Episode #62: The Two Money Mindset Hacks I Used To Save 6 Figures In My 20’s

Most people think of their 20’s as a time to enjoy spending their money on living.  They say they’ll start to focus on saving more money in their 30’s, but in their 20’s they just want to relax, have a good time, and use their money to experience life instead of worrying about saving so much.  The truth is though, you CAN do both.  It doesn’t have to be this all or nothing approach society tells us it is.  

You CAN manage to enjoy your money throughout your 20’s while still building yourself a solid financial foundation to enjoy, and reap the rewards of, when you start to get a little bit older.  

I know this because I’m speaking from personal experience.  I accomplished almost all of the financial goals I set for myself in my 20’s, while still enjoying living throughout this decade of my life!  I earned a fairly normal salary (I was working as a wedding photographer at the time), and was able to accomplish goals like buying my first home, working for myself, creating a 12 month emergency fund, and starting a healthy retirement investment portfolio by almost always maxing out my RRSP and TFSA accounts.  AND, I didn’t live like a hermit in my parents’ basement while I was doing this.  I went out with friends, ate at restaurants, ordered at coffee shops, travelled, and generally did all the things we’re told never to do when trying to save lots of money.

When I look back on this time, I realize that everything I did came down to two money mindset hacks I used regularly (and still use today), and in today’s episode of the How To Adult Show I’m going to share them with you.   These are easy money mindset tricks you can start implementing tomorrow to start working towards your financial goals, while still spending money on the things that you enjoy today.

Get Crystal Clear On Your Big Life Goals

This first mindset hack is what will allow you to control your spending without feeling like you’re ‘doing without’ all the fun things in life.  You need to get crystal clear on your big life goals, and your big financial goals.  And I don’t mean just saying ‘oh I’d like to buy a house, and maybe one day I want quit my job to run my own business and work for myself, and I’d like to drive a fun car and take a two week vacation somewhere warm each year.’  No.  Those are vague and wishy-washy goals, and they’re not going to get you anywhere.  

You need to set yourself goals that you can see with absolutely clarity in your mind’s eye down to the last detail, AND you need to set goals that are adapted to your realities to make sure they’re attainable.   For example, you want to buy a home before you’re 30?  Based on your current salary and your salary projections in your job, what area can you reasonably buy a house in?  Should you be focused on buying a home, or maybe a condo is a better first purchase for your budget and lifestyle?  On your current salary what level of mortgage can you realistically afford, and how much of a down payment do you need to save to make the purchase?  How will you save this down payment?  You need to get into the nitty gritty details of your goals, create a clear picture of what you want and why you want it, as well as setting up steps for yourself to get there.  

Once you’ve become crystal clear on your goals, you’re going to review these goals a couple times a year to make sure this is still what you want, and to reset your vision of these goals if you need to make any adjustments.  What this is going to do for you is to create this clear image of the ultimate goals you’re working towards, so that you can contrast this image with your small daily purchases, to see if that purchase is something you actually value spending money on compared to your overall big goals.  It’s going to help you quickly identify if the purchase you’re considering making is just an impulse or a bit of societal conditioning telling you to ‘buy the thing’, and you’ll quickly be able to outweigh that purchase when you compare it with the goals you’ve set for things that you really do want in your life.  I did this all through my early and mid 20’s all the time, and I still do it now although my goals have changed.  

The things I decided were the most important to me in my 20’s were to be able to work for myself, to do this I knew I needed to save up a 12 month emergency fund to feel safe as a self employed person, I wanted to purchase at least one property or piece of land while I was still in my 20’s, and I wanted to save a substantial investment portfolio as early as possible to give it as much time as possible to compound and grow for my future retirement.  I consciously weighed every single purchase and money decision against these goals to find my way forward, and I never felt like I was ‘doing without’ because I felt confident that my goals mattered more.  

Every decision you make, from where to live, to what your transportation choices are, to how often you go out to eat or take your parents up on their offer to come for dinner and enjoy free food every night, all of these decisions can be made with a clear idea of what your ultimate goals are, and what the life you ultimately want to be living looks like.  Overall you’ll be amazed by how easy it becomes to defer the immediate reward of spending money now, so you can enjoy a more comfortable life later.  

If you use this as your guiding principal you’ll be able to change your mindset from ‘I don’t have all these things that i want’, to ‘I’m happy to do without these things right now, because I know soon I’ll have enough money saved for these things that I really want in the long run.’

Now, I know I know, everything I just said probably sounded like ‘don’t spend any money now so you can have more later’, which is not what I promised you at the beginning!  I promised you two mindset hacks that will allow you to enjoy spending your money NOW, while still saving and working towards your financial goals.  So this brings us to mindset hack #2, which you’re going to want to use alongside your crystal clear goal setting work.  

Learn To Spend According To Your Financial Values

If you’ve never tried this practice before, you probably have no idea what your financial values are.  This is completely okay, because most of us have no idea what our own unique financial values are because we’re constantly inundated by messaging and advertising telling us we need to spend all our money to buy all the things.  We go through life spending money on travel, and eating out, and our skincare routine, and new clothing, and new hobbies, and new decor for our homes, and new seasonal decor to be festive, and gym memberships, and tickets to entertainment, and toys for our pets, and the list goes on.  We’re so convinced that we need all these things, that most of us end up feeling like we never have enough money and we never have enough of the things we want, even as we sit surrounded by our overflowing closets and makeup bags and junk drawers and garages filled to bursting with the many things we’ve bought.   

So, your job, over the next few months, is to identify what your financial values are.  These are the things that you spend money on that help you truly enjoy life.  The things that you get huge value from, and that would make your life feel pale and boring if you stopped spending money on these things.  The way that you start identifying your financial values, is by tracking your spending for a few months and reflecting on your purchases.  I teach a complete course on expense tracking and values based spending if you want to learn more here.

Then, once you know what your financial values are, you’re going to stop spending money on the things that don’t align with your values.  You’re also going to choose 3 of your top value categories that you will happily allow yourself to spend money on, (within reason) that will keep your life feeling happy and fulfilled.  You’re going to allow yourself to spend money on these three categories, and you’re not going to allow yourself to spend money outside of these categories. All of this money you’re going to start saving will go directly towards saving for the long term goals you set in step #1.   

What you’ll find after a few months of spending according to your 3 financial values system, is that you’ve saved a lot of extra money without feeling like you’re ‘missing out’ on spending money on fun things in life.  This is because by allowing yourself to spend freely according to your financial values, you’re spending money on the things that make you feel the most ‘abundant’ in life, while no longer spending money on things that may have been subconsciously draining you without you even realizing it.  This values based spending system is the key to helping you save money, while still allowing you to live the ‘fun’ and abundant life you enjoy!

Linked Resources

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