How this 27-year-old saves 85% of her income

At 22, I became the youngest full-time female trader on Wall Street and the second African-American female trader in the New York Stock Exchange’s 229-year history.

Now, as a 27-year-old entrepreneur and host of the “Going Public” streaming series, I’m using what I’ve learned to help young people have intimate conversations about how to make smart financial decisions.

One thing I’ve noticed is that in general most people have bad spending habits and find it hard to save money. It may sound intense, but I am saving 85% of my annual income. It was just something I was taught as a kid; if my monthly allowance was $50, I would only spend $7 to $8 that month.

While I realize everyone’s situation may be different, here are the frugal habits that have helped me build wealth and save money:

1. Limit Lifestyle Inflation

In my first job on Wall Street in 2017, I was making $12,000 a year. Now, my annual income has increased by more than 5000%, mainly thanks to my streaming show and my conferences.

So even though I went from $12,000 to $650,000, I’m very clear about my wants versus my needs and I’m still sticking to the 85% savings plan.

2. Pay the rent in advance

I pay my rent for the whole year in advance. That way, if I run into an unforeseen situation that affects my finances, I know I’m covered and don’t have to worry about my housing expenses.

If you can’t pay a full year up front, try paying for six months and then start saving for the next six months. If you set aside a set amount and stick to your budget, you’ll be less likely to spend on things you don’t need.

3. Choose an electric vehicle over a gas-powered car

When I moved from New York (where public transit is the norm) to California in 2021, I knew I would have to buy a car. For environmental reasons, I opted for an electric vehicle instead of a petrol car. It ended up making all the difference to my budget.

While the average tank of gas in California is $4.68, I spend less than $30 a month to charge my car. There are so many new electric cars hitting the market, and I recommend looking for one that fits your budget.

3. Don’t spend money on junk food

I am very attentive to what I put in my body and what I feel. Opting for healthier food options can sometimes cost more, but what I eat has helped me stay focused and energized.

That said, I keep a strict grocery budget of $250 per month. To keep costs down, I don’t buy sugary snacks or other expensive, unhealthy items. So, rather than paying extra for junk food, I keep fresh fruit around me all day to snack on.

4. Share streaming subscriptions with my family

I pay for our Hulu family subscription. Meanwhile, one member of my family covers Netflix and another covers Prime Video.

It lets us all watch our favorite shows without having to plug in a cable box, and it’s such an easy way to access multiple streaming services while saving hundreds of dollars a year.

5. Cancel my gym membership and train at home

Gym memberships can be great, but also very expensive. In New York, it can cost you up to $3,260 a year.

For me, bodyweight exercise that I can do anywhere is my best friend. I’ve also invested in weights and other gym equipment, which allows me to workout at home alongside my favorite YouTube workout videos.

I also enjoy hiking and other free outdoor activities that get me moving. I love bikes, and although I don’t own one, there are plenty of rental services that offer the first hour for free.

6. Know my risk tolerance

Understanding your risk tolerance can help you determine how you save and invest. I am conservative in my investment choices, but I balance them with practical risks.

For example, one of my savings accounts is worth $10,000 and only grew to $10,053 in two years. It’s not ideal, but at least I know I won’t lose this investment. Meanwhile, my investment in a high-risk stock went from $327 to $5,900 in less than 12 months last year.

7. Plan an off-season vacation

As we are still living in a pandemic, I often work from home. But even with increased flexibility, I still have to keep my sanity in check. So I travel.

Going on vacation out of season saves me a lot of money. One of my favorite places to travel in the United States is Florida. I pay 45% to 65% less on airfare and beachfront rentals in the spring and fall than I would in the summer. And the weather is just as amazing!

Lauren Simmons is an entrepreneur, host of the Go public streaming show, and a former stock trader for Rosenblatt Securities. At 22, she became the youngest and only full-time female trader on the New York Stock Exchange. Follow Lawrence on Instagram @lasimmonsand IPO @goingpublic.

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