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- Gwen Merz was lucky to graduate without debt and with a positive net worth.
- From there, she spent frugally, side hustled, and kept her living costs down to build wealth.
- She saves her money primarily in tax-advantaged accounts, like a 401(k) and health savings account.
- Read more stories from Personal Finance Insider.
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When you're in your 20s, you're probably trying to figure out a lot of things — what kind of work you should pursue, what your purpose in life is, and where you want to live. If you're lucky, you land your first "real job," move out of your parents' place, and start paying rent. Saving money? What's that?
So it's rare when someone is able to start seriously building their net worth before age 30. But that's what Gwen Merz was able to do after graduating college. By 30, her net worth was $300,000.
When Merz was a college senior, she decided to pursue FIRE (financial independence/retire early), after stumbling across a post from blogger Mr. Money Mustache. Mr. Money Mustache and his then-wife retired at the age of 30 with a net worth of $600,000. He pulled this off by living on a small percentage of his income as a software engineer, and diligently and consistently putting the rest in investments.
Merz was particularly inspired by the chart in Mr. Money Mustache's Shockingly Simple Math Behind Early Retirement post. "Seeing how many years left changed by the percentage of income saved was huge," says Merz. "I mostly hovered around a 65% savings rate, which helped me calculate my time left [to reach FIRE] in 10 years, at the age of 35."
When Merz landed a full-time job after college, she immediately started putting those lessons to good use. "It turns out the shift from college to working wasn't the greatest and I was willing to do pretty much anything that would allow me to return to the freewheeling lifestyle I had in college," says Merz.
Here's what Merz did to have a net worth of $300,000 by 30.
1. She made the most of her fortunate financial situation
Merz was fortunate to earn a full-ride scholarship to a local state school, and avoided student loans entirely. Further, she didn't have any family to support, nor any dependents who relied on her financially.
In fact, she was able to graduate with a positive net worth from scholarships and money she earned serving in the Air National Guard. For instance, Merz used money from her sign-on bonus to buy her car outright. Upon graduating, Merz also had a paid college internship that turned into a full-time offer in IT that paid extremely well. Managing her money well and not overspending ensured that she kept plenty of that cash in the bank.
2. She kept her living expenses low
On top of coming from a place of privilege, Merz deliberately kept her expenses very low. She earned anywhere from $65,000 to $85,000 a year, and managed to save roughly $2,500 a month.
For instance, she'd challenge herself to spend $200 a month on groceries. In a given month, she'd spend $100 for fresh local meat from a CSA (community-supported agriculture) and $100 on produce and other food items. "Every dollar that came in was able to be either put away for the future or spent on necessities," says Merz, who is 30, lives in St. Louis, Missouri, and is an IT professional.
Merz also drove an older car for nearly a decade until the wheels fell off. As for socializing, she spent as much time as possible socializing with friends at home, which saved money on eating out.
3. She lived in areas of the country with a low cost of living
Along with earning a higher salary working in tech, Merz typically lived in parts of the country that had a lower cost of living. Though she lived for some time in Washington, DC (not the cheapest), she also lived in small Midwestern cities, including Des Moines, Iowa, and Minneapolis, before ending up in St. Louis. Merz also saved by living with roommates a handful of times, and her rent was as low as $400 a month.
4. She saved her money in tax-advantaged accounts
Most of the $2,500 Merz saved each month went into tax-advantaged accounts, such as her 401(k), Roth IRA, and health savings account. In fact, she had very little in after-tax investments and cash savings. To take advantage of the tax perks of these accounts, Merz saved the maximum contributions allowed.
5. She side hustled
Merz tried side hustles such as blogging and podcasting. While the side hustles didn't rake in much cash, they did help her expand her network and make friends with folks around the country. In turn, she was able to save money by staying at friends' homes when she traveled instead of doling out cash for pricey hotels and restaurant meals.
As an example, when a podcast listener heard she was moving to Washington, DC, the listener offered the use of their basem*nt rent-free until Merz was able to afford and find a place of her own.
She now knows her limits
Looking back, Merz realized that what she did to save aggressively was extreme. While she's no longer pursuing FIRE by 35, she has a goal of reaching financial independence at 55.
"I did take saving money too far sometimes and missed out on some fun activities with friends just because it cost money," says Merz. "Now that I have all of the money saved up so far, I have relaxed my militant rules and allow myself to do more things, like drive a car that's only six years old instead of 16!"
That being said, Merz suggests that those who want to save more money start by being aware of their money situation. "Even being aware of the state of your finances is a huge victory and will only lead to better situations down the road," she says. "We all have to start from somewhere, and I hope that people are inspired by my story, because I read stories like mine a decade ago and was hugely inspired."
While Merz's story of how she ambitiously saved so much before she hit the big 3-0 might move you to do the same, she wants to tell others not to get discouraged by stories online. "We all move at our own pace and have our own unique set of circ*mstances," says Merz. "I was able to save a lot of money because I started out in a very privileged position."
Jackie Lam is a personal finance writer and is based in Los Angeles. She is an accredited AFC® financial counselor. Jackie is passionate about helping artists, freelancers, and gig economy workers with their finances. She has in-depth experience writing about budgeting, investing, frugality, money, and relationships, and loves finding interesting stories that revolve around money. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award and the 2022 Plutus Awards recipient for Best Freelancer in Personal Finance Media. In her spare time she enjoys volunteering, water aerobics, sticker collecting, being in nature, and learning the drums. You can connect with her onInstagramorTwitter.
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