Few things impact your life like learning how to save more money. Let Chelsea and Lauren steer you in the right direction when it comes to getting better at saving money. Looking for even more money saving tips? Check out this video:
Hi i’m chelsea hi i’m lauren and we are the financial diet and today we are talking about one of the most important yet most sucky elements of personal finance which is yes savings part of the reason i started the financial diet last year was because i basically had nothing and savings despite having a pretty good salary job and almost no student loans and when i
Came on to join eft full-time i was able to do so easily because i had so much money in savings so we come from pretty opposite backgrounds when it comes to savings but one thing we’ve definitely learned is that few things impact your life like how and how much you’re able to save as you mentioned in our last video having savings is the first of the five key steps to
Have the financial freedom to follow your dreams but how do you save and how do you get that financial safety net that comes from having a bunch of money put away and from having the money that’s kind of working by itself to earn you more and for us we think that the biggest and most important step is to not see the money that you’re going to be saving so whatever
You’re saving should be transferred from an account into a separate accounts that you can’t see it every day if you see it you can spend it and trust me because i spent most of what should have been my savings on forever21 jewelry that stains your skin green so to save i create an excel sheet where i can track my monthly bills and my spending behavior and this
Allows me to create a plan and a budget for myself and allows me to really see the numbers and i can’t even open excel so i use an app called mint that helps you look at your money as you spend it it makes it into a nice little pie chart so you can see that you’re wasting all of your money on alcohol so once you have two or three months of spending habits down you
Can kind of look at it and see where should i cut and work backwards from there it’s a lot easier than just picking a random percentage and saying okay this is what i’m going to save because i definitely made that mistake i thought to myself i guess 20 percent is how much money someone say is out of their paycheck and then within the first week i was going into my
Savings account to buy a romper but once i actually said okay this is what i spent and work backwards slowly from there it actually stuck so be honest with yourself about where your money’s going each month and make sure that you’re focusing on building yourself a safety net even if you have something like a very high student loan payment make sure that a safety net
Is a priority because everyone needs an emergency fund you never know when you’re going to get fired or break a leg or both in the same day so we recommend having about six to nine months of after-tax income ready so that no matter what happens you’re not you know on the street and even if your income is different every month like mine is there’s definitely still
A way to make a budget i find that you just kind of turn it into good months and bad months where some months you add more things to your budget and when you’re earning a little less you know what you can cut i broke down how i budget my month-to-month income in an article and the link is in the description even if you have greater goals for money what you should
There are ways to make your money work more efficiently than just sitting in a regular savings account you do need the regular savings account because that’s where you keep everything that needs to be maybe one day taken out right away in cash your regular savings account is for things like the emergency fund or any money that you might need on a moment’s notice
But if you want to have your money doing fun cool rich person things often account somewhere earning their own money there are many other kinds of accounts that can be really good for that so you have things like cds or time deposits which give you a better interest rate in exchange for holding your money for a period of time it’s usually anywhere from a month to
Five years but in that time it is not accessible you can’t touch it but then you have things like retirement accounts which i know sounds like they don’t matter right now but they definitely do things like 401ks or iras which give you tax benefits and allow you to invest pre-tax income and some accounts like 401ks even provide a match from your employer which means
That for every dollar you put in they’ll put in a certain amount too and it’s free we no longer have employers though so you have to take advantage of this free money because we can’t anymore so at the end of the day you’re going to have to find out how much of your monthly income can be portion out to savings based on how much you earn and what your savings goals
Are don’t forget the most important thing is the emergency fund once you get that emergency fund in place then you can start focusing on other things and if you had big dreams like lauren and i putting our jobs to run tfd you’re going to have to focus on savings more than you probably want to savings can suck but it doesn’t have to keep your eye on the prize and
Don’t get down on yourself if you slip up no one’s perfect and don’t forget to go to the financial dicom and to hit subscribe below for more hi guys yeah
Transcribed from video
How To Save Money | The Financial Diet By The Financial Diet
