They say if you can save 25 times annual expenses that you can retire so lets play a fun game of thinking in terms of 25 times saving goals. Below is a fun list to get you to think differently about money. I believe we all have the opportunity to win with personal finance and it merely begins with choices. The choice to save 25X expenses is very difficult and I wont sugar coat it. But with every passing day and year, you can get a bit closer. See below for the 6 creative ways to save and eventually replace income.
6 Creative Ways to Save and Eventually Replace INCOME
If you’re gifted or find any sum of money, take that amount and multiply it by 25 times so that it can be put in a savings account. Find- .25 cents X 25 = 6.25 cents – Find 1 dollar X 25 = 25 dollars. Gifted – 10 dollars = 250 in savings. (obviously if the gift is a big sum, do as much as you feasibly can to match it or double it)
Save an equivalent of an hour of pay either every day, every week, biweekly or monthly on top of the usual savings goals like 401K, emergency savings, etc. This will help you reach the 25X savings goal that is so elusive. EX1 – 30 dollars an hour you earn, and 30 dollars a day you will save – = Savings of 900 dollars monthly (baller status) EX 2 – 30 dollars X weekly = 120 dollars saved monthly.
Save 25% of any bonus, tax return, or windfall to help achieve the 25X goal.
Every 25th day of the month save any amount you can spare as extra motivation for this gigantic savings goal.
Save an amount equivalent to your birth year. If born in 1985 / 25 =79 dollars – Save 79 Biweekly to get you to your goal of saving 1985.
Do not use plastic of any kind. Cash is king, and plastic has been studied to show that you tend to over spend by 20% when swiping – simple yet effective way to not overspend thus helping you save 25X expenses.
Tweet ThisOK so that is my list of ways you can go about replacing your income. I think we all can do our best to succeed with money management ideas. Get creative to find a system and stick to it. Money is only helpful when used correctly. If you use it foolishly it will soon disappear from your life. The best way not to let money slip from your hands is to stay focused with the 25 times expenses rule. I hope to one day be closer towards the 25 X goal. If the market behaves this year and I am able to save a good amount by the end of 2017 I will be around 2X closer to this great milestone.
Also this 25X goal should be flexible depending on passive income sources to help you save a lessor amount. For example if your expenses are 30,000 a year but you make 10K from a cool blog, your annual expenses can be reduced to 20K. Which in turn gives you a 20,000 X 25 savings goal of 500,000. (Instead of 750K with 30K of expenses)
Comment on the 6 Creative Ways to Save and Eventually Replace Income
Rich Uncle EL
Interesting formula! I would add that if you can keep credit card spending in check (i.e. you don't overspend and pay your balance in full each month) using credit cards can be beneficial if you have a rewards/cash back credit card. It also helps build your credit score which will help with home loans, car loans, etc. Unlike with cash, you will be receiving money back on those purchases (which you were planning to make anyway) and don't have to visit an ATM to replenish the cash.
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I was actually talking to my boss about the 25x annual expenses rule. He looked at me like I had three heads as he had never heard of that before. When we walked through it he understood the mechanics but I could tell he was pretty skeptical about it. I'm sure it'll be a matter of time before he converts 🙂