Wouldn't you like to save a lot of money quickly and with very simple rules that you can learn
in a few minutes ? Imagine learning just one rule and saving $200 a month, that would be
a really great ROI right? Today you will learn 5 simple rules that will help you save more
money every month. Some of these rules are rules that the rich use to manage their money
better and one rule comes directly from one of the richest people in the world... namely
Warren Buffet himself, so make sure you really pay attention and stay tuned until the end.
But before we dive into the topic : Hello and welcome back to our channel ! And if you
are new here : We are the finance nerds and on this channel we are helping hardworking
people like you to get more out of your hard earned money by showing you how to use your
money in the most effective way. Remember to give this video a thumbs up at the end,
if you got value out of it and now let's dive into the 5 rules.
70% Budget Rule The first rule is the 70% budget rule. This
rule is so simple but just as effective! Ultimately, it is a financial principle that you can apply
throughout your life no matter what financial situation you are in.... this principle works
forever. With this rule you always know 100% how much you can spend, how much you can save
and how much you can invest. It is very simple, you divide your monthly income into 3 categories.
The first category is your monthly expenses, the second is your savings or debt payments
and the third category is for your investments or even for your retirement. You divide each
category into percentages that you put into these categories from your monthly income.
The first category for your monthly expenses has 70%, the category for your savings and
debt payments 20% and for your investments 10%.
Let's make an example. Let's say you earn $3000, your monthly expenses are $2100, your
monthly savings are $600 and your monthly investments are $300.
Of course, this is only a rough concept and it looks different for everyone and depends,
for example, on whether you have debts or not and you have to figure out for yourself
how you want to divide your money within the categories.
Track your spending The next rule is to track your expenses. It's
simple and doesn't take much time, but it has a big impact on your finances. This rule
in combination with the 70% rule gives you full control over your finances and allows
you to save a lot of money. Just take 10-15 minutes once a week and collect all your bills
for that week and allocate them to your categories. The advantage is at the same time that you
always stay on track and immediately recognize problem areas and also recognize whether you
are sticking to your budget.
spend money on things that help you earn more This rule will not help you save money in
the first place, but only indirectly it will help you manage your money better. The idea
is to spend money on things that will help you earn more money in the end, such as buying
a new laptop for work or investing in yourself and your education. However, this rule protects
you from wasting your money on unnecessary things and using it wisely when you are already
spending it.
Now I'm interested, what would you spend your money on if the bottom line is to help you
make more or easier money ? Feel free to write it in the comments and we'll get to Warren
Buffet's rule, which should ultimately be the cornerstone of your finances! But before
we get to the rule, let's get to number 4.
The 24 hour rule The 4th rule is the 24 rule. Some of you may
have heard this before. Interestingly, many wealthy people use this rule, although they
would not have to waste a second of thought on whether they can afford it or not. No,
they often take at least 24 hours before making a purchase decision. Why ? So that they avoid
impulse purchases, because these are mostly just unnecessary purchases and you can save
a lot of money. This rule automatically distinguishes between want and need.
Use the power of your savings Warren Buffet says "Don't save what's left
after spending, spend what's left after saving". This very principle should be the basic building
block of your finances. Many know it also under the term "pay yourself first". It basically
means that your first priority should be to save your money and at best make it work for
you and invest it. By following this rule, you won't fall into the trap of spending more
and then having nothing left to save, because your top priority is your savings. To make
this simple and automated, set up a standing order of 10% of your income, which is automatically
transferred every month to a separate account or even better to a separate debit, where
it is automatically invested in various assets. If you are looking for providers where you
can invest your money automatically, feel free to visit my description, there you can
read about my recommendations. This rule goes hand in hand with the simple approach of spending
less than you earn and living below your means, because it automatically prevents you from
getting into financial trouble. If you want to know how to live below your means, I have
linked you to a video in the upper right corner. So remember "Make your savings a priority
and spend what is left after saving and not the other way around"!
If you enjoyed the video and now want to know more about how to take control of your finances,
click on the video to the right or check out the video description. There you will find
more videos and resources to help you have more money at the end of the month.
And remember to hit the like button and subscribe to the channel if you are new here
We hope to see you in the next video.