Reduce Debt Increase Wealth
Reduce Debt Increase Wealth
How to Save Money
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Many struggle to save money, it not hard, Mister Chuck discuss how to get saving into your budget.
1. Reason not to save
2. Set Goals
3. Reach Goals
Articles Links:
https://www.thebalance.com/how-to-set-and-reach-savings-goals-2386115 By
https://www.thebalance.com/overcome-excuses-and-save-money-4129534 By MATT REINER
https://www.thebalance.com/best-reasons-to-keep-your-savings-account-4307372 By JUSTIN PRITCHARD
Please support the show by subscribing, can cancel at any time. Thanks for the support.
- Subscription page: https://www.buzzsprout.com/961804/support
- Contact: ReduceDebtIncreaseWealth@Gmail.com
- Wanting Budget Spreadsheet Place Spreadsheet as Subject
- https://Happygiraffe.org/live
- https://www.shopfinancial.com/lantianbaiyu/
All other inquires place topic into Subject.
Welcome together, we're gonna explore our personal finances and figure out how to improve them. Whether you're just getting started in life on your finances, or you may already have a home and a car payment and you're struggling to get credit cards under control, are you getting a later start in life on saving for retirement, reduce debt increase wealth.com is a podcast to educate those to improve personal finances, whether it's eliminating debt, or making smart investments.
Unknown Speaker :Hello, Mr. Chuck here this episode is how to save money. I've been doing some research and I found that some of you out there one in four Americans have no emergency savings and you are not going to be able to get by without a cash cushion
Unknown Speaker :which is really surprising.
Unknown Speaker :One in four Americans have no emergency savings, and you don't have a savings account. And here's some of the most common excuses people use. I don't know where to save, I don't know how to save, I can't save, I don't have enough money to save.
Unknown Speaker :prices have gone up. And now I can't save
Unknown Speaker :if you're using one of those excuses Shame on you, it's just an excuse.
Unknown Speaker :I always found it to be gratifying when I paid myself first as what I referred to it, even if I could only put $5 a pay or $10 a pay into a savings account, and that's where you say to get started. a savings account is what you find at your bank. So if you have a checking account and you don't have a
Unknown Speaker :savings account, you need to go to your bank set up a savings account. I believe nowadays it may be lower, but when I set up my savings account some years ago, you had to have at least $50 to get it started.
Unknown Speaker :They may work with you if you've been if you've had your checking account with them for a long time. They may late let you get started for less money than $50. But if you can't scrap OSI scrip up and put aside $50 to get a saved account started, you're really in bad shape. Remember, my way to reduce debt is to pay the minimum balance on your credit cards. If you start paying the minimum balance on your credit cards, instead of an extra 50 or 100, a 10 or 20 or whatever the extra you've been paying, that should free up some money for you to get a savings account.
Unknown Speaker :Set up and get one started if you don't have one, or at least to get your emergency fund started, so it's all interrelated. Personal Finance is all interrelated. If you don't do one part of it,
Unknown Speaker :the rest of it's not gonna work, it's gonna fall apart and you're gonna be in trouble. One of the biggest keys to financial success is three accounts,
Unknown Speaker :a checking account that you use to pay all your bills, and you want to keep track of the bills you're paying. So that's why you have a checking account because it keeps track of that for you. savings account, money where you set aside to have an emergency fund so you can stop using credit, especially credit cards, and then a retirement account, which a lot of people have retirement accounts through work, so there's no really big deal.
Unknown Speaker :If you're self employed, you can have a 401k and dividual retirement account, an IRA, a simple IRA, there's a lots of options out there, depending on how much he can put aside and put into that account. There is there's a lot of options and a lot of benefits. And one of the ways you could free up money to save is by paying down your credit card debt
Unknown Speaker :or your student loans.
Unknown Speaker :Which is a way to free it up but I recommend when you're just getting started, pay the minimum balance on all your credit cards, pay the minimum amount all your loans and quit paying that extra until you have an emergency fund with adequate amount of money in there. And that would be left up to you how much adequate amount of money would be
Unknown Speaker :I know a savings account doesn't pay a lot of interest. But if he only got a few hundred bucks, though,
Unknown Speaker :don't really matter, or even a few thousand dollars, because remember, my plan, if you're trying to get out of debt, we're gonna use the savings account as your emergency fund, you're gonna build it up slowly over time, you're gonna leave that money in a savings account where it's accessible.
Unknown Speaker :It's liquid, meaning you can get to it and transfer it to your checking account, and you have it the same day. You don't have to wait for it. And you can make that emergency payment whatever that would be. or pay down some credit card debt where however, whatever you're doing, the importance of a savings account is easy to overlook. The checking account is to work horse of your finances. Your direct deposit, your bank cards and your auto pay bill accounts are likely connected to your checking account. So you feel like your savings account are better placed in investments.
Unknown Speaker :They can grow over time with yes and no.
Unknown Speaker :Your short term goals should be kept in a savings account. So it's easy assessable your long term goals could be placed into investments where they have time to grow. If you use your say savings account, it's a way you can put extra money in there. Say you put your extra five or $10 in there a pay, but you want the whole money aside because you know you have a bill coming up next month, you can put that extra two or $300 you're saving up for next month's payment and the savings account. That way you won't accidentally spend it. So it also you can use as a way to curb your temptation to spend. Because if you know you got money in your checking account, you're more prone to spend it to indulge in something you
Unknown Speaker :really don't need at that particular time. If you're then listening to other people about budgets and the 30 day rule, if anything's over $25, you wait 30 days before you buy it to make sure you still want it or need it, whatever, it doesn't matter what you're doing. You need to have a plan in place you need to follow the plan, and that the biggest part of the plan is a savings account and get the money in there. Now remember, it's federal law rules can only withdraw money from a saves account six times per month. On the seventh time, the bank is going to charge you a penalty. You don't want to be paying out penalties if you can avoid it. So plan ahead. If you think you need to use money or have money, the owl your savings account, take out extra and get it in your checking account so you don't
Unknown Speaker :Don't have to make a few come up short, you don't have to make another withdraw. So it's control. Try to control it.
Unknown Speaker :Savings Account keeps your money safe is FDIC insured for most banks up to 250,000. You can say for goals with I would say short term goals midterm goals is good for a savings account. Once you get a emergency fund set up, say over $3,000. And you don't think you're going to be needing it, but you still want it handy. Look for a high yield savings account, usually an online bank, and they'll pay you more interest in your local bank. But you still keep that savings account at your local bank that doesn't pay a whole lot of interest. Because you need to have a handy you need access to something quick. That's where you can go. I've had three articles and they're in my show notes that I've referenced.
Unknown Speaker :I've already been through
Unknown Speaker :to them. And now how to set and reach your savings goals is to third one. It's from the balance calm.
Unknown Speaker :And what we're going to talk about here is saving for the long term.
Unknown Speaker :When you just put money into a bank on a regular basis, it's kind of easy to draw it for whatever reason. And you have temptation to spend it when you really shouldn't be. So if you have earmark money for savings, and it's a long term goal, such as retirement,
Unknown Speaker :you should be putting that into an account that's going to yield a higher rate of return and prevent you from taking it out. And where they prevent you from taking it out is putting a penalty on it. So if you have an IRA, for example,
Unknown Speaker :you can put up to 6000 a year in there
Unknown Speaker :and you
Unknown Speaker :Cannot withdraw until you're 59 and a half years old, that you have to start drawing it by the time you're 79 or 70 and a half years old.
Unknown Speaker :It's a way to get started on your long term goals best ready for retirement would be to set up a IRA. And you can set up your monthly goals. How much can you afford? What you know, maybe you need to save up money for a down payment for a new car. Maybe you need to set aside money for a down payment to buy your first home. Whatever it is, savings account is going to be the answer. Put the money inside Forget You got it, let it grow. Try to add to it. Have your budget set up.
Unknown Speaker :Take Take stuff out of your budget that you are not no longer using. Quit paying for stuff you no longer use and then control your spending.
Unknown Speaker :And the money you say by doing all those activities.
Unknown Speaker :You need to put into your savings account,
Unknown Speaker :whether it's specific savings goal, or for long term savings,
Unknown Speaker :I would do an IRA. I say IRA, for those of you who don't have a retirement account through your work, if you have a 401k, the most common type, then you do not need to set up an IRA. And you'd be penalize if you over contribute money if you have a 401k and Ira, so you need to be aware of that as your tax advisor about it. If you have a 401k through work. If you could do an IRA or a Roth IRA, there's different types. So do your homework and be careful before you do it.
Unknown Speaker :If you have multiple goals that you're trying to save for, such as your children's college education,
Unknown Speaker :You might want to set up multiple savings accounts for each one of your goals. If you have a goal for a bigger down payment on a home, you can have a savings account for that you have a savings a separate account for your children's college education, you have another one for your emergency fund. That way, keep them separate, you can see how you're doing among all your goals, that would be a benefit of having multiple savings accounts. Also, your longer term goals such as your college education for your children, you could set up on a virtual savings account through an online bank that kind of pay a higher rate of interest. Keep your emergency fund at your local bank. Set your long term goals up if you want to do it through a savings account through an online bank. Let us know
Unknown Speaker :referred to as a high yield savings.
Unknown Speaker :And that's high yield savings is really a contradiction of terms. It's a higher yield than what your local bank is paying.
Unknown Speaker :Whether or not it's high is subject to interpretation, that one and a third percent as more than a quarter of 1%. That's the point. Try to maximize what you're getting as you want to get as highest interest rate as possible for your longer term goals. And you don't want to tie it up in the stock market or
Unknown Speaker :take that risk, then a savings account is a good place to get started. Once you get more money in there, maybe you can get a certificate of deposit or some other instrument that could pay you a higher yield. If you still have a
Unknown Speaker :Long term to go before you need the money.
Unknown Speaker :Also, you want to automate as much as possible that transfer the money from your checking account to your savings account. Now, I think a lot of people nowadays have direct deposit, the money from your employer is directly deposited into a checking account.
Unknown Speaker :So what you do is on payday is set up a automation, where you transfer money to your savings account, the same day you received that deposit. If it's not in your checking account, you're less likely to spend it.
Unknown Speaker :If the sooner it gets out of there, the better off you're gonna be. Over time, you'll get used to it. You may even forget the hang of these other savings account then when you go look at them. You know, maybe three months later, you're the old man
Unknown Speaker :I've had $200 in there now I got 1500 dollars, I'm doing really good on my savings, it'd be one of those feel good things. And as they always say, if you don't see the money, you won't miss the money.
Unknown Speaker :Also, if you get a pay raise at work, take the increase that you get and throw it in a savings account and try to live at the same level as us living before you got the pay raise and neck can help speed up your savings or increase your emergency fund. There's those little tricks and tips that you can find he could probably look up on the internet keys to increase my savings. And you'll find the same type of articles that I found.
Unknown Speaker :That's all I really have on savings account other you know, you gotta just it's a mind over matter. You just go
Unknown Speaker :Gotta make up your mind and do it, then you got to feel the pain, push through it, don't keep taking the money out of the savings account, leave it in there, try to get by on what you still have left in your checking account. And over time, you'll get used to it. If you have your budget set up, and you start locating, identify and those items in your budget you no longer use or no longer need, you can start canceling it and free up some more money. So then the pain gets a little less and less, get a pay raise at work, maybe get a bonus at work a little bit less and less pain gets better over time and you get used to it.
Unknown Speaker :I've been making progress and getting my debt paid off. And I'm down to my home mortgage, my first mortgage and it's going to be paid off within the next six months, probably around the first of the year. 2020
Unknown Speaker :One. So I'm doing pretty good. Oh, I was thinking, my savings account. You know, I built it up. I've transferred money to a high yield account. I've done all the things I talked about.
Unknown Speaker :And I was wondering, why do I need to keep a emergency fund, I don't really need a big mergency fund because I trim my budget down. I got everything under control. I could just put that extra money and two investments and let it grow. And then today, I got a bill
Unknown Speaker :from my doctor.
Unknown Speaker :I go online and I look up like why do I Oh, I thought this procedure was a
Unknown Speaker :preventative measure procedure, which the deductibles don't apply. So the insurance company pretty much pays at all.
Unknown Speaker :But they weren't they were applying my deductible.
Unknown Speaker :I have a high deductible family plan was that $10,000 yearly deductible? Because that's the only thing my employer offers. I cannot cost me almost $200 a week, Tom pan out
Unknown Speaker :is just say $100 a month for a plan was a $10,000 deductible. So I go in to have a procedure done that I thought was preventive measure. And well, it's the second time I've had it done five years ago it was done. So they've reschedule it and come back because you know, they're looking for cancer.
Unknown Speaker :And I get the bill. The total bill was like, $3,000 I'm rounding things off.
Unknown Speaker :And with my deductible, apply, I owe 1700 dollars or more than half I was like, why is that?
Unknown Speaker :So I today I called
Unknown Speaker :the insurance company. And yes, they said, yeah, it's it's all covered. It is preventive maintenance and it's covered. But your provider, the doctor's office,
Unknown Speaker :didn't code it right. So for some reason, and you had ductable is apply.
Unknown Speaker :So you need to call your provider and have them read submit their bill.
Unknown Speaker :Okay, well, that all make sense. So now I called the providers
Unknown Speaker :and they go through it in a Yep. Because we this is a common problem.
Unknown Speaker :There's two things. It's either referred then this is a colon ossipee.
Unknown Speaker :It's either referred to as a screening, which is subject as preventative maintenance or its diagnostic.
Unknown Speaker :Which is not preventive maintenance?
Unknown Speaker :What's the difference? Well, screening is like when you turn 50 the first time you go in and you have it done. That's a screening. If they don't find anything, and you come back in 10 years, that's a screening.
Unknown Speaker :If they find something and remove it, because remember the goal is to prevent cancer. They remove it, and you come back and five years.
Unknown Speaker :That's not coming back for a screening. That's coming back for diagnosis, a diagnostic
Unknown Speaker :and that's that is not preventative maintenance, for your health insurance, and it's subject to your deductible.
Unknown Speaker :1700 dollars, boy, I'm sure glad I have an emergency fund. I can pay that if I want but ban
Unknown Speaker :Somebody wants to maximize their savings as much as possible. I called the provider while I was talking to them
Unknown Speaker :1700 dollars, I prefer not to give that up all at once. And they offered you can do a payment plan if you want, but you got 120 days before he even gets close to it. So pay what you want. And then before you get you get your final notice call us set up a payment plan.
Unknown Speaker :And we'll do a payment plan with Yeah, we don't expect you to pay that all at once. So I can say my emergency fund stretches out over six months or a year or even longer and pay it down. And if it was interest rate for paying something, I could make a little bit of money on that money. I'm not running to the doctor. But that's not the case today. I just would like to know there is a need no matter how far ahead
Unknown Speaker :And that you get don't think you don't need a emergency fine because you never know what's gonna happen. And I did an episode on insurance insurance is not my thing. I don't care for insurance companies but you need it it's either required in some instance or you need it and other such as health insurance need. It's expensive and as you'll find out as I find out it doesn't cover what you think it should cover always gonna cost you more and more money and health insurance is skyrocketing and is not under control. Whatever they said back when whoever his name was president that year, gonna keep your health medical costs down. Well, that's basically not true.
Unknown Speaker :That's the end of another episode. I hope you found it useful. And if you'd like to share this episode with your friends, please
Unknown Speaker :Do so i'm open for any suggestions for improvement or for information that you would like to talk about in future episodes. You can go to my Facebook page and leave me a message more than glad to comply. To find my Facebook page go to reduce debt, increase wealth com and click on the Facebook icon to go to my Facebook website.