I'm 19 and I always spend my money on stuff I don't need and I'm trying to save enough money to build a tiny house in the next two years. Any advice on how to save up about $10,000 and stay disciplined?

closed as too broad by Chris W. Rea, Victor, Dheer, JoeTaxpayer Feb 11 '16 at 10:49

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    This isn't really about money, it's about learning self-discipline. – jamesqf Feb 6 '16 at 18:12
  • Care to expand? – user37498 Feb 6 '16 at 18:27
  • Well, I can try :-) You admit you always spend your money on stuff you don't need. Learning to not spend money on such stuff takes self-discipline, which is really nothing to do with money. You can be making minimum wage, or (like too many celebrities to list) millions, and still spend all your income that way. – jamesqf Feb 7 '16 at 5:35
  • There are similar previous questions, e.g. money.stackexchange.com/q/5008/25282 Perhaps duplicate would be a better close reason than Too Broad, but this isn't a great question. It gives no details except 19 (probably irrelevant) and $10,000 in two years. Income? Expenses? Savings? In the end, the answer to the question as stands is going to be to stick to a budget that saves $5000 a year. The linked question has some suggestions for that. – Brythan Mar 4 '17 at 23:29
  • This is an excellent question that has a couple of good, concise answers. It is not too broad, and while Brythan makes the argument that it lacks details, I would argue that it’s lack of details in this case makes for a very good canonical question. Please join me in voting to reopen. – Ben Miller Jun 6 at 1:45

Take a certain percentage of your income (say, 10%, but more is better if you can) and put it aside with every paycheck. Some employers will even allow you to direct deposit your paycheck into two different accounts and you can specify a certain amount or percentage for the second account. Your savings will go directly into a separate account as if you never had it in the first place.

Consider your savings untouchable as spending money. Watch it grow.

There's no other secret, you just have to do it!

  • You can also have your bank automatically transfer money between accounts. One way to do this is to have three accounts: 1) A checking account into which your paychecks are automatically deposited, and your monthly bills are automatically paid out of. 2) An "allowance" checking account that you use for weekly expenses, which receives weekly automatic transfers from your paycheck account. 3) A savings account. (Having a savings account boosts your credit score.) If you get married, each partner can have their own "allowance" account. – Jasper Feb 6 '16 at 18:51

The key to this is budgeting.

Without a budget, you don't know what you are spending your money on. Let's say you would like to go to a movie with a friend. Can you afford it? Without a budget, it is difficult to answer this question. Yes, you have enough money in your wallet, but if you don't go to the movies, you could be saving that money for a house. "But," you might say to yourself, "surely one movie with my friend won't prevent me from saving my $10k for my house." And you might be right, but when you add up all the movies, coffees, and other discretionary spending up, it very well could.

At this point, you might be discouraged. "Do I seriously need to give up every single extravagance to make this work? I don't have that kind of willpower!" Luckily, here is where budgeting comes to the rescue.

Budgeting is simply a plan for your money. You have some monthly expenses that are more or less fixed: your rent, your utility bills, etc. You have other expenses that are not exactly fixed, but are still necessary: groceries, fuel for your car, etc. You also have longer-range expenses, such as insurance premiums that you only pay once or twice a year, but need to be accounted for. List all of these expenses, and figure out how much that comes to each month. What you have left over is available to you for other things.

Next, you need to figure out how fast you want to save for this house, and balance that with the other things you might want to spend money on, such as entertainment. If you start from $0 and want to save $10k, you could do it by saving $100 a month: in a little over 8 years, you'll have your $10k. If you can increase this to $300 a month, you'll be there in less than 3 years.

Now that you have a plan and everything is accounted for, very little willpower is needed. You don't need to feel guilty every time you buy coffee; if the money is there in your coffee/snacks budget, go for it. If you've got extra money for the month in your entertainment budget, take a date to the movies. Your budget allows you to spend on those things, because you have a plan in place, and are not in danger of spending your rent money or your home savings.

This can all be done on paper, in Excel, or even by placing cash in different envelopes. However, it is easier to use budgeting software, such as YNAB, Mvelopes, or EveryDollar.

  • But the OP does know what s/he spends all that money on: unneeded stuff :-) Making a budget doesn't help if everything not budgeted for necessary things gets spent. – jamesqf Feb 7 '16 at 5:37
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    @jamesqf Everyone spends some money on unneeded stuff. And if you try to eliminate all unneeded stuff, you are setting yourself up for failure. A budget allows you to determine how much unneeded stuff you can afford while still meeting your savings goals. – Ben Miller Feb 7 '16 at 6:23
  • But my point is that a budget will do you no good if you don't have the self-discipline to follow it. OTOH, if you have no desire to spend much on unneeded stuff, or have learned to control the desire, you really don't need a formal budget. – jamesqf Feb 7 '16 at 19:32
  • @jamesqf Yes, but my point is that a budget is a tool that makes the self-discipline task easier. This is exactly what the OP asked for. – Ben Miller Feb 7 '16 at 20:00

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