I am 33 years old. 5 years ago, I made the decision to turn my financial life around. I decided to learn as much as I could about best ways to save money. Because of that, I have some money saved up and have invested in a few mutual and retirement funds. But I did not start early and therefore lost on a lot of opportunities. I am not saying that had I saved my money early on would have make me rich by now, but it would allow me with plenty to invest in stocks or in real estate. Here are the best money saving tips I wish I knew in my 20s.
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Best Ways to Save Money: Money Saving Tips I Wish I Knew In My 20s
1. I wish I knew how to say “no.”
When I was in college, I would go out all the time. Friends, girlfriends would always invite me somewhere. I had the fear that if I did not say yes, I would somehow miss out on things. Now at 32, I realize that all of the money I spent on food, alcohol, parties could have been saved. By now, I would have a good nest egg.
If you are in your 20’s, do go out but don’t go out as often. Learn to decline invitation; learn to say ‘no.’ Or engage in activities where it’s not gonna break the bank or where it doesn’t cost any money at all. In fact, there are plenty of activities that can save you money and have a good time, such as play cards at home, sit around a fire pit, watch movies with you friends at home.
2. I would have saved money where it’s not easily accessible.
In college, I did have a checking account. That’s it. I would save some money there, whether it’s money from my dad or money from student jobs. But it wasn’t really a savings account, because the money would come out as fast as it came in, if not faster.
One of the best ways to save money where it’s not easily accessible is by opening an online high yield savings account. With an online high yield savings account, there is no ATM.
The only way to access that money is to make a request where the online bank will wire the money to your checking account.
This process can take anywhere to 2 to 3 days. This helps reduce the tendency to dip into your savings from time to time. See below for the best high yield savings accounts to open a new savings account.
3. I would automate my payments.
I did not have a lot of bills back then. I did not own a house. In college, I lived on campus. So rent, internet, electricity, and the like were being handled by the college, though I had to pay them through government loans, but it’s usually in a lump sum.
I started renting my own place at age 25. By that time, I started to learn about personal finance and was able to organize my bills. But before then, I was very disorganized.
Granted I had very little bills, but I was responsible for my paying my phone bills, paying my credit card bills, and paying my car bills. Keeping track of the due dates for these bills was a challenge for me. I would forget one due date, and I would get hit by a late fee. And at the end of each year, I would have a large debt.
Now to keep track of my payments, I set up automatic payments with my credit card companies, banks and service providers. That way, I avoid late fees and save money at the same time.
4. I would have thought about saving for retirement.
Another top money saving tips I wish I knew in my early 20’s is saving for retirement. When you’re young, you tend to live in the moment. You don’t give a damn about the past, you’re sure not thinking about the future. All you’re thinking about is now, having a good time, or being the coolest kid on the block. The last thing on my mind was thinking about saving for retirement.
Not saving and investing for retirement when I was in my early 20’s is something I regret to this day. I started investing for retirement 3 years ago, at age 29.
But would you imagine how much I would have by now had I started at 18, 20 years old? Because I started so late, I lost out on 10 years of time for my account to gather interest. That’s thousands and thousands of dollars.
Start thinking about saving for retirement now. Take advantage of your company’s 401(k) or 403 b plan. If they don’t have one, open a Roth or Traditional IRA. It’s never too early to start investing in a retirement fund. The early you start, the more money you will have, thanks to compound interest.
5. I would have spent less.
Just as I would have saved more money, I would have spent less. I used to spend money on useless, unnecessary things. I remember buying a guitar when I had no idea how to play it nor did I have any interest in playing it. I bought it, because two of my friends had one.
If you want to spend less and save more money, cut back a little in every area. Think first before buying something and ask yourself whether you really want that item.
If you follow these tips, you should be able to build savings, reduce debt, and invest. What are the best money saving tips you wish you knew?
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