First, let me start off by saying saving money was something I started to practice early on in my teenage years.
Although, I wasn’t taught much about money growing up, I was always told to save a portion of your earnings. For some reason this stuck with me early on. Whether I was making $15 a day helping my mother clean apartments in the city or $7.25 an hour working at Mcdonald’s, I always made it a habit to save at least $5 from my pay. My approach was always the same: save some, spend some. I always liked having money, and hence with time I became a natural saver.
Fast forward to when I graduated college, my initial plan was to move out on my own. However, my first job out of college as a litigation paralegal only paid me $28k per year. I knew this salary wouldn’t be enough to cover the lifestyle I wanted so I decided to move back in with my parents. I was surprised to see how much I was able to save while having a low paying job in that one year.
This low paying job turned out to be a blessing in disguise. It helped me see it is not always about how much you make, but what you do with what you make. After my first year as a litigation paralegal, I went into teaching. My first year salary was $34,000 and so I decided to continue living with my parents. I will admit it wasn’t always easy living with my parents as an adult, but it was by far the best financial choice.
Within a few years, I was able to save $72,000 by 27 on a teacher’s salary. For context, at the time, I was not married, had no kids, lived in a high cost of living area, and made less than 6 figures. I also didn’t know much about financial literacy during this time, but, by making certain financial choices in my life I was able to do this.
Here are 5 helpful tips on how I was able to save $72,000 by the age of 27 on a teacher’s salary.
1. I set a money goal.
Early on in my 20s, I told myself, my money goal was to save enough to buy myself a home once I moved out of my parents house. Every time I saved money, I knew I was that much closer to buying a home.
Tip: Ask yourself why you want to save and make a plan to work on achieving this goal. Having a goal, will help motivate you when times get hard.
2. Regardless of my spending habits, I always made sure I paid myself first.
Paying yourself first means every time it’s payday, you set money aside in a high yield savings account. Every time my direct deposit hit my account, I transferred a portion of my earnings into my savings.
Tip: Ideally, you want to set automatic savings transactions every time you get paid. This is how you make sure you always save a portion of your pay without thinking about it or being tempted to spend it elsewhere.
3. I decreased my spending.
Decreasing my spending was a big money move I had to make since I had a low income salary. I managed to decrease my spending on the three biggest expenses most people have: housing, food, and transportation.
I saved on housing by moving back with my parents. (This is a privilege I’m forever grateful for.) I saved on food by having home-cooked meals and packing leftovers for lunch. And I saved on transportation by carpooling and using public transportation. Decreasing my spending in these 3 categories alone, gave me the ability to still be able to save a lot of money even while on a teacher salary. In addition, because of this, I also had money left over to spend on things that mattered to me.
Tip: Go through your monthly expenses and see where you can significantly reduce your expenses. Cancel a few subscriptions, get a roommate, move back in with parents, meal prep, or start taking public transportation, etc. Once you find where to decrease your spending, the extra money you have can go towards your savings.
4. I prioritized what I wanted to spend money on.
Although I loved to shop, go out, and travel, I made sure I never overspent because I did not want consumer debt. Therefore, I would usually rotate these categories monthly. I knew that if I didn’t pay my credit card statement on time and in full, I’d have to pay interest which was a big no no for me. So, I made sure that I prioritized what I wanted to spend money on every month so I would not go into debt.
Tip: Look into budgeting (I didn’t know about it back then), but it’s a very useful tool to help you create a better spending plan. A budget helps you keep your finances organized and prevents overspending. Explore the four common types of budgeting methods.
5. I increased my income.
I could only decrease my spending so much, so I had to think of ways to increase my income as a teacher. First thing I decided was to work at a charter school. This meant that although, I had longer hours, my pay was more than the average NYC teacher salary for someone my age. So as my salary increased every school year, so did my savings rate.
However, as time went by, I was still making under 6-figures but now had the desire to reach my money goal faster. So I started to side hustle to make additional income. I started tutoring and selling clothes I no longer wore online to make extra cash. In return, this extra cash went to my savings account.
Fast forward, at age 27, I was able to save $72,000. Saving $72,000 by 27 on a teacher salary was not something that happened overnight but is something I am very proud of. I know saving money is not always easy and it takes time to build up. But remember the most important tip is to start! Start by saving an amount that is realistic to your economic situation now. In time that amount will add up. Then more you see your savings increase, the more you’ll want to save, and the closer you will get to your money goal(s),
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