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$200K by 30 – A Millennial’s Guide to Financial Success

Susan Shain • November 6, 2023

Saving can be difficult, but it's not impossible. You can save more money than you think, and this millennial shows you how.

The majority of millennials have next to nothing in their bank accounts.

You’ve probably heard the stats: Millennials couldn’t cover a $1,000 emergency, and they have an average of $36,000 of debt. And when it comes to retirement — which, to most millennials, seems like a billion years away — 66% haven’t saved a cent.

The blogger behind Fiery Millennials, however, is tipping the scales. Gwen Merz is only 28 years old, and has already saved $200,000 for retirement. Want to know how she did it? Merz revealed her savings story to us — and also offered advice for fellow millennials who want to prepare for their futures. To learn more, keep reading” to make it sound friendlier, inviting users to know more about how they can achieve financial success by 30.

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Stumbling upon financial independence

One day in college, Merz was using the 2000s relic known as StumbleUpon when an article about FIRE (financial independence, retire early) popped up in her browser. Merz, who had grown up poor, immediately became “hooked” on the ideals of frugal living and financial security.

“Here are these people who never have to worry about having enough money ever again,” she says.

“That was very appealing to me, as someone who internalized a lot of those lessons about poverty early in life.”

Though she couldn’t save much money as a college student, Merz says learning about FIRE gave her a “really good foundation” for her adult life. When she totaled her car, for example, she didn’t take out a loan, and instead bought a used vehicle with cash. And when she graduated debt-free, thanks to a full-ride scholarship and her service in the National Guard, Merz was “so ready” to put financial independence (FI)  into practice.

“I was super stoked that I got to put money in my 401(k) and open a Roth IRA,” she says. “So nerdy, but it’s true!”

The road to $200k

After she graduated college in 2013, Merz landed a full-time information technology job at the Fortune 100 company at which she had interned.

Her base salary? A lucrative $65,000, plus bonuses that averaged $7,000 to $8,000 after taxes, and a 10% 401(k) match.

While her peers spent their paychecks on nights out and new clothes, Merz saved 60% to 80% of her income (which increased each year and eventually came close to six figures).

“It was really good that I got started so young because I didn’t have any set habits or lifestyle expectations,” she says.

Merz maxed out her 401(k) — the limit is now $19,000 per year — and her Roth IRA — the limit is now $6,000 per year — and put the rest into a health savings account (HSA) and other taxable accounts.

After six years of saving, her retirement accounts reached a balance of more than $200,000.

Housing, cars, food: The big three to watch out for

Despite her ample salary, Merz admits it wasn’t always easy to save so much.

“At the beginning, it was definitely harder. But that’s only because I was still trying to live a typical American life.”

As an example, she cites the fact that she was living in a three-bedroom house by herself — a decision she now deems “ridiculous.” So she got a roommate, and cut her monthly housing budget from $900 to $450.

She also kept the 2005 Pontiac Vibe she purchased in college. Whereas most of her peers have bought one or more new cars since graduating, her vehicle will soon hit the 200,000-mile mark.

“It’s the big three you have to watch out for: housing, cars, and food,” explains Merz.

“If you can keep those three to a manageable level — or figure out how to get rid of one — you’re going to be so much better off than the average American.”

Or, as she puts it: If “you make one or two different choices in life, that can make all the difference.”

When will this fiery millennial retire?

When Merz began her FIRE journey, her goal was to retire at 35 with $635,000. But in the years since, her outlook has shifted.

“I don’t really have a number or a date in mind anymore. It’s less about early retirement now — and more about how can I optimize my life so I’m at peak happiness,” she says.

Even if she doesn’t retire early, Merz has learned a lot from FIRE, saying: “It’s been interesting to see all the things society says we need that I am actually quite comfortable living without.”

She has also given herself a significant amount of financial freedom in the years to come. By frontloading her retirement savings — and giving her accounts decades to compound — Merz could stop saving for retirement now and still have a healthy nest egg at 65.

“I gave myself the gift of not having to worry and stress out about money in the future,” she says.

Saving tips to hit 200k for millennials

Merz is the first to acknowledge that the FIRE movement is dripping in privilege.

“Some people say everyone can achieve FI — that’s just not true. It’s a lot easier to save half of your income if you’re earning a lot of money.” And, as she points out, it’s even easier if you don’t have student loans or dependents.

Still, Merz believes anyone can learn lessons about budgeting and consumption from the FI movement. Even if someone can’t save at high rates, for example, they can maybe build an emergency fund or open a Roth IRA.

If you want to start saving — regardless of your income — Merz says your first step should be automation.

When Merz received her first paycheck, she set up automatic withdrawals that funneled money into her savings and investment accounts.

“I never saw that money and didn’t miss it because I had never known what it was like to have that much,” she explains.

The good news with this automated saving approach is it can eliminate the need for budgeting. Since Merz covered her necessities and investment goals by paying herself first, she could then give herself “free reign” to spend whatever was left.

“There’s a lot of guilt and decision making that are involved with budgets. But if you artificially lower the amount of money that you have to spend… it’s easier to save.”

If your employer offers a 401(k) program, Merz also urges you to sign up. Not only will your contributions grow over the next several decades, potentially funding your retirement, but they will also lower your taxable income right now. For example:

  • Say you earn $50,000 per year and contribute $5,000 to your 401(k). You can deduct that $5,000 from your income, meaning you’ll only pay taxes on $45,000 of earnings.
  • Many employers match 401(k) contributions up to a certain percentage. A “3% match,” for example, means your employee will  match every dollar you contribute, up to 3% of your paycheck.

“There’s no reason to not save up to the match,” says Merz. “They’re giving you free money — who does that?”

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