Aim to Get $ 10,000
When you are a budding investor or investor, starting from scratch can seem like a daunting task. You have finance professionals who advise you to save 20 percent of your income and save double your salary by age 35 , while you struggle to pay rent and make student loan payments on time. Saving something can seem like a pipe dream.
But similar to splitting payments by debt or creating microtasks to achieve a bigger goal, starting small with your money goals and building on them can help you reach them faster than you might think. If you’re new to saving and investing, try to get the first $ 10,000 in your account before worrying about complex strategies or whether or not to invest in cryptocurrency.
I was inspired when I read about it in Money After Graduation – the blog of Canadian personal finance writer Bridget Casey – when I started my first job. As Casey writes, $ 10,000 is “achievable, but still great.” Reliable, but not entirely comfortable. It shows progress, but not completeness. ” In other words, it is definitely achievable, but achievable.
But how do you do it anyway? First: find out why saving and investing is important to you. Perhaps you need security, or you want to quit a job you hate, or you just love the idea of hoarding excess money. Whatever the reason, recognizing it will help you when the rainy day comes (and it always does).
Then remember that this will not happen overnight. It will likely take several years of consistency and intent. You will need to start with $ 100, then $ 500, then $ 1,000, and so on, but I like the idea of always keeping the $ 10,000 figure in mind. As I wrote earlier this week , this can help you cut some extra costs because you have a higher priority.
Here’s how to do it:
- Create a separate high-interest savings account (check online banks for the best deals) or investment account. As Casey writes, you need a dedicated space for this money so that you are not tempted to spend it.
- Create your own savings schedule. Consider the salaries and expenses you receive. How realistic can you put aside every paycheck so that you don’t have too much money on your credit card? Jot down your schedule in a dedicated notebook or use a tracking app. (Personally, I have a timeline that I drew by hand on a bulletin board in my apartment. When I make one of my saves, I check a box in one of the boxes.) As Casey notes, it takes about $ 834 a month. … year to save $ 10,000. Obviously this is a lot, so increase the timeline as needed.
- Set up automatic transfer from each salary. Then forget about it. In my first job, I set the automatic 401 (k) fee and then more or less didn’t check it again for a year. When I finally did it, I was amazed to see how much money had accumulated in the account. Likewise, I had an automatic transfer from my checking account to my savings account every week for several years, which paid off well.
- Use an app like Qapital to top up your savings. You can come up with rules or just have it run automatic translations for you. You can find more money saving tips from the experts here .
- Save extra money. If you have debt, it’s wise to set aside tax returns, birthday money, and whatever else to pay off, but set aside a little to help you reach your savings goal.
- Celebrate mini milestones. When you get to your first $ 100 or $ 1,000, take a moment to acknowledge your accomplishments. These are great things! Casey recommends celebrating with an additional fee, but you can always indulge yourself.
As Casey writes, hitting that $ 10,000 mark makes you feel a little different about your finances. This is when you are accumulating wealth and not just trying to strengthen your savings.
If you invested your first $ 10,000 in an average salary, it probably took you over a year, so you are no stranger to discipline when it comes to your finances. You’ve also watched it grow on its own through interest and dividends. It represents things that you did not buy, and therefore, you understand better than ever how many things you don’t need, and it gives you the opportunity to continue saving in the future.
It’s also a good benchmark for trying out riskier money moves, such as investing in one stock you’re interested in. Since you have a solid foundation, you can afford to try something out of the box without worrying about risking your overall financial well-being.
Saving $ 10,000 won’t be easy, but it’s a big goal that can push you to save a little more each month.