This past year I have saved over $10,000 and increased my net worth by $25,000 without even trying hard. Here are the 10 steps I took to do it!




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Chapters

00:00 Start Here
01:04 Create A Goal That Inspires You
02:17 Keep Fixed Expenses Low
03:25 Keep Track of Variable Expense on a Credit Card
04:55 Set A Specific Amount of Money to Consistently Save
05:53 See All Extra Money As Excess
06:44 Always Keeping My Checking At $100
07:27 Highly Overestimating My Taxes
08:51 Being Smart With Taxes
09:45 Investing
10:34 Having Margin


This past year I haven't made a huge amount of money; however, I have still been able to save over $10,000 and increase my net worth by over $25,000. In this video, I share 10 steps I took to reach these amounts.

1. Create A Goal That Inspires You

Saving becomes a lot easier when you create a goal that inspires you rather than trying to reach a certain amount. When you understand exactly what saving represents and how it will improve your life, it becomes a lot easier to do.

2. Keep Fixed Expenses Low

When creating a budget, the bulk of your budget consists of something called, "Fixed Expenses," which are expenses that are the same amount each month like rent, utilities, and insurance. I was able to save a lot of money despite not making a ton because I kept my fixed expenses very low, which opened up a lot of money to save.

3. Keep Track of Variable Expense on a Credit Card

The other part of your budget consists of something called, "Variable Expenses," which are expenses that are different amounts each month like groceries, gas, and entertainment. If you are not keeping track of your variable expenses, they can easily get out of control. One way I stay on top of these expenses is by putting them all on my credit card so I can see it as one balance (and of course pay off the balance each month). This makes the unpredictable expense more predictable.

4. Set A Specific Amount of Money to Consistently Save

The key that allowed me to save a lot of money this past year was by creating a budget that I could predict month after month. Having this predictable budget allowed me to determine a specific amount of money to set aside every month to save, which was one piece of my strategy.

5. See All Extra Money As Excess

Another piece of my strategy was having a predictable budget that I lived my life by and everything I made beyond that I saw as excess that I saved. Viewing extra money as excess allowed me to save the maximum amount possible.

6. Always Keeping My Checking At $100

The way I maximized my savings rate was after I payed all of my bills, I moved everything over to my savings account and only kept my checking account balance at $100. This allowed me to not overspend.

7. Highly Overestimating My Taxes

A huge thing that allowed me to save $10,000 this past year was by highly overestimating my taxes, Since I am self employed, I have to take my taxes out myself and so I was in the habit of always taking out 30%, so I overestimated my taxes by $2,000.

8. Being Smart With Taxes

Another thing that allowed me to easily save money was by being smart with my taxes and maximizing write offs and other things that could lower my tax bill.

9. Investing

Although I saved $10,000 this past year, I ended up increasing my net worth by about $25,000. This was because a huge chuck of my existing money was invested in the market and the market has gone up a lot this past year. Once you finish your emergency fund, investing is a great way to grow your money.

10. Having Margin

The #1 reason that I was able to save so much money this year is because I have a good deal of margin, which is a buffer between you and being broke. When you have money, it is a lot easier to save money.

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