A big thank you to Squarespace for sponsoring today’s video and for helping me build my
new website, but more on that later.
I briefly mentioned in one of my videos that I’ve always been a good saver, and since
then, I’ve been getting a ton of requests to make a video about it, and since I bought
my own apartment recently and posted about it on my instagram, I’ve been getting even
more requests. I’m very passionate about this topic, so I was like, yes, I’ll gladly
do that.
So, a lot of people are really good with money, and a lot of people really aren’t.
I developed healthy saving and spending habits early on in life. I started having financial
goals before I even made my first coin and I’ve always been dedicated to reaching those
goals.
I’ll be sharing some of those later on.
Money has simply always been interesting to me which is also why I went to uni for finance.
I don’t think money is something we should be whispering about. I think it’s important
that we learn as much as we can about it to make better choices for ourselves.
Now, this is not going to be a video about stocks and investments, you can go watch Graham
Stephan or Nate O’Brien for that. The focus of this video will basically be how you can
free yourself from a mindset that is limiting you and therefore save more and spend less.
There’s a lot of information to unpack, but I will make sure it’s super easy to
follow. So, get comfortable, put your pet in your lap, grab a notebook or an excel spreadsheet,
log into your bank and let’s get into it.
Quick disclaimer, I know everyone’s financial and life situation is very different. I’ll
be talking from personal experience and what I believe to be generally good advice.
Right off the bat, the obvious way to increase your savings is to increase your income. But
even so, a person could be making a lot of money and still have no discipline when it
comes to their personal finances. So, let’s get into it.
You might not have seen this one coming but changing the way you view and feel about money
is so important. A lot of people see it as this unattainable thing that just will never
happen to them. Every video I’ve ever watched on saving money, the comment section is always
packed with people writing things like “can’t relate”, “I’ll never make enough to
save that amount”, “I could never xyz”. Or, “they were probably born into money”
or “I’m sure they have rich parents”.
If you label yourself as someone who won’t and can’t, then that’s exactly what you’ll
be. If you believe that something is unattainable, it will be unattainable. You need to take
control of your narrative. Do you think anyone who was ever successful with money told themselves
daily that they couldn’t? I have a hard time believing that, and I actually believe
the very opposite of that to be true.
When you get yourself into the, I-am-just-as-capable-as-anyone-else mindset, which, by the way, isn’t a one-time
thing, it’s something you’ll need to remind yourself of, you need to have an aim, something
to encourage you and keep you on track.
Ask yourself questions like, what do you want to save for? What will you do with that money?
How much do you need? Why is it important that you save this money? What can or will
be the consequences if you don’t?
I know some people’s aim is simply to see the numbers on their statement grow, which
is fine. Personally, I need something more than that to keep me encouraged.
For instance, two of the biggest financial goals I’ve ever had have been 1. Being able
to move and study abroad and 2. Buying my own apartment. Now, I’ve done both.
One aim that I have now is that one day I want to own a farm where I can have lots of
animals and plant my own fruits and veggies. I also have this idea that I want the local
elderly people to come over for breakfast and coffee in my garden, like, once a week.
I’ll be like this party for local seniors where we’ll eat good food and play games
and share stories. I don’t know why. But I love that idea! That’s not something I
plan to happen anytime soon, but rather in 5-8 years or so.
This brings me to my next point, which is: it’s never too early to start aiming!
As I said, I only recently bought an apartment, but I’ve been looking at apartments for
like 5 years or more. Actively for about a couple of years. I wrote about my dream apartment,
I envisioned myself living there, and I started planning for it, I wrote down the addresses
I wanted to live on. I looked up expenses and even furniture. Oh, all the Pinterest
boards I created! Even though, at that time, realistically, I didn’t know when or if
it would become a reality.
But again, going back to the I-am-just-as-capable-as-anyone-else mindset, I’d think to myself “someone
else is living there now, why would I not be able to live somewhere like that, too?”
Basically, I acted as if it was already written in the stars for me, and I started saving
for it accordingly. Call it manifestation, call it vision board, I just call it planning.
Now, let’s get into the how to’s of things.
First things first, start a savings account if you haven’t already. You need to separate
the money that you are allowed to spend freely every month from the money that you are not
allowed to spend freely. You can’t have it all in the same place.
I’m not going to get into which type of savings accounts and interest and all that,
because my viewers are from all over the world so what applies to an American might not apply
to someone from the UK. There are tons of good information you can find online and you
can also talk to different banks.
Ok, you’ve now opened your savings account. Congrats! Now, it’s time to figure out how
much you can and should be saving.
Start by just zooming out. Get an overview of what it is that you are dealing with. here.
Where is money coming in? Where is money going out?
You might even see that you have certain expenses that you don’t even know what they are.
I know a lot of people pay for apps and things like that that they have forgotten about or
that they just weren’t aware of.
Now, calculate your basic expenses, the non-negotiable stuff that you simply need to pay for survival.
That includes things like shelter, food and anything health related. It might include
transportation or debt and other things as well, depending on your situation.
Once you have those expenses down, look over all of them and see if what you’re paying
is reasonable and if there’s any way you could keep any of those costs down.
How much are you paying for your phone? How much are you paying for your car? Could you
switch any of those things out for a cheaper alternative, and hence, be able to save a
few extra dollars or euros or pounds or whatever currency, each month?
Food can be a big one here. I personally cook at home 99.9 % of the time, I think eating
out all the time is a total waste of money unless you’re very passionate about food
and it’s one of your greatest pleasures in life and you have the means to treat yourself.
But even so, cooking is fun and it’s also a lot healthier to cook at home.
After you’ve calculated your total expenses, see how much of your income is left.
Now, let’s move on to the things that you don’t necessarily need in life, but rather,
that you want.
Netflix. Spotify. Ubering everywhere. Shopping. Any bad habits like cigarettes or alcohol.
How much are you spending on those things each month?
This brings us to the tough one, the one that stains, which is that life is all about priorities
and sacrifices. In money, in your personal life, in your relationships, in your career.
It’s an endless loop of “am I willing to give this thing up for that thing?”
Everything in life is an exchange.
So, what are you willing to exchange for some extra cash into your savings account?
Personally, there are a lot of things that I just won’t spend money on, where I would
rather have the extra cash. Getting my nails done is one of those things. Very rarely will
I get coffee or any overly prised beverage that I can make myself. Having a car. At least
not at this stage in my life. I don’t shop on sale just for the sake of it. The list
goes on.
If you’d like a video on things I don’t spend money on and why and what I do or use
as substitutes, by the way, let me know in the comments.
So, look over your “but-I-want-that” expenses and see where you can cut down the costs.
Now you might think “but all of those things only add up to around 100 dollars a month,
how’s saving that going to get me anywhere?”. It does. Money adds up.
Now before we continue, let’s talk about some of the things that I think are worth
spending on, I’d like to take a moment to thank our sponsor today, Sqaurespace.
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Alright, this next point here is probably the most crucial one. So, I know a lot of
people struggle with falling into temptation easily. We see something we like and think
“why not just buy it?”. We walk past our favourite restaurant and think “what’s
spending an extra 15 dollars today going to do?”. We see other people have something
and think that we want it too. We spend 50 dollars on wine because you only live once.
So, the key to really sticking to this one, beside learning what is truly a priority to
you and what is not, (which, by the way, you need to make an extensive list of that) is
to practice delayed gratification. Essentially, learning impulse control.
There are tons of good resources you can find on this topic, and it really is one of the
most important life hacks to learn in my opinion.
Essentially, it’s about thinking short-term vs long term, with the latter of course being
the way to go if you want to save as much as possible.
When I was 19 and friends wanted me to spend 100 dollars on the club every weekend, I was
like thanks, but I got a farmhouse waiting for me down the line, and chickens are expensive.
I do want to throw in a quick tip that actually used to help me a lot, and that was, whenever
I felt the urge to spend money on something, I’d translate the cost of that into the
amount of hours it would take me at work to make that money, and I’d ask myself “is
this thing worth 5 hours at the office?”. Since I really did not like my job at the
time, the answer was almost always no which was great. But now that I love my job so much,
it doesn’t really do the trick for me anymore. But I just figured I’d throw that out there.
Now, you might be thinking, but am I supposed to just stop living my life and do fun things
all together? What if I want to go eat out or get my nails done or shop?
Treating yourself is up for definition and deciding how much wiggle-room you give yourself
with your spending is up to you.
I’ve treated myself plenty in life and I keep doing so, but I do it within reason.
What “within reason” means to me may not be what “within reason” means to you.
How much money it makes sense for me to spend on treating myself based on my personal finances
might not make sense to you based on your finances.
What I know for sure, is that I’ve never looked back on my life thinking “if only
I would’ve gone to Starbucks every single day and gotten takeout three times a week”.
On the contrary, I look back thinking “I’m so glad I decided to exchange some of those
products, services and experiences for the money and put it into my savings account,
because now I’m being rewarded for it.” That, to me, is treating myself.
The last thing I want to add is that, savings aren’t only meant to go towards one specific
thing. People save money because it’s always smart to have a safety net. Life is very unpredictable
as we all know. And you never want to put yourself in a situation where you have very
little money to your name when preventing that could’ve been possible had you made
different life choices.