This Millennial saved $100,000 with this useful financial habit
Richard Meadows isn’t your average 26-year-old. A business journalist with student loan debt, Meadows managed to save $100,000 in four years by employing several money-smart goals. However, he attributes his success to one thing: tracking his wealth.
“If you’re not measuring something, then you don’t have that feedback loop,” Meadows said. “You don’t know whether you’re heading in the right direction.”
Here’s how Meadows got started heading in the right direction.
Negative net worth
It all began when he researched his own net worth. What he found surprised him.
“My savings and other assets were completely wiped out by my debts — and then some,” Meadows said.
After realizing he had a negative net worth, Meadows created spreadsheets and goals with the intention to quit his nine-to-five job. He began tracking his net worth monthly, which eventually led him to achieve his goal of saving $100,000.
“Things really started humming along after I customized a spreadsheet to track my net worth,” he continued. “Every month I got a little buzz out of seeing the number climb higher and higher. I could also tell if progress was slowing, and give myself a metaphorical kick in the butt as required.”
To calculate your net worth, add up all of your assets. This includes your home, car, savings, investment accounts, jewelry, and other valuables. Then, add up your liabilities. Liabilities include loans and debts. Finally, you subtract your total liabilities from your total assets to find your net worth.
Track every penny
Following in Meadows’ footsteps, you can track your net worth with budgeting apps or personal spreadsheets. While this was the first step to his success, raking in those six figures also takes hard work and dedication.
“Sorry to disappoint, but there is no magical way of getting rich,” Meadows said. “The true ‘secret’ is simple: Live on less than you earn. Save and invest the difference, and let compound interest do its thing.”