ll need multiple streams of revenue. According to Thomas Corley, self-made millionaires tend to have one thing in common—they never put their eggs in one basket. Over a five-year period, Corley interviewed millionaires to better understand their money habits. He found that 65% of millionaires had three streams of revenue.
A stream of revenue may be your primary income, a side business, investment account, or investment properties. Someone who is focused on saving money will do all they can to keep their money in their pocket, but entry into the millionaire club takes a bit more creativity than that. By increasing your streams of revenue, you’ll increase your available money, and that is the best way to up your savings.
How quickly you can meet your financial goals, and how much money you can save each month or year depends on several factors, but something is always better than nothing. The quicker you begin saving in your 20s, the better your financial health will be.