This is a guest post from Martin of Studenomics, and more recently, Start Freelancing Now.
I'm on a money makin mission….
But i party like a Rockstar,
I'm flyin down 20 lookin good in my hot car
Party like a Rockstar….
Are you ready to take control of your life?
You only live once (YOLO baby!).
Why would anyone in their 20s want to save money?
Life's too short to save money.
There's so much fun stuff that you can be doing in your 20s. You don't want to be that guy that just saves and saves constantly.
You want to enjoy life.
Jeff recently wrote about investing in your 20s. This post got my attention because I enjoy Jeff's writing and I like to save money in my 20s.
Then I started thinking about my own life. Depending on where or how you meet me, you'll either think I have a drinking problem or I'm a workaholic. I love to work as much as I love to go out to enjoy myself.
The last 4 years have been a blast and I'm not even half-way through my 20s yet. I've been on many trips around the world, I go out very often, and I still haven't found a real job. I've managed to do this all while still saving for the future.
How's this possible?
How can you party and still figure out this whole saving money thing?
Automate your savings.
The best way to save any money at all in your 20s is to set it and forget it. Trying to learn about budgeting and frugality can be come extremely boring if you're not that kind of stuff. This is why I always suggest the idea of setting up automated savings.
How can you automate your savings? It's really simple.
- Go to your employer or to your bank.
- Ask them to automatically deduct X amount of dollars every paycheck.
- Watch your savings account grow while you don't do anything.
- Treat this automated savings as a “pay cut.” Pretend you just
don't have access to this money.
How much should you automate? This all depends on how much you make and what your fixed expenses are. You can keep it simple and start off at $50. Then you can move up as you feel more comfortable. I started doing this many years ago and it's the only way that I've been able to save money.
More from GFC, Below
This same logic also applies to paying down your debt. If your student credit card or student loans got you into debt, you're likely going to have to deal with this before you can get aggressive with your savings. You can also automate your debt payments.
Keep it simple.
We often don't take action because we're either afraid or confused. We hear about complex investments that involve different currencies and all sorts of risks. We get nervous and completely forget about the idea of saving money.
No more excuses. It's time to keep it simple and just save money. If you don't know anything about investing or retirement accounts, just save your money in a savings account. Leave it there until you decide what to do next.
Know when to cut back.
You don't have to cut back all of the time. You can go out as much as you want. I do. I always have fun.
The only caveat is that there will be times where you need to hold off for a bit.
I try to hold off on going out when:
- Working on big projects.
- Savings aren't up to par.
- Income is low.
- I need more focus.
Work when you have motivation.
Productivity and motivation won't always stick around like an annoying ex-girlfriend. When you get a jolt of motivation, I suggest that you take advantage of it. If an idea makes you nervous, pursue it. You never know when you can grab onto something cool and new. But I'm just getting off topic now…
Find clever ways to make more money.
One thing I've been grateful for the past few years is my multiple sources of income. I've diversified so that I never have to rely on one income to cover all of my expenses and savings.
What are my multiple sources of income?
- Online work (my own blog, freelance writing, and other random sources of income).
- My part-time job (I'll always have a part-time job because I love the interactions).
- Rental property.
- Random freelance income.
You can easily have a blast in your 20s and still save money for the future. If you're looking for ideas on how to make more money, I would like to suggest my piece on how you can start freelancing right now.
Are you ready to find that perfect balance?