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How to save £100k (start these steps now)

Understandably, you might want to save £100,000.

After all, who wouldn’t want to have a cushion of savings for a rainy day like that?

Saving 100k will involve spending less, saving more, earning more and staying out of debt. The better you get at this process, including investing your extra money for more growth, is how you will get to 100k savings in as short an amount of time as possible.  

This article will outline some of the best ways how to save £100k and overcome the common challenges you can face when trying to reach this goal.

 So, keep reading for helpful tips and advice that will make saving £100k a lot easier.

How to save £100k

Know your numbers to reach £100k

It’s important to know your numbers when it comes to saving £100,000.

If you don’t know how much is coming in or going out, it’s going to be very difficult to make any meaningful progress towards £100k.

  1. What is your net worth right now? Everything you own minus what you owe. This is where you’re starting from.
  2. What does life cost you now? This is how much you spend a week, month and year.
  3. What is your savings rate? How much of your money do you get to keep each month?
  4. What is the gap between what you have now and 100k, and when do you want to reach 100K? This will help you figure out how much you need to save every month and year.

Once you have this data, you can start to put a plan together on how to reach your £100k target.

Update your mindset on how to save £100k

One of the most important things to remember when saving £100,000 is to have the right mindset.

You need to be motivated and determined to reach your goal, and you can’t let yourself get discouraged along the way.

It’s also important to be patient and stay focused on your goal.

If you’re not used to saving money, it might take some time to adjust your mindset around spending your money all the time.

Open vs closed mindset

When it comes to saving money, it’s important to have the right mindset.

A lot of people struggle to save £100,000 because they don’t think it’s possible, or they get discouraged along the way.

You’ll be less likely to save money if you have a closed mindset because you’re afraid of losing it.

On the other hand, if you have an open mindset, you’ll be more likely to save money because you understand that it’s important for your future.

So which mindset do you have?

If you’re struggling to save £100,000, changing your mindset and adopting an open perspective might be helpful. This will help you stay motivated and focused on your goal.

Remember, it takes time to save £100,000, but it’s not impossible.

Find the right mentors

An important part of the journey to £100,000 is to find the right mentors.

If you have someone to help guide you and give you advice, reaching your goal will be much easier. There are many different types of mentors out there, so you should take the time to find one that’s right for you.

Your mentors could be real people you know or virtual mentors you can read, listen to and learn from.

Some of your virtual mentors could include

  • Warren Buffet
  • Mel Robbins
  • Ken and Mary Okoroafor

Once you’ve found a mentor, check in regularly with their advice – even if virtually to keep you on the path.

Mentors can be a great source of support and motivation, so don’t hesitate to reach out to them when you’re feeling discouraged.

Evaluate your spending habits and find ways to cut back

Spending money wisely is a crucial action when trying to save £100,000.

If you’re not careful, you might spend more than you can afford and never reach your goal.

Evaluate your spending habits and find ways to cut back on unnecessary expenses.

This might mean limiting your grocery shopping, cancelling your TV subscription, or cutting back on nights out.

Cut back on unnecessary expenses

There are many ways to cut back on unnecessary expenses, and it’s important to find the best strategies. Here are a few tips to help get you started:

Set a budget and stick to it

One of the best ways to save money is to set a budget and stick to it. Determine how much you can realistically afford to save each month, and then make sure you don’t overspend.

Automate your finances

Automating your finances is a great way to ensure that you’re always putting money aside.

You can set up automatic transfers from your paycheck into your savings account. You can also use a budgeting app to track your spending and automatically transfer money into savings when you reach your budgeted amount.

Make use of online tools and resources

Some many online tools and resources can help you save money.

Money dashboard offers budgeting tools and advice, while sites like Moneysaving expert offer deals and discounts on everyday items.

Cut back on nights out

Going out for drinks or dinner can quickly add up, and it’s important to be conscious of your spending. Try to limit your nights out or find cheaper alternatives like happy hours or BYOB restaurants.

Shop wisely and avoid impulse spending

Shop wisely and avoid impulse purchases.

If you’re not careful, you might end up spending more than you can afford on things that you don’t really need.

Try to stick to a list when grocery shopping, and avoid buying things on a whim.

Try the Kakeibo budgeting method

Another great way to save £100,000 is to try the Kakeibo budgeting method.

Kakeibo is a Japanese budgeting method that helps you track your spending and save money.

To get started, create a list of all your expenses and then track your spending for the month.

Review your spending at the end of the month and see where you can cut back.

Stay disciplined with your spending

One of the most important things when trying to save £100,000 is to stay disciplined with your spending.

This means avoiding impulse purchases and being mindful of how much you’re spending each month.

It might be difficult at first, but you’ll be able to stick to a budget and save more money with practice.

Automating employer accounts

You can automate your employer accounts if you want to make it even easier to save £100,000.

This means setting up automatic transfers from your paycheck into your savings account or other designated account.

This will help you ensure that you’re always putting money aside, making saving much easier.

Invest money wisely in order to grow your savings

Investing money wisely is one of the best ways to grow your savings. When you invest money, you’re essentially putting it into a pool of funds that are used to purchase assets like stocks, bonds, or real estate.

Over time, these assets can appreciate in value, which can help you grow your savings.

Trying to save money takes a very long time without the added boost of your savings growing due to interest or dividends being added back to the pot to grow your money even faster.

You need to keep in mind a few things when investing, such as the risk involved, the fees associated with your investment, and your investment goals. But if you’re smart about it, investing can be a great way to reach £100k.

So how can you invest money wisely?

Here are a few tips:

-Invest in index funds: Index funds are a type of investment that tracks a group of stocks or other assets. They’re often seen as a good investment because they’re well-diversified, which means they’re less risky than investing in individual stocks and low cost.

– Understand your risk tolerance: Risk tolerance is the amount of risk you’re willing to take on when investing. Understanding your risk tolerance before investing is important because it will help you determine which investments are right for you.

-And understand the difference between risk and volatility: Volatility is the ups and downs of the market, while risk is the chance that you could lose money. Volatility is a normal part of investing, but it’s important to understand the difference between risk and volatility before investing.

– Think long term: Your goal is to reach £100k, so focus on that, not the short-term ups and downs of the stock market. The long-term trend is your friend.

-Use tax advantages accounts: ISAs and pensions are two examples of tax-advantaged accounts that can help you grow your money.

With an ISA, you can invest up to £20,000 per year, and any gains are tax-free.

With a pension, you can get tax relief on the money you contribute, and your investment will grow tax-deferred until you withdraw it in retirement.

Make use of online tools and resources to help you save money

There are a number of online tools and resources that can help you save money.

money dashboard: This free budgeting app helps you track your spending and stay on top of your finances.

– Top cashback: This website gives you cashback on online purchases. That’s extra cash in your pocket!

– Money-Saving expert: This website helps you save money by negotiating your bills, finding coupons, and more.

Candid money: This website has many financial calculators that can help you with everything from retirement planning to investment decision-making.

Staying disciplined with your spending and saving habits

One of the most important things £100k savers do is stay disciplined with their spending and saving habits.

This means being mindful of your spending, setting a budget, and sticking to it.

It also means creating a savings plan and making sure you’re automatically transferring money into your savings account every month.

This is a great way to build an emergency fund and should be one of your first financial goals.  

The bottom line is that saving £100k is possible, but it takes time, effort, and discipline. If you’re willing to make some changes to your spending and saving habits, £100k is within reach.

Create more income-generating assets

One of the best ways to accelerate your £100,000 savings is by creating income-generating assets. An income-generating asset is something that generates regular income for you.

This way, the excess income can be used to help grow your £100,000 savings.

Here are a few income-generating asset ideas:

-Invest in property: Property can be a great income-generating asset. You can generate income from rent, but you can also get appreciation over time.

-Invest in index funds: Another great way to generate income is by investing in low cost globally diversified index funds. The value of the fund will grow in line with global growth and the income the companies produce.

-invest in yourself: One of the best ways to generate income is by investing in yourself. This could be things like starting a business, becoming an expert in your field or creating an online course.

-Create digital assets: Digital assets, such as a blog, ebook, or courses, can also be a great way to generate income. These assets can be created once and generate income for years to come.

-Create your own business: You can generate income by starting your own business. When you own your own business, you have greater control over your income and expenses.

Here are a few tips to get you started:

-Find something you are good at When you’re starting a business, it’s important to find something you’re good at. This will make it easier to be successful and generate income.

-Find something you like doing: It’s also important to find something you enjoy doing. You’ll be more motivated to stick with it and grow your business.

-Find something a lot of people need: When you’re starting a business, it’s important to find something that a lot of people need. This way, you’ll have a larger market to sell to.

-Find something people will pay you for: It’s also important to find something that people are willing to pay you for. This way, you’ll be able to generate income from your business.

-Start small: When you’re first starting out, it can be useful to start small. This way, you can grow your business at a manageable pace and avoid overextending yourself.

-Be patient: Growing a business takes time, so patience is important. Don’t expect overnight success. Instead, focus on taking small steps and growing your business over time.

-Create a business plan: A business plan is a roadmap for your business. It can be helpful for you to define your goals, build your brand, and attract customers.

-Get started: Once you have a plan, it’s time to start. This means taking the necessary steps to launch your business, such as building a website and marketing your business.

By creating income-generating assets, you can reach £100k much faster than if you were just relying on your savings.

Get and stay out of debt

Debt can be a major obstacle when it comes to saving money. £100k savers recommend getting out of debt as soon as possible so that you can focus on saving instead.

There are a few things you need to do in order to get out of debt:

-Create a budget: A budget is a great way to get a handle on your personal finances and see where you can cut back on spending.

-Create a debt repayment plan: Once you know how much money you have to work with each month, you can create a plan to pay off your debt. This may mean making some sacrifices in other areas of your life, but it’s worth it if it means getting out of debt.

-Consolidate your debt: If you have multiple debts i.e credit card debt with different interest rates, you may want to consider consolidating your debt into one loan with a lower interest rate. This can save you money in the long run and help you get out of debt faster.

FAQ How to save £100k

How long can it take to save 100k?

It can take a number of years to save up 100k. It depends on where you are starting from and how much spare cash you have to save and invest towards your 100k target.

The key behaviours that will make it happen sooner than later are
Paying yourself first
Budgeting and giving every dollar or pound a job to do
Living well within your means
Automating your saving and investing
Keep your costs low
Increasing your income
Creating or investing in assets that provide you with an income and go up in value.

Reaching 100k in savings will involve patience, persistence and passion.

How hard is it to save 100k?

Saving 100k is no easy feat, but it can be done with the right plan and dedication. The first step is to figure out how much you need to save each month. You can do this by setting a goal and then dividing the goal amount by the number of months you have to reach it.

Next, you’ll need to create a budget to ensure that you stick to your savings plan. Make sure to consider your expenses and find ways to cut costs where you can. Try to limit unnecessary purchases, such as eating out or buying things that you don’t need.

You also need to look at maximising your income. Consider taking on a side hustle or looking for a job with more potential for growth. This can help you reach the 100k milestone faster.

Finally, make sure you are investing your money wisely. Look into different investment types to determine which ones fit your goals best. Just make sure the type of investment has a good chance of helping you and is not something that can wipe out your savings in one go.

With the right strategies, it is possible to save 100k. However, it is important to have patience and dedication to stay on track. Good luck!

How can I save 100k in 3 years?

Saving $100,000 in three years is an ambitious goal, but it is achievable with the right strategies.

First of all it’s good to start with a clear goal in mind and when you want to achieve it by including breaking it down into milestones so you can track progress.

If you have any debt, it’s probably a good idea to get rid of that asap.

Automating your finances, by setting up automatic deposits into your savings and investment accounts, can help ensure that you reach your goal.

Keeping your expenses low and taking advantage of employee benefits is important for maximizing your savings. Lastly, investing in what has always worked such as low cost globally diversified index funds, can help you reach your target amount in three years.

What is the best way to save 100k in cash?

The best way to save $100,000 in cash is by following a few key strategies.

First, have a positive mindset and set a specific goal.

Second, set up an investment account (including a pension) using low costs globally diversified index fund/s and start contributing regularly.

Third, surround yourself with the right influences, read the right books, listen to the right podcasts and find people also trying to grow their wealth you can interact with.

Fourth, pay off any debt and build up an emergency fund for when things go wrong.

Fifth, consider other ways to grow your wealth by owning, purchasing or creating income-producing assets.

Summary of how to save 100k

£100k is a significant amount of money to save and an important milestone to reach in building wealth.

Saving £100k is possible, but it takes time, effort, and discipline.

If you’re willing to change your spending and saving habits, grow your income, stay out of debt, and invest your money to create assets, £100k is within reach.

Just get started now and keep going.

If you would like help reaching your first £100k in savings, sign up for our newsletter about managing and growing your money towards financial happiness.

Photo by Sarah Agnew on Unsplash

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