When I finished my education, trying to increase my savings was the last thing on my mind. When I graduated from DePaul University in 2017, I immediately took a trip to California with my girlfriend for a week. It was a celebration of our four years and the limitless future that lay in front of us.
Days spent on long, sprawling beaches baking in the sun. Nights exploring new areas and finding little dive bars. It was one of the best weeks of my life.
Then I flew home.
And reality came up and punched me in the face.
I remember sitting at the kitchen table when my mom pulled up a chair and said,
“Look, we need to talk about your money situation.”
She explained that I had less than one hundred dollars in my savings account and (way) more than one hundred dollars in student loans to pay back. For some reason, I had always assumed my financials were in a far better place.
Since my sophomore year in college, I worked part-time and even worked two jobs during my junior and senior years. I failed to realize that, outside of student loans, just being at college is expensive. I split rent with my parents, went out with friends, ate at restaurants, and traveled frequently.
Worse, I didn’t even have a full-time job setup upon graduation, working a lower-paying internship for a local oral surgeon. Something needed to change, or else I would be facing real financial obstacles well into my twenties.
Fast forward three years, and I have a five-figure savings account with a plan to reach six-figures in the near future.
Here are a few of the more bizarre things I did to increase my savings.
Spent “fun” money more frequently
When you want to reduce sugar in your diet, you can either eat sugar in moderation or completely cut it out.
If you decide to stop consuming sugar altogether, you may find yourself frequently reaching for other foods to satisfy your sweet cravings like refined starches, processed fats, and white bread. Consuming sugar in moderation means enjoying a sweet treat every once in a while to keep the craving at bay, but reducing the likelihood of overindulgence.
I feel the same way about spending money.
I spend smaller amounts of money more frequently. And I don’t beat myself up for buying coffee or a few sale t-shirts. It satisfies that craving to spend.
But when it comes to bigger, more expensive things that I probably don’t need, I seldom make the purchase. There’s nothing worse than buying something in the moment and then watching it collect dust for the next year.
When I began my savings journey in 2017, I would resist buying anything for a long time and then cave and “reward” myself. Now, I spend little amounts often that don’t add up to those bigger spends.
Started carrying cash everywhere
Cash already feels like an old-world commodity.
But it remains the single best way to limit your spending.
We have become so obsessed with “building credit” and getting rewards like cash back (which is exactly what banks want) that we forget how to spend money efficiently.
Are you going to dinner with friends? Leave your card at home and bring twenty dollars.
Are you grabbing a drink after work? Use the ten dollars in your wallet and then drink water once it’s spent.
I used to hate the feeling of getting a bill, throwing my card to the waitress and then waking up the next morning to realize I spent way too much money.
Bringing cash makes it more difficult to spend — which is a good thing.
Set recurring payments to automate everything
When you’re trying to build a savings portfolio, automation is the key to your success.
I automate my investments, remaining student loans, credit card payments, 401k contributions, and savings account contributions.
Every time I get paid, a predetermined amount of money is taken out of my checking account before I ever see it. This strategy makes sure I don’t spend money I don’t have.
It also guarantees that I am contributing the same amount to my 401k, general investing, and savings account each month. Early on, I would pick a random amount from my checking and put it towards my savings when I felt like it. That just doesn’t work.
To increase your savings, automate everything.
Sold my car and invested in a bike
My 2007 Mercury Sable had a good run. But it was expensive.
Each month, I spent around one hundred dollars on gas, fifty dollars on insurance, and had a recurring $250 payment for my car loan. That doesn’t include oil changes, car washes, and random trips to the shop for various fixes.
In March, I bought a $700 bike. That’s it. I only have to spend more if I want to make upgrades. Instead of ubering, I bike. Instead of taking the train, I bike. Especially now, as remote working becomes more popular, a car doesn’t feel necessary in your twenties.
The $700 has already surpassed how much I would have spent if I still owned my car.
Built income streams beyond my salary
No one ever talked about freelancing in college.
Or writing outside of your career.
Or making YouTube videos.
Everything was focused on obtaining that single job that would provide a steady income and stable life. I quickly learned that this way of thinking just wasn’t financially sound advice. First, without much experience, it’s nearly impossible to find a really high paying job. “Good” companies want internships (which are often unpaid), a portfolio, and skills that most recent college graduates simply don’t have.
Even if you obtain that job, it can take years to move up and increase your salary.
Instead of waiting to climb the corporate ladder, I started working to make money in my free time. Weekends were spent pounding out articles on Medium. Weeknights were for learning the ins and outs of freelancing. Leisurely time included memoirs about business, books about investing, and podcasts on personal branding. Now, I make an extra four-figures each month on top of my salary.
Diversifying my revenue streams has allowed me to make substantially more and, in turn, rapidly increased my savings.
In my honest opinion, the battle to increase your savings is mostly mental. You need to learn how to spend smarter, save better, and be creative with your income.
- Spend less more often to save. Does that make sense? Satisfy your craving by making little purchases that prevent bigger, unnecessary ones.
- Bring cash with you to cap how much you spend in an evening. Credit cards have their obvious advantages — you don’t need to explore them over dinner with friends.
- Set recurring payments to automate your savings. Determine what you want to save each month and invest it into buckets that will make you money (interest), prepare for retirement (401k), and limit spending.
- Rethink transportation. It doesn’t have to be a bike, but really consider what options you can do to avoid a car and travel cheaper.
- Don’t hyper-focus on your salary as the only way to make money. Build up many different side hustles that can accelerate your savings.
Hopefully, you can implement a few of these strategies to help you increase your savings. Three years later, they have helped me feel confident about my financial future, not fearful.