How to save 100k for any goals?
In order to save 100k, you will have some work to do. It’s not that easy. In fact, your first 100k is the hardest.
But do not despair just yet. As any financial advisor would tell you, the trick is that you have to be willing to make some sacrifices, start saving early, set goals, create a savings plan, etc. In no time, you’ll be able to see $100,000 in your savings account.
Then, you will know for sure what it means to have $100000 in savings. Here are some money saving tips to consider in learning how to save 100k. In this article, we will show you in just 9 simple steps how to save 100k.
How to Save 100k in 9 simple steps:
1. Establish your goals.
One of the first step in this ‘how to save 100k’ article is to establish some goals.
Why do you want to save $100,000? You may have several reasons why you’re saving 100k. Are you saving 100k for down payment on a house?
If you want to learn how save 100k for a house deposit, then click here for more information.
Or you’re saving 100k to start a small business or to invest in stocks in the future.
Either way, you should establish your goals before you start saving 100k, so you know how much to save and in what saving vehicles to put your money.
Whatever you do, however, that money should not be put in risky investments such as stock. You never know when the stock market is going to plummet.
Therefore, you should save this money safely in a high yield savings account that has a decent yield and that does not fluctuate in value.
2. Track your spending.
A common piece of advise you’d hear from any financial consultant to save more money is to make more money or spend less or both.
Saving 100k might be difficult if you spend your money frivolously.
For some people, however, spending less money is the more feasible way to save money.
To spend less money, you have to track your spending. In other words, you need to know where the money is going each day, each week, and each month.
Consider using a budgeting tool like PersonalCapital.com, to track your spending.
Related tip:if you’re interested in saving money, but don’t know where to start, then Digit is a good option. Digit analyze your income, bills, and spending habits, and find extra money that they can withdraw and put aside for savings for you. Click here to start using Digit.
3. Having a hard time saving 100k? Speak with a professional.
Working with a financial advisor can help you reach your first 100k saving goal much faster than on your own, simply because they are well versed in the personal finance field.
For example, investing in stocks to reach that $100,000 saving goals can be more difficult for you to understand than putting your money in a high yield savings account.
Thus, working with a financial advisor makes more sense when investing in stocks than going to the trouble of picking your own stocks.
If you’re interested in speaking with a financial advisor in your area to come up with a financial plan, click here
4. Open an online savings account.
Put your savings to work by opening a
high yield savings account. They offer a higher interest rate than a typical savings account. Your money compounds, so you can earn interest on the principal and interest on the interest.
Therefore, your savings grow faster. Also, money in these accounts are harder to access, so you’re not tempted to spend the money.
Another alternative is to open a money market account. They are similar to a high yield savings account.
5. Automate your savings.
Saving 100k does not have to be hard. However, you’ll have to be consistent. And it’s easy to get off track or it’s easy to spend whatever money is left after your monthly expenses.
So, saving automatically allows you to set and forget, so your savings will automatically grow each time you get paid.
All you need to do is to set up an automatic deposit for your savings account from your checking account. If your job offers a direct deposit, you can have a portion of your paycheck deposited directly into your savings account.
Is Saving 100k a difficult task for you?, You have options and there are steps you can take yourself. But if you feel you need a bit more guidance, simply speak with a financial advisor. SmartAsset’s free tool matches you with fiduciary advisors in your area in 5 minutes. If you are ready to meet your goals, get started with Smart Asset today.
6. Open a certificate of deposit (CD).
Once you have a good chunk of money in that savings account, move some of it to a certificate of deposit and lock your money away for an amount of time, which could be for a term of 6 months, 1 year, 5 years, etc.
The drawback with certificate of deposit is that you cannot withdraw the money before the term expires.
Otherwise, you incur a penalty. So, if you know you won’t need immediate access to your money, then consider a certificate of deposit, which generally pay higher yields than in a bank savings account.
Related: The Best 5 Places to Keep Your Savings.
7. Pay off your credit card debts.
Having a lot of credit card debt is a roadblock in your goal to save 100k. Plain and simple.
So if you want to make saving 100k a reality, then you’ll have to make paying off your debt, like credit cards a priority.
Credit cards ten to carry the highest interest rate than the other forms of credits (such as car loans, mortgages).
When you’re paying off your credit card debts, you’re saving on interest. That extra money can go towards your savings, thus growing your money much faster.
8. Start Early.
The common mistake that many people make is to put off saving (or investing), because they don’t make enough money.
However, not saving early can cost hundreds or thousands in interest, or can take you longer to save your first 100k.
So, if you understand the power of compounding interest, starting to save money early is the key to save 100k.
9. Max out your 401(k).
Have you ever wondered how long does it take to save 100k?
Contributing to a retirement account such as a 401(k) can help you reach your saving 100k goal faster. Maxing out your 401k can help you grow your savings in no time.
Suppose you can afford to max out your employer 401k plan every year, you will be able to save $100,000 in 5 years and half or so.
That length of time did not consider any annual return or employer match. So if you take into account a 7% annual return, plus employer matching, you will be able to save $100,000 in 5 years or less.
The maximum amount of money you can contribute to your 401k in 2019, if you’re under 50 years old, is $19,000.
If you’re looking for a calculator to determine how long to save 100k, then use this saving calculator.
The Bottom Line
If you follow these top saving money tips in this ‘how to save 100k’ article, you should be able to reach your goals in no time. All it takes is some hard work, discipline and sacrifice.
Other resources about saving 100k
Saving 100k will not happen overnight. You might be able to save $20,000 in one year; $30,000 in year 2. So if you’re looking for articles on how to save different sums of money, see these ones below:
- Want to learn how to save 10000 in one year, click here.
- How to save 80000 in a year, click here.
- How to save 40000 in 2 years, click here.
Related topics on how to save 100k:
Is 100k in savings a lot? Ask the Right Financial Advisor.
You can talk to a financial advisor who can review your finances and help you save 100k (whether you need it to pay off debt, to invest, to buy a house, or plan for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.
Tools to Save your first 100k
1. CIT Bank Savings Builder. If you’re looking to earn great interest on your hard earned money, then try CIT Bank Savings Builder. CIT Bank offers 2.45% APY, 25 times better than what a typical savings account is offering. You’ll need only $100 to open an account.
2. CIT Bank’s Money Market Account. CIT Bank’s money market account offers an impressive 1.85% and only requires $100 to open an account. This is better than most money market accounts out there. Check out CIT’s High-Yield Money Market Account.
3. Acorns. If you want to invest your spare change, then Acorns is right for you. Acorns rounds up your spending to the nearest dollar every time you make a credit card purchase and invest the difference in index fund and ETFs. You’ll get $5 Bonus when you sign up using my link.
4. Digit. If you have little money to save, then try Digit. Digit, one of the best apps for saving money, finds extra money in your budget and save that money for you automatically.