The impressive sum of $100,00 is more than most of us will ever see in our bank accounts at one time throughout the course our lives. That makes the notion of saving up that much by your 30th birthday somewhat laughable, unless you’re the next Mark Cuban or Steve Jobs. But the truth is, it’s actually a very attainable goal for anyone willing to persevere and stay committed.
For the sake of argument, let’s make the assumption you’re reading this on your twentieth birthday. That gives you exactly ten years to reach that goal of $100,000, and the key to getting it done is to break the task up into manageable chunks that are a little less intimidating on their own.
Let’s take the example of your morning cup of coffee. The cost of a single serving from your favorite coffee shop may be inexpensive enough to not seem like you’re spending money at all, but over time that small amount can add up. Let’s assume that a cup of coffee is $2, and that you buy your coffee 5 days a week. That’s $10, without taking tax or gratuity into consideration. Over a month that’s $40, and over a year it’s $480. Over ten years? $4,800.
And that’s just coffee. Other habits can cost even more: drinking alcohol, smoking and vaping, and playing the lottery are all relatively minor expenditures that we don’t think about because individually, they don’t seem that significant. When any money leaves your wallet on an ongoing basis, you need to look at it from the perspective of its cumulative cost over ten years.
This is the opposite side of the “small savings” coin. As much as you can save by changing a habit, all that savings can be wiped out with a single bad financial decision. A few examples of mistakes you should avoid include buying a car you can’t afford, not purchasing health insurance, damaging your credit score with late payments, or co-signing for a friend on a lease or loan. Any of those common money errors can tank your dreams of saving $100,000 by thirty on their own.
While not a mistake per se, student debt is something you need to carefully weigh before taking it on. It can easily reach amounts up to $100,000 for a master’s degree, and the interest rate on it can be staggeringly expensive over time. Be sure that your degree is going to be worth the expense and you’re going to be able to actually find a job once you’ve completed your degree program.
If you combine those two concepts, small savings adding up to big and avoiding costly mistakes, you’ll be well on your way to reaching your goal of saving $100,000 by age thirty. Other options to help speed along your progress include working a second job, setting up some form of passive income, using signature installment loans strategically, or investing.
The key is to stay committed to your goal and keep your eye on the ball. If you do that, you’ll turn thirty and find yourself with more savings in your bank account than most people have at any given time in their life. Isn’t that kind of financial security worth the sacrifice?