Tori Dunlap
- Financial advisor and influencer Tori Dunlap saved $100,000 before she turned 26.
- Dunlap chronicled her saving journey on her blog which she later turned into a full-time business.
- Her best advice for saving money in your early 20s is have a clear motive and automate your savings.
This as-told-to essay is based on a conversation with Tori Dunlap, Seattle-based money expert and founder of Her First $100k. Business Insider has verified her savings. It has been edited for length and clarity.
I saved and invested $100,000 at 25 years old in 2019, and it was the origin story of my business, "Her First $100k." Money gave me the freedom to leave a toxic job, travel to Europe, and launch my career as a financial advisor.
When I set out to save $100,000, I was 22, living in Seattle in 2016 and making $55,000 at my first corporate job. I read a blog post about a woman who built her net worth to $100,000 by 25. It inspired me to set my own goal to save and invest $100,000 before I turned 26.
I'm a cisgender, straight white woman. Saving $100,000 was a combination of privilege and hard work. It took around three years.
Graduating from college debt-free was a major factor in being able to save and invest this amount so young. My parents had been saving for my college fund since I was a kid, and I worked three jobs while in school to pay for college.
I wouldn't have been able to save $100,000 at 25 if I had been paying off student debt, and I'm lucky to have gotten a great financial education from my parents. They taught me how to be a smart saver, use a credit card responsibly, and use money as a tool to build a life I love.
1. Give yourself a why
When setting financial goals, ask yourself, "What do I want my life to look like, and how can money be a tool to help you get there?" If your goal is to be debt-free, envision what it would feel like to no longer have to make any loan payments. If you want to save $2,000, do you want to travel to a new place or have more cushion in your emergency fund?
Saving $100,000 meant I would have more options early in my career to be flexible and take risks. Once I reached that goal, I saw it as the permission slip I needed to quit my job and be an entrepreneur, a dream I've had since I was a kid. I felt confident I could launch a successful financial education platform and take my financial education business, "Her First $100k," full-time. This was the freedom I'd been saving for.
2. Automate your savings so you're not tempted to spend it
Whenever possible, automate your savings. I had automated transfers into my high-yield savings for my emergency fund and my Roth IRA — a tax-advantaged retirement savings account where the bank invests your contributions, and the earnings can be withdrawn tax-free after the age of 59 ½ — for investing. When it comes to investing, compound interest works for you at any age. I opened my Roth IRA at 22, and sometimes, it took almost the entire year to contribute the maximum amount I could. I wouldn't have hit my $100,000 goal as quickly if I hadn't routinely invested in these accounts.
At the height of my $100,000 journey, I was putting 27% of my take-home pay into savings and investment accounts. Saving just under a third of my income allowed me to progress in my financial goals without depriving myself of a lifestyle I enjoyed. You can try increasing your saving contribution by 1 to 2%, see how it feels, and adjust as needed.
3. Always look for ways to make more income
Ultimately, there's only so much you can cut from your expenses to save money, especially after paying your rent or mortgage, insurance, groceries, and other necessary expenses.
I made more money as I progressed in my career because I negotiated my salary whenever I changed jobs. If I knew I wasn't being compensated fairly based on market research, I advocated for a raise or started looking for a job that would pay more.
In addition to the money I was making from 9-to-5 in marketing. I was also making income from my blog "Her First $100k" and the freelance clients I took on, which started as a side hustle.
I could save and invest more because I was making more across my sources of revenue. If you can't work a second job, you can also increase your earning potential through interest earned by investing or using a high-yield savings account.
4. When you spend, do so mindfully
To prioritize financial wellness, you don't have to stop spending money. You just have to stop spending money on things you don't care about. I was able to find a balance where I could still travel to Costa Rica, eat out, and save toward my goals.
I spent mindfully on things I loved and saved the rest. I also didn't allow lifestyle inflation to happen. Even after getting a raise and climbing in salary, I lived in the same one-bedroom apartment for four years.
Figure out what matters to you, and find a balance between your financial goals and present life.