Financial Feminist - 37. How I Saved $100K at 25

Episode Date: August 18, 2022

For the first time ever (at least on the podcast), host Tori Dunlap shares her story of saving $100,000 at age 25. Whether you have financial goals like saving your first $100K, paying off debt, investing for the first time, or saving $1K –– the process Tori lays out in this episode can help you get there faster.  Get resources mentioned in the show, learn more about our guests, and read episode transcripts: https://herfirst100k.com/financial-feminist-show-notes/how-to-save-100k Learn more about your ad choices. Visit podcastchoices.com/adchoices

hello financial feminists hello i'm so happy to see you yet again thank you as always for continuing to tune into the show it makes me so happy and i love recording these episodes for you and our team loves producing this podcast for you and we hope you're getting a lot out of it. If you haven't already, hit subscribe wherever you're listening right now. You can stay up to date, make sure that you're getting notifications when new episodes arrive so that you don't miss anything. We are doing six episodes a month and then occasionally a bonus episode too. So we want to make sure that you get every single piece of Financial Feminist, every single piece that we have to offer here on this podcast. So the brand Her First 100K is for everybody, regardless of what that 100K looks like. Maybe it's 100K saved,

100K invested. Like me, my 100K was 100K saved slash invested. But maybe it's 100K debt paid off. Maybe it's 100K earned. Maybe it's 100k earned in your business. Your 100k can be whatever you want it to look like. For me, my 100k, her first 100k is the HFK origin story. It is the Batman origin story. It is the back alley behind the opera. That is what my 100K at 25 is for her first 100K, the brand. And so I'm so excited to break down that 100K for you today on the podcast, which we've never done before. And regardless of your age, regardless of your financial status, I promise you that you will take something valuable away from this episode. If you're not 25, no worries. If 100K seems lofty and super far away, no, not an issue. I'm going to be able to give you actionable tips and tricks that you can use and that you can take from that 100K origin

story and apply to your everyday life. So I'm a very goal-oriented person. I always try to set goals for myself that are slightly unachievable. I feel like a goal by definition should be something that scares you a little bit and should be something that's slightly outside of what you think you can accomplish. Because even if you don't hit it, well, you've still made progress. You've achieved something. So I remember actually back in the early days of my personal finance journey, I was probably 21 or 22. I was in my first job out of school and I was reading the financial diet. TFD was a huge part of my financial journey, especially early on. And now we collaborate and now we're friends, which is very cool. But I remember reading a blog post

on TFD about a woman who had a net worth of 100K at 25 years old. I was making $55,000 pre-tax at that time at my first corporate job, which was a good salary for right out of college, but definitely wasn't six figures. I was 22 living in Seattle, one of the most expensive cities in the United States. And I thought to myself, maybe I can do this. And I started crunching the numbers. And then I actually realized I might be able to do one better. Not 100K net worth, but 100K in the bank or in my investments. 100K saved slash invested. And I got to work. Now, the 100K at 25 was never supposed to be on my birthday. A lot of the press about me actually gets that wrong. It wasn't 100K before I turned 25. The joke was, as long as I can do it the day before I turn 26, it still counts,

100K at 25. So I successfully achieved my 100k goal when I was like 25 years and three months old. My birthday's in July. It was September of 2019 when I successfully hit $100,000 at 25. And I still remember the feeling of checking my personal capital account and seeing that 100k number. It was so validating and so exciting. One of the common things I hear when people read my 100k at 25 story is they go, well, you must have been living on oatmeal and ramen and had nothing fun. No, not even close. I went to Costa Rica with Christine in 2017. I traveled internationally. I went out to eat a lot. I lived in Seattle, still one of the most expensive cities in the United States. I was able to do both. I was able to balance the things that I loved, present me with 100k future

me. What kept me motivated to my 100k? Well, I am very motivated by numbers. I wanted to see that 100k. I wanted to see that 100k number. But really, the 100k meant options. We've talked about this so many times on this podcast. I talk about it so many times in my book. A financial education, a financial foundation means options. And I knew that 100k, that money in the bank, was my safety net so that I could quit my job and take her first 100k,, the brand, full time. That $100K was mission oriented. There was a why behind it. So when you're setting your financial goals, you have to make sure that you care about them. You have to make sure that they're larger than you. It's not just, oh, I want to become debt free. Why do you want to become debt free?

It's not just, oh, I want to become debt free. Why do you want to become debt free? What is that feeling of being debt free? Oh, I want to save $2,000. Why? Do you want to save $2,000 to go to Japan? Do you want to save $2,000 so you have more cushion in your emergency fund so that you're not panicked and stressed and staying up at night? For me, that $100,000 was important because I just like to see that number.

But beyond that, it was the permission slip because I just like to see that number. But beyond that, it was the permission slip that I needed to be able to quit my job and be an entrepreneur, which is a dream I've had ever since I was a kid. I want to talk about a moment that I didn't think it was going to happen. A question I get a lot is like, was there a time where you were like, I want to give up? This doesn't make sense anymore? Or what sort of pitfalls or mistakes did you make? This is actually the introduction of my book, Financial Feminist. I go into the worst financial mistake I've ever made. And that mistake was taking a job for the money.

I was able to negotiate $20,000 more than what a company wanted to pay me or originally offered. And I ignored a bunch of red flags and took that job anyway, because I thought to myself, well, even if it's not the best job, $20,000 more will make it tolerable. And the truth is, it did not make it tolerable. I talk about this more in the book. I talk about how I felt the toxicity of the job, but I ended up having to quit that job without another one lined up. And then I spent three months unemployed. So of course, I was no longer making money. I was no longer able to save any money to progress towards my 100K goal. I was, I think, 23 at the time. I was also spending the money that I had in my emergency fund.

So not only was I not able to save any money because I wasn't making anything, I was also actively spending the money that I had already saved. At this point, I hadn't announced the 100K goal publicly. It was still kind of in the back of my mind. And I just didn't know if it was going to happen. I didn't know if I was going to be able to hit the 100K goal. So it was an interesting time in my life in early 2018, where I was three months unemployed, spending time finding a job, finding not only just a job, but the right job, and wondering, I don't know if I can make it. I don't know if I can actually achieve my goal. But what helped was all of the things I'm going to describe to you next. It got me back on track.

It allowed me to continue progressing towards the 100K goal, even though I had had a temporary setback. So what went into the 100k? Let's break it down. First and foremost, privilege. Super important to acknowledge. I graduated college debt-free. And it wasn't because I'm a trust fund kid. And it wasn't because my parents are multi,multi-million-billion-trillionaires. It was because we sat down as a team and figured out, can I graduate college debt-free? It was a priority for my parents and it was a priority for me. My parents had been diligently, frugally saving money since I was a kid for my college fund. And I was working three jobs while at school. I would come home during the summers and work. My mom actually jokes that she went to more high school football

games my senior year of high school than I did because I was working my job. But the fact that I had supportive parents who had made smart financial decisions is 100% of privilege. And I graduated debt-free, which was an incredible gift, both that my parents gave and that I worked really hard for. And I would not have hit the 100K as quickly as I did if I had that student debt. So that's the first thing to acknowledge is I'm a cisgendered straight white woman. The 100K at 25 was hard work, but it was also privilege. Let's talk about the other components that were more in my control. The second thing was that I was focused on saving a percentage of my take-home pay from every single

paycheck, and that was automated. So we talked in episode 34 about bank accounts, about saving, and this is one actionable thing you can take away immediately. Set up an automatic transfer from your checking account to your savings account. I was saving a portion of my paycheck automatically without having to think about it. It was going into my emergency fund. It was going into my Roth IRA. I didn't have to think about it. At the height of my 100K journey, I was saving 27% of my take-home pay. Now, 27% seems like an arbitrary number. It kind of is. But what I realized is it was what I call my sticky number.

It was enough to allow me to progress in my financial life. It didn't allow me to spend money on every single thing I wanted or to buy everything I wanted, but it also didn't deprive me. It felt a little sticky, right? And you can find your sticky number by increasing your savings percentage. You can literally do this today. Not only can you set up that automatic transfer, but if you already have one, increase it 1%, increase it 2%. See how that feels. 27% was not what I started out with when I was making less money, when I didn't have as much flexibility in my financial life, when I was right outside of college. It was way less than 27%. And I worked up to that over time. The second

component was kind of what I just talked about, that I was making more and more money as I progressed. And that was because I negotiated my salary. I negotiated my salary every single time I changed jobs. And every single time, it was annual review time at my current job. And if I felt and knew because of market research that my job was not compensating me fairly, it was time to move on. We literally just released an episode a couple days ago with Sinia about job hopping and the importance of not staying complacent. It's so important to be compensated fairly at your current job. And if you are not being compensated fairly, advocating for yourself,

advocating for a raise, and or finding something different. I negotiated every job I've ever held, and I did not stay in a job that did not compensate me fairly. So I was able to increase my income in a short amount of time. I was able to save a larger percent of my income because I was making more. The third thing is that I focused on value based spending. We talked about this in a previous episode as well around stopping emotional spending around mindful spending. You don't have to stop spending money. I've said this before. You don't have to stop spending money. You just have to stop spending money on shit that you don't care about. I found the shit I did care about. And I spent a lot of money there, a lot of my discretionary money there, and I didn't spend much money elsewhere. That didn't mean deprivation. Actually, the opposite. It meant that I got to spend my money on the things that I really loved, like

travel or good food. Progressing in your financial goals does not mean deprivation. That isn't sustainable. We talked about that in that spending episode. But it is important that you figure out what matters to you, what you value, and then finding that balance between your financial goals and your current present life. And I was able to do that. and your current present life. And I was able to do that. I was able to spend mindfully on the things that I loved and either save the rest or put the rest of the discretionary money towards the things that I actually liked. The fourth thing I did was I started investing as soon as possible.

Now, regardless of how old you are, compound interest works for you, whether you're 18 or 88. Compound interest works. We have numerous episodes in the back catalog about how to invest. We have an investing 101 workshop that we'll link in the show notes. But I opened a Roth IRA when I was 22. And I did my best to max it out every single year. Now, again, when I was 22, 23, that would sometimes take the entire year. As I progressed in my financial life, I remember the first time that I got to my $6,000 max, I think it was like August or September, and I felt so validated that it didn't take the full 12 or 15 months. The $100K was not just the cash that I

was putting in a bank account or the cash I was putting in an investment with compound interest through high yield savings accounts and investing. That $100K was partially the cash I put in, but a lot of investment gains. That's the power of compound interest is that it's not just the money put in the bank, like the actual cash you're putting in, but the interest. So I hit $100K faster because I was putting money in an investment account. And the final thing, and probably the most important, I diversified my income and I had a side hustle. Her first $100K started as a side hustle. We'll do more episodes about our business journey in the future, but I had my nine to five in marketing. And then I was also able to save after taxes and expenses every

single dollar I made in my side hustle. At first, that was actually freelance social media marketing. I worked as a social media marketer into my nine to five and then I took on freelance clients on the side. Not only did this allow for a little bit more flexibility if I got laid off during that time where I didn't have a job, I had at least a tiny, tiny bit of money coming in. But I was also able to save and invest more money because I had more money to play with. I had more ability to save because I was making more money. You're able to fast track your financial goals when you make more money. One last bonus tip. I didn't allow lifestyle creep to happen to me. So as I progressed in my financial life, as I went from making $55,000 a year to

getting an annual raise, I think I was making $66,000 a year for a while. And then at my peak in my nine to five in my corporate career, I was making $77,000 a year pre-tax. So I was steadily climbing. I just realized that I made 55 and then 66 and then 77. I made 70 for a while in between there, but that's so funny. It's so random, the double numbers. But I didn't allow lifestyle inflation. What is lifestyle inflation? It is when you make more money or you get a raise or you get a windfall of cash thinking like, OK, I get to ball out. I get to move to the more expensive apartment and I get to buy the new car and I get to go out to eat now all the time.

Now, whenever I did get a raise or started making more money, yes, there were new things that I got to purchase or new flexibilities I got to have. But I lived in the same one-bedroom apartment for four years, actually up until last year, even when her first 100K was doing great. And that was because I was able to save more money. If you go from $55,000 a year to suddenly $66,000 a year, well, again, pre-tax, you have $10,000 more to play with. Spend a little bit of that, but save the rest or use it towards your debt or your wedding or whatever your financial goals are. Okay, so how do we take my personal 100k story and use these tips and tricks, make them applicable

to your life? One, automate your savings. Set aside that automatic transfer from your checking account to your savings account. And if you are doing so already, literally increase it 1% today. See how that feels. You probably won't feel it. Two, figure out what you really value. What do you want to spend your money on? We take you through an emotional spending practice in a previous episode. Again, we'll link it in the show notes. You'll find it. Go back. Number three, make sure you're negotiating your salary. Make sure you know if you're being compensated fairly. And if you're not, find a different opportunity. Either advocate for yourself at your current job and or go find a job that's going to pay you better. Again,

previous episodes around negotiating, around job hopping, those are all available to you. Diversify your income. Don't just be reliant on one source of income. And fun fact, a high-yield savings account is another source of income. You get interest from that high-yield savings account. Investing is another source of income. So even if you don't have time to work a second job or a side hustle, because I get it, the hustle, the negative hustle is real. Capitalism sucks. At least try to do everything you can to diversify that income. Have multiple sources of income. And last but not least, invest your money, even if it's just a small amount of money. So many episodes in our back catalog about how to invest, about retirement accounts for investing, about answering some

common questions about investing. But you can get started today with a small amount of money. And if you're already investing, increase your contributions 1%, 2%. See how that feels. And your bonus tip, make your goals mission oriented. And if you do start making more money, or if you do start making more money or if you do get some sort of windfall or increase be thoughtful about where that money goes thank you so much for tuning in as always if this episode connected with you if you feel like somebody else could really use this advice maybe a friend a family member your partner send this to them we always love and appreciate you sharing the show but especially with people who need it most. And I say this all the time, but make sure that you're not just a passive listener to these

episodes. Don't just listen and be like, okay, cool, that was fun, and then not do anything with them. We give you really actionable advice because we know it works, and we want you to be able to actually apply it to your life to see change. So set a money date with yourself, do some financial self-care, and maybe take some of the tips and tricks from today's episode to progress to your first 100K. Thank you as always for being here. We appreciate you, financial feminists, and we'll see you soon. Thank you for listening to Financial Feminist, a Her First 100K podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristen Fields,

marketing and administration by Karina Patel, Olivia Koning, Sharice Wade, Alina Hilzer, Paulina Isaac, Sophia Cohen, Valerie Oresko, Jack Koning, and Ana Alexandra. Research by Arielle Johnson. Audio engineering by Austin Fields. Promotional graphics by Mary Stratton. Photography by Sarah Wolf.

And theme music by Jonah Cohen Sound. A huge thanks to the entire Her First 100K team engineering by Austin Fields, promotional graphics by Mary Stratton, photography by Sarah Wolf, and theme music by Jonah Cohen Sound. A huge thanks to the entire Her First 100K team and community for supporting the show. For more information about Financial Feminist, Her First 100K, our guests, episode show notes, and our upcoming book, also titled Financial Feminist, visit herfirst100k.com.