How I Saved $40k by the time I was 21

Hi everyone and welcome back!

Every month, I share a post on my series about how to stop living Paycheck to Paycheck.  Budgeting is something that is learned and it is my hopes that this series will provide some great stepping stones to help people.  The series will run through June of 2017 but if you want the whole book now, you can get it here.

Growing up, all of my friends thought I had no money because I rarely went to the movies or bought random crap at the gas station.  In fact, it was quite the opposite.  I was saving my money.

Learning Young

From a young age, my parents taught me the importance of saving.  I remember being really young and receiving $4 per week allowance for doing simple tasks like making my bed every morning.   Out of these $4, I could spend $2 and I had to put $2 into my savings account at the bank. My parents had started this account for me when I was either born or really young and it already had included a small amount of funds from gifts.

As I got older and was able to do more chores, my allowance increased to $10 per week and the same rule applied.  $5 could be spent and $5 had to go to the bank.

Now, $5 doesn’t get you very far so I also had to save the spending money in order to get something from the store.  Over and over again, I would save up and by the time I would have enough money, I either didn’t want the item any more or I had saved so long that I didn’t want to see the money go.  So, most of my spending money ended up in the bank.

Working

When I was 12, I started babysitting.  This is when I really started saving.  My first year of babysitting I was making $3/hr watching one child or $5/hr for two children.  The first year of babysitting I made a little under $1000, all of which I put into the bank.  I continued babysitting and saving until the kiddos I babysat were old enough to stay home alone.  This was around when I was 19 years old.  My fees had gone up to $10/hr for one child and I didn’t have any jobs with two children at that point.

In addition to babysitting, throughout high school, I worked the concession stands during the games, helped out my neighbor in her dental office, and got my first job in a retail store.  I also helped neighbors with house-sitting or other house projects like painting.

I remember one day when I was around 16 where I had three babysitting gigs in one day.  I worked from about 9am to 9pm with only enough time to go from one house to another between.  As much work as it was, it was so rewarding!

When I was 18, I landed a job that paid very well considering I didn’t have a degree.  This job was fun and flexible around my school schedule.  I stayed with this job for two and a half years.

Living at home

I lived at home until I was 21 even though some days I thought it was going to kill me.  I definitely had the fear of being the boomerang kid who moves out too early and can’t make it on their own.  So, I made damn sure I was going to be successful when I finally did move out.

The entire time I lived at my parents, I saved all of the money I earned.  When I was ready to move out, I started looking for a home to buy.  I knew I never wanted to rent an apartment.  Of course though, that purchase fell through and I ended up having to rent.  Anyways, good thing I had extra money saved up to put towards rent right?

 

I always knew that there were going to be large purchases ahead and that by the time I turn 28 that I would have definitely need a new car.  I knew that I was also going to buy a house.  This is what kept me motivated to save and kept me from buying novelties.   I will be turning 28 in April of 2017 and am very happy that I saved early on.  I am now able to sell my house and purchase house #2 where I will start my family.

While not everybody may be able to live at home until they are 21, there is always a way to better your situation.  Saving money towards a larger goal or saying goodbye to living paycheck to paycheck requires the motivation to work hard to have a better future.

 

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7 Ways to NOT Become Rich

7 Ways to Not Become Rich

Now we all know money can’t buy everything. In fact, sometimes money can be more of a hindrance than a help.  So, for those who say they never want to be rich because of the headaches and hassles that come with the territory, here is how you make sure to succeed.

Don’t sign up for 401k – Employers who offer 401k will match your contributions up to a certain percentage. This is a sure way to at least double, possibly even triple or more because of stock and bond increases.

Don’t create financial goals – Financial goals can cause stress and confusion.  Might as well live for the day and not worry about tomorrow.

Don’t track your spending – Tracking your spending shows you where each dollar goes.  It can bring on buyer’s remorse and can cause you to decrease your spending habits.

Don’t clip coupons – Coupon clipping can save a ton of money but can also take some time. Is all that time really worth it?

Don’t live like you are poor – Spend all of the money you earned and enjoy your spoils. You earned it. Now go relax with a drink.

Max out your credit cards – What a concept, using tomorrow’s money to pay for today’s fun.  And since tomorrow never comes, the credit card bill won’t either right?

Eat fast food or at restaurants – Let’s face it, food that somebody else prepares tastes so much better than the standard home cooked mean.

Now you may be wondering if I’m crazy for suggesting all of this. Well yes, I am crazy but if you remember the basic fundamentals of how we were all raised, you will understand. It has been engrained in many people since childhood to go on their own path and not follow the norm. Or, simply, do the exact opposite of what people tell you to do. Especially if those people are your parents. So all we need to do is mix the signals of what is the norm and what is being unique and we create success.

 

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Say Goodbye to Living Paycheck to Paycheck: Beginning Growth

Say Goodbye to Living Paycheck to Paycheck Beginning Growth

This post is part of a series.  To start the series from the beginning, click here.  To browse through the series, click here.

The pre-teen years are great for reinforcing budgeting skills learned throughout childhood.  This is when the need for money becomes a bit more prevalent. Kids may want to go to the movies with their friends, run to the local candy shop, or buy that new trendy item.

One method to use to reinforce budgeting is to remind your pre-teen about the 50/50 rule. Half of money they make from allowance, dog-walking, babysitting, or any other side jobs needs to be put into savings and the other half can be spent.  This not only helps improve their financial responsibility, it helps set them up for success when they need a down payment on a car, need the first and last month for rent deposits, or even purchasing their first home.

I highly encourage all pre-teens to get a savings account if they haven’t already.  That way they have a safe place to put their saved money where it also won’t be a temptation.  While having a savings account is a big step in the right direction, knowing how to care for a savings account is also just as important.  The pre-teen should be taught how to reconcile their account monthly so they know how much they are saving and so they can double check that the bank didn’t hit them with any fees.  It should not cost any money to have a savings account.  If it does, look for an account elsewhere.

The other 50% of the money they earn can be spent however they want.  The most valuable lesson for the spending percentage is saving up for something that takes a bit of time to get to.  This is a very rewarding task and teaches a work ethic as well.

For the parents, it is also important to decide what types of things you will require your child to use their own money for.  While you may pay for your child to go to the movies, maybe any movie theater snacks are their own responsibility.  It’s important to start slow as they are still dependents.

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