By Bola Onada Sokunbi for Sapling
Saving a large sum of money can seem unrealistic, especially with a mortgage, a $54,000 salary and no outside contributions. But it’s very much possible. In three and a half years—starting right after I graduated from college—I saved more than $100,000.
Here’s how I did it.
When I first started working full time, I didn’t have a clue how to save for retirement (though I’ve since learned about asset allocation, diversification, fees and all that fun stuff). All I knew was I was being offered free money through my 401(k) employer match (they matched 100 percent of the first 6 percent I contributed) and I wanted it. By contributing 15 percent of my salary, I was able to put away about $40,000 in three and a half years.
If your employer offers a match, you have to take it. If you can’t afford to max out the contribution right away, raise your contribution rate by 1 percent each quarter or year until you get what’s yours.
Keeping my expenses down was another big factor. After contributing to my retirement account and paying for health insurance, my main expenses were my car ($150), auto insurance ($80), housing ($900) and utilities and cell phone ($170). I lived close to work, so I didn’t have to buy gas often.
Whatever I had left over, I tried my best to save. “Going out” was hanging out at a friend’s house with Netflix and board games. I also packed lunches, worked out at home or the park, carpooled and didn’t eat out often.
My first year working, I tried to save at least $600 from each $1,350-$1,400 paycheck. I also saved my annual bonus of $1,500 (after taxes) and the bulk of my tax return. This allowed me to save about $18,000 per year, which totaled well over $50,000 after three and a half years.
The best move I made was making my cash savings automatic. The money was never in my main checking account, so I never saw it. You can’t miss what you don’t have!
About a year and a half into saving, I became very interested in photography. I took a bit of money from savings, purchased some mid-level equipment and ended up with a very profitable part-time photography side business. I reinvested some of my profits into the business—$10,000 the first year, $30,000 the second, and more in subsequent years—and put the rest into savings. I worked hard, but it was worth it.
A version of this post originally appeared on Sapling.