A 20-something who's banked $170,000 shares the simple strategy that helps him save 65% of his income

Two years ago, a 25-year-old financial analyst, who goes by the pen name Sean, hit $100,000 in savings.That's when he started his blog, the Money Wizard, to track theprogress of his goal ofretiring at age 37. Two years later and Sean lives in Minneapolis earning a salary of $80,000. His current net worth sits at $170,500.Sean is able to save 65% of his take-home pay, which he puts into his main savings vehicles' a 401(k), IRA, and index funds ' thanks to one simple strategy he picked up after starting his first job: automation."When I first started saving I tried to do everything manually, and I quickly learned that no matter how dedicated we are to a goal, it's easy to lose focus," he told Business Insider."One day, I started a job with a 401(k). The only way to contribute to the 401(k) was through automatic investments each pay period. When I saw how quickly those automatic contributions added up, and how little time, effort, and stress I used as those investments grew, I was blown away. I started automating as much of my financial life as possible," he said.Now, Sean's 401(k) is set up to contribute enough each pay period to reach the maximum allowed investment of $18,000 a year, a move he calls "the smartest investment I ever made" in part because he saves more than $5,000 a year in taxes."By saving off the top, an amazing thing will happen," Seansaid. "You won't even notice all the missed money, and you won't even have to adjust your lifestyle to meet your savings goals. Your spending will instead mold around what's left, leaving you feeling like you're living just as great of a lifestyle, all while saving a fortune."Sean doesn't fall victim to lifestyle inflation. Whenever he gets a raise, he ups his savings contributions by the same amount."The goal was for my take-home pay to stay the same before and after the raise," he said. "Pocketing raises through automatic contributions was one of the biggest factors allowing me to increase my savings rate from 35% to 65% in just a few short years."For his index funds, which are already a form of automatic investment, he says, Sean uses Vanguard's mutual fund features to set a recurring schedule for contributions."The idea is to reduce as much money-related stress as possible," Sean said. "By automating decisions that I don't want to spend energy on, I'm free to go enjoy other areas of life, stress free."SEE ALSO:A 27-year-old who saves 65% of his income shares his 7 best tips for traveling on a budgetDON'T MISS:How one 26-year-old banked nearly $150,000 in savings as part of a plan to retire by age 37Join the conversation about this storyNOW WATCH: 4 lottery winners who lost it all
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