We’ve all felt it before, right? That sinking feeling in the pit of your stomach when you sign into your online banking account and discover that your balance is…a whopping $2.26.
It was just the sort of wake-up call 20-something Grant Sabatier needed to make a change.
In a 2017 interview with The Washington Post, Grant reflects on that low point: "I remember having this intense feeling of honestly just…lack of control. I never wanted to feel that way again."
And so, he took a photo of that $2.26 balance, and resolved to save so much money that he could retire early if he wanted to. Fast forward a few years, and that’s just what he was able to do—at age 30. Now 32, Grant runs the blog Millennial Money, a favorite of ours here at The Dime, where he details for others how to save more money, make more money, invest intelligently, fast-track financial independence, and reach early retirement goals.
What’s Grant’s secret sauce? Here are his tips for saving success, as outlined in his Washington Post interview:1. Find a side hustle
Having dabbled in website development for a few years, Grant taught himself digital marketing so he could land a gig at a digital agency. Despite getting a big raise and nearly doubling his salary, he still wasn’t making enough to reach his financial independence goals. So he took on multiple side gigs to supplement his income, including launching a consulting company, selling concert tickets, and building websites for businesses.2. Make saving a daily habit
When Grant committed to saving enough to retire early, he set a $1 million goal for himself. An amount that large, however, can feel intimidating and nearly impossible to reach. According to Grant, "It’s difficult for us to think about the future. So how do we bring the future into the present and use that to our advantage?"
He decided to make that million-dollar finish line feel more attainable by focusing on the near term, calculating that he’d need to save $50 a day with an assumed 5% rate of return over 30 years in order to reach the $1 million mark. He started investing just $5 a day in the stock market and gradually increased the amount until he reached his $50 daily goal—but he didn’t stop once he got there. He also contributed any extra cash that came in, whether it be from a bonus or freelance work.3. Invest your extra cash
Grant credits his decision to invest his savings—rather than store it away in a savings account—with helping him attain his long-term financial goal. But if you think investing has to be hard, think again; there are a bunch of intuitive apps and platforms out there to make the entire process easier to understand (and even fun). One of our faves is Acorns, which gives you the option to round your purchases up to the nearest whole dollar and invest the difference.4. Keep boosting your savings rate
As Grant’s income increased, so did the percentage he committed to his savings. While he started off saving 15% of pay, he soon increased that to 25%, and eventually to 40%. If that's too aggressive for your personal situation, try instead boosting your savings in small ways; even small, gradual bumps can have a big impact over time. For example, commit to saving $10 more this week than you did last week, or to increasing the percentage of pay contributed to your retirement plan by 1% every few months.5. Reduce your monthly expenses
Of course, if you truly want to meeting your long-term financial goals, you should also decide where you can scale back your monthly expenses and spending habits. Consider downsizing your apartment, re-evaluating your insurance, utilities, and cell phone plans for reasonable cuts you can make, and reining in your weekend spending. Grant suggests that you might also find big savings in selling your car, getting a roommate, or renting out your apartment through Airbnb when you’re out of town.6. Remember your goals
Be wary of "lifestyle creep" and how it can threaten the financial goals you’ve set for yourself. Even Grant succumbed to living a little too comfortably after years of spending frugally and stashing away as much as he could. "Just because you can [afford to] do something, doesn’t mean that you should," he says.
To ward off the tendency, do personal check-ins regularly to remind yourself of the hard work you’ve put in and how far you’ve come in your journey toward financial independence. Be real with yourself about your spending habits, and if necessary, cut back—even if it means opting for the $10 bottle of wine instead of the $20 bottle.
Looking for more great advice from Grant Sabatier? Check out Millennial Money for his fresh take on a host of personal finance, investing, and early retirement topics; his new book, Financial Freedom: A Proven Path to All the Money You Will Ever Need, which will be released in February 2019; and this podcast interview on another one of our faves, "So Money with Farnoosh Torabi."