I feel like I’m going to receive a lot of flak for this, but I want to be open with you so I’m sharing it first and foremost.

The number one reason why I was able to save money, more than $20,000 in fact, was because I was living at home. 

I will admit, I am privileged in that I was able to live with my parents. 

I also know that there are many people out there who don’t have or can’t have this opportunity which impacts their ability to save money.

But this was the decision I made based on the situation I was in and what made the most sense for me at that time. 

I am not ashamed to live with my parents. I understand there are cultural differences in how this is viewed, but times are changing. 

To achieve your goals, you have to make do with what you have.

Even if you don’t have the opportunity to live with your parents, you will find that the methods I share will help you nonetheless. 

My Situation and Why I Could Afford to Save Money 

In the wake of 2020, I was a 22-year-old who had only been working at her full-time job for five months when COVID-19 hit and things became serious.

Like serious serious. 

At that time, I was looking for an apartment to move into, but I thought, “What the heck. I’ll stay with my parents until the coronavirus is over. I’ll be able to save money in the meantime.”

And that’s what I did.

Now, I understand some people don’t have this opportunity. In the US, it’s looked down upon to live with your parents, heck some parents even kick their children out at the age of 18. 

But family dynamics vary from culture to culture and I can’t say the same thing for everyone, but my family welcomed me with open arms and I am grateful for that.

In my culture, it’s very normal to live with your family right until you marry. It’s even considered unfilial to leave the house—most Asian households are like this. But times are changing and many Asian Americans tend to want to leave the nest even against their parent’s wishes—and that’s what I was trying to do.

But COVID-19 hit and my plans took some backtracking.

Y’all, living with your parents does not mean you mooch off your folks.

Living At Home

But I want people to understand that if you are serious about saving money, you need to make compromises. 

That means following your parent’s house rules (I couldn’t go out late or hang out with friends at the bar!), contributing to the bill, buying groceries, and taking care of the house chores. 

But I was willing to make compromises if it meant being able to save money. Better to start saving now so I can afford my own apartment later on.

Between living with my parents and working from home (thank god my company made this move!) I was able to cut back on so much spending. 

Here are the exact steps I took to save $20,000+ in 2020.

Setting Financial Goals to Help Me Save Money

First and foremost, I lend my success to the bullet proof savings plan that I had created. 

I had just graduated college and was working my first full-time job where I was making $42,224 per year; I was excited because I finally got to be a big girl. 

Taking into consideration the expenses I was going to have and how much I made per year, I set three financial goals that made the most sense to me. In 2020, I sat these three goals:

1. Contribute at least $19,500 into my 401(k).
2. Put aside $250 per paycheck into my Emergency Fund account.
3. Move $100 per paycheck into my “Moving Out” personal savings account

I counted the number of paycheck days in 2020 and it was 28, (keep this number in mind!) so if you do the math, I would be saving roughly ($19,500 + $6,750 + $2,700) = $28,950 in 2020!

If you want to learn how to set realistic financial goals, read this post here.

Setting Realistic Goals so I Can Achieve My Financial Goals

The next most important thing I want to share is I was comfortable with these numbers. 

I didn’t suddenly up and one day say, “I’m going to put 90% of my money away and only limit myself to $100 per month”, cause that’s bogus!

It’s unrealistic.

If I did this, I’d feel so unhappy because then I’d practically have no money to buy whatever I want.

These savings goals on average took me at least two weeks to put together. In this post here, I go more in-depth about how to set realistic goals.

In order to make this work, you’re going to have to have a real and honest conversation with yourself. 

For example, I chose to put so much into my savings accounts because I prioritize savings over everything, but I also want to have money leftover every month so I can spend it on whatever I want guilt-free. 

So I told myself, “Alright, I’m going to put my money into my savings. Whatever is leftover, I can spend it on whatever I want, keeping in mind to set aside just enough to pay my expense,” and what’s what I did—and it worked.

Every paycheck, after all the money is automatically deposited into the appropriate accounts, I usually get back $400 leftover, or $800 per month.

After that, usually $415 goes into paying off expenses and bills. Then, and only then, whatever money is left over, I get to spend it on whatever I want, guilt-free!

One of the most popular ways to set realistic goals is to set SMART goals. SMART goals need to be specific, measurable, attainable, relevant, and time-based. Here is an article about how to set SMART goals.

My goal didn’t use the SMART method, but if you’re a beginner, I highly recommend you use this method.

Automate, Automate, Automate!

If there is anything you need to take away from this post, it is to automate! 

What does that mean?

It means that you set up your paycheck so that every time you get paid, money automatically gets directly deposited into different banking accounts.

This could be a savings, checking, IRA, or 401(k) account.

Automating is how I was able to save so much money. I set up my direct deposits in a way that money goes into my savings account first. Anything leftover goes to my checking account. 

This is a form of paying yourself first.

Here is a great article that goes more in-depth about why automation is so important.

How to Calculate How Much Money to Save Per Paycheck

Remember my three goals above? In order to achieve them, I set up automatic deposits. Goals #2 and #3 were easy to calculate, but what about goal #1? 

Here’s how I went about calculating how much I need to set aside per paycheck for goal #1, which was to contribute at least $19,500 into my 401(k).

To achieve that goal, I also calculated in how much my company was contributing to my 401(k). 

My company contributes 10.5% of my salary to my 401(k) every year. On a salary of $42,224, that works out to be $4,433.52.

Now Do the Math to Calculate How Much Money to Save

Now, if you do the math:

$19,500 – $4,433.52 = $14,566.48. So that means I need to contribute at least that much into my 401(k). 

Now, remember the magic number, 28? 

Well, if you do the math:

$14,566.48 / 28 = $520.23. So that means that per paycheck, I need to put aside $520.23 into my 401(k) to reach my goal of contributing $19,500 into my 401(k).

Still, why is automating so important?

The action of automating my savings made it so easy for me to save because I knew exactly how much and where the money was going…to me!

It’s just that I was not allowed to touch the money.

Check on Your Goals and Often

As I was saving, the reason why I was able to save so much money was that yes, I was living with my parents.

But another important reason why I was able to save $20,000+ in 2020 was that I set realistic financial goals and I actually stick with it!

I created a simple excel sheet where I was keeping track of my goals.

In the sheet, I explicitly stated my three goals next to the tables. Not only that, I try to make this fun—in my own way.

Make Saving Fun! 

Here’s a tip: make saving fun and engaging!

Every Friday when I get paid and the money gets deposited into my account, I would open up my laptop and track how much money I had saved by filling in the row where the money was deposited. 

As the month goes by, the table gets filled more and more and it was so fun to see this whole process. 

Take a look at the exact table I was filling for goals #2-3!

At first, it was hard because I remembered thinking to myself, “Oh gosh. I’m going to have to do this for the next 28 weeks?” 

But after the first few months and seeing how much progress I’ve made, I thought to myself, “Wow, this is very cool—and fun!”

As the weeks go by and I come back to fill in the boxes, everything just gets easier and easier.

I will be honest, I didn’t come back after every two weeks. There were some weeks where I just felt no motivation and didn’t come check for a month.

But at the end of the day, what mattered was I didn’t give up. Sure, it was hard. But I came back anyway and continued to fill out the table.

Check Your Savings Goals Often

I also want to point out why it’s so important to check on your goals and often.

Just the act of seeing my goals in front of my eyes and being reminded every other week what my goals have ingrained the goals into my mind. 

This is basically the same concept as putting a sticky note on your computer to remind yourself of task or putting a note in front of your mirror to remind yourself of your goals.

And that’s it!

 I hope this post inspired you to save 💰. Want more financial tips? Make sure to sign up for my newsletter and check out my resources page.

What are some strategies that you use to help you save money? Comment down below!