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Want a crash course on investing, wealth-building, and leveling up your finances? Join us for our all-day, interactive conference, The Intentional Wealth Summit, on November 12th. (If you can't join live, you'll get access to everything to watch at your own pace.) You'll also get access to our free Wealth Building Prep Class, and our YouTube audience gets an exclusive $19 discount on the tickets. Click https://www.eventbrite.com/e/the-intentional-wealth-summit-tickets-178073993107?discount=YOUTUBEVIP to reserve your spot today!

In our new series, Investing In Yourself, Chelsea walks you through the basics of getting your money under control so you can reach your long-term goals.

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Written by Amanda Holden

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 Intro



Hey, guys. It's Chelsea from The Financial Diet. And this series is sponsored by Fidelity Investments. Is there anything more annoying than when you're reading an article about saving money, and in terms of tips, it's like rent out the spare room in your house. And you're like, oh yeah, totally that house I own with that extra room that's not just being shared by me and my four other roommates. There is an enormous amount of out-of-touch advice out there. And it's easy to read that stuff and feel incredibly discouraged. As if the only tips that really worked for saving money are things that are totally out of your reach. So I wanted to take this time to provide you some real tips for saving money no matter how much you earn. No, I will not be telling you to rent out that Airbnb that you don't own, nor will I be telling you to cut everything out of your life that brings you joy. Although to be fair, those are pretty unsustainable tips in general anyway. So grab your latte or your glass of wine or your overpriced bowl of Cinnamon Toast Crunch because no, I will not be telling you, you must buy the generic brand of that delicious, delicious cereal. And let's talk about ways to utilize psychology and technology to actually start saving money. 

 One 


First, understand that literally no amount is too small to get started. One of the biggest hurdles of saving money, especially at the beginning, is actually creating the habit. But the more you do the act of saving money, even with very small amounts, the more it becomes a natural part of your routine, which is one of the most important things you need to establish early on. But here's the great news. We live in a golden era of banking. We live in an age where there are plenty of banks that will allow you to keep accounts where you're just putting in a couple dollars here and there and not charge you exorbitant fees just to maintain them. A lot of us probably grew up in the era of big box only banks where you were charged exorbitant monthly or yearly fees for the crime of daring to maintain an account that's under $1,500 in its balance. Which is extremely prohibitive to saving, especially if you're just starting out. But today, there are plenty of smaller banks and credit unions and online only options that will offer you plenty of ways to save and store your money without all of the extra baggage. And this opens up a whole new world of little by little savings. And as a bonus, some of these institutions might give you a higher rate of interest than that measly 0.01 that some big banks currently offer. So to find the account that works for you, start doing some research online. Websites like NerdWallet are great for aggregating all different options and ranking them in different categories and explaining their differences. Make sure to bank somewhere that's FDIC insured and isn't going to charge you a fee just for holding your money there. And then you can start little by little making those savings deposits. Because even if the number you're saving doesn't feel important, trust me that the act of saving it is. And frankly, opening up that account in the first place is half the battle.

 Two



Number two is set up different savings accounts for different savings goals. There's another big advantage of these no fee bank accounts, which is that you can have as many of them as you want for different purposes. You'll want different savings accounts for different savings goals. We sometimes refer to these as buckets and financial planning. But basically, these accounts ensure that all of your goals are being treated as the independent entities that they are, and you can even go so far as to rename these accounts based on the goal they represent, which frankly, you should because that will help keep you motivated and understand at a glance exactly where you are on the process to those goals. You're, of course, going to have an account for something basic like your emergency fund, but you may also want an account for something like an upcoming vacation or a good winter coat that will last you years and years to come but cost a bit up front, or a new car, or really any other goal that is shorter term but important to make space for. If you're anything like me and you legitimately enjoy planning and plotting and saving and watching the little numbers tick up, this is a pretty effortless way of making sure that you're staying motivated because you can actually see what your savings is going toward in a really literal way. You can even go the extra step and pair these accounts with something like a mood board or a Pinterest board to help visualize what the goal represents and stay even more motivated. Because having that tangible element will make it feel all the more real even before you can actually afford the item. Saving your money in one big giant nebulous pot that you're not even really sure what it's all going to can feel pretty demoralizing because just seeing some big vague number, as opposed to spending on a thing that you enjoy in the moment, never feels like a good trade off. But seeing your savings grow and build toward these things that you actually care about and can visualize will make you want to save even more.

 Three 


Number three, set up automated weekly or monthly transfers. You should be doing this a few days at most after your paycheck hits. Why? Because we know that it is incredibly dangerous to have money just sitting there in your checking account where you can spend it whenever you want. And more importantly, your brain has already counted it as money that is yours to spend. If you're never seeing this money, it's being taken automatically out of your paycheck and being put towards goals, you are much less likely to miss it. In fact, many of us might realize that we don't even notice the money is gone after a while because we're not mentally processing it as money we already had and had to give up. Now obviously, this is easier to do if you are paid regularly with something like direct deposit or a paycheck. But even if you are paid on a variable income, there are ways to do this by ensuring that you're automatically transferring a minimal amount that you know you can afford at a certain time each month. And then going in ad hoc and moving more money when it's possible to do so. This is part of the reason why service jobs, where you're getting paid in a lot of cash, can be very, very hard to save on because it's so easy and tempting to take that cash and go spend it right away rather than actually move it physically over to an account. The more you automate, the more you can undermine this impulse and ensure that money is making it well and safely into your various savings accounts every month.

 Four



Number four, figure out what you actually value and spend money on that. Now, if you've been following TFD for any amount of time, you probably already know that one of our biggest theories when it comes to managing your money well is making sure that what you are spending on are things that are actually bringing you real value in your life. And obviously, there are going to be some of these things that are no-brainers, like you're not going to pay for an expensive yoga membership if you don't really do yoga that much. Although I think pre-COVID a lot of us we're paying for pretty useless gym and studio memberships. But it can be a lot more nuanced than that. And often, what we're really getting value out of versus what we think we're getting value out of can be a lot more nuanced and gray. We live in a world where we are constantly being told that we need to buy things. We open up our phones, click on Instagram, and are suddenly drowning in a world of aspiration and envy and influence. It can be so difficult to separate out what is really truly adding to our lives versus what we have just been told to want or even think that we need. And our young adult lives are a time of self discovery, both in general, but also when it comes to what holds value for us financially. And to give a more precise example of this, let's take personal style. When it comes to fashion, it operates on a seasonal basis. And over the past several years especially, I feel like it's somehow constantly Fashion Week and we're constantly being bombarded with new styles. But if we take the time to actually curate what is our personal sense of style, creating a capsule wardrobe based on what we love and wear frequently, creating mood boards to really help define finding style icons that we can follow who have a more defined sense of aesthetic and are not constantly moving with the trends, you can start to become a little bit more immune to everything that comes and goes. The less you feel that you have a truly identified sense of style, the more susceptible you are going to feel to what everyone, quote unquote, "is wearing this year," such as, for example, the scourge that is low rise jeans, for some reason, making a reappearance in our fashion. For each area in your life where you are constantly being bombarded with a narrative, go out of your way to seek what works for you and what you actually feel good when you purchase so you can start to more and more tune out the noise.

 Five



Number five is you must learn to say no. To be perfectly honest, it's a bit disingenuous to say that you should only spend money on what you love because frankly, there could be a lot of things that you love. And sometimes, the things that you love cost more money than you actually have to spend. So beyond just making sure that you're eliminating down to what you love, you will also need to get comfortable with the idea that you can't have it all at once, especially when we are constantly surrounded by marketing narratives, and let's be clear, sometimes social groups that are tempting us to spend money-- sometimes money we don't have. This makes learning how to say no an active acquired skill. But the key is learning to do this with tact and creating a sense of balance even while saying no. For example, you might opt out of your friend's crazy expensive bachelorette weekend, but that doesn't mean you can't go out of your way to find ways to be actively involved with her wedding and let her know that it's important to you to spend this time with her. You just can't do it in a way that's going to cost that specific amount of money. But if you find that it's very difficult for you to say no, whether it's saying no to an individual person or just saying no to yourself when you see something that you want and feel compelled to buy it, you may want to start looking at the root of why it's so difficult for you to say no. There are all kinds of psychological and emotional factors that go into our desire to spend and sometimes to overspend. And if we're not dealing with the root cause of these issues, it can be very difficult to get over that impulse in the moment. This could come from financial shame due to our upbringings or our previous relationships with money, a feeling of inadequacy, a feeling that our social lives depend on our ability to spend money. We're all different manner of personal traumas when it comes to how we perceive ourselves. Because ultimately, our image is often very linked up with what we're spending on. So making sure to get to the root of that emotional problem and dealing with it on its own terms rather than just thinking of the symptom, which is the spending, is key to making sure that you can get to a better place and take control of that no.


 Six



Number six is track your spending. One of my all time favorite phrases is what gets measured gets managed. And you will find yourself blown away by how much you automatically want to be spending in a better, smarter, and more sustainable way the second you are keeping a close eye on what you spend. If you're looking away from the results of swiping that card, it can be very easy to feel like you're spending really has no consequences or not come to terms with money that might have been ill spent. But as soon as you're actually watching that money leave your account on a regular basis and understand where it's going, you are going to realize that this spending is very real, has real consequences to those longer term goals that you're saving for, and doesn't always feel so good after the fact. So simply forcing yourself to confront these numbers can be a very easy way to give yourself the impetus to manage them. Commit to learning intimately at least the past three months of all of your statements, to really understanding what was and wasn't worth it, identifying purchases you don't even remember making or which may have been fraudulent, and getting a really clear understanding of where your money is going every month. I promise you that just the act of doing this is going to automatically change your relationship to spending money.


 Seven



Number seven is find and accountability partner with whom you can celebrate your victories. We did a whole video here at TFD on having a financial buddy system. And it is incredibly important that you do this when you are working on saving, especially saving for the first time, because it can be difficult to feel motivated. It can feel socially isolating when you're trying to stick to a budget, and not everyone is someone with whom you can really talk about money. It's the same as when you're working out in a class versus a loan. For most of us, we find that when we're working out around other people, we actually give it our all a little bit more even if we don't know these people from Adam because just the act of having other people around us gives us a sense of accountability. Similarly, if you're setting a meeting with your friend to go and work out together, you are so much more likely to show up than if you're just planning to go to the studio yourself because you know someone will actually care if you don't show up. So find a friend with whom you can share your goals. Stay accountable to how you're reaching them. Share your victories, ask questions, give each other little motivations, find budget friendly ways to celebrate together, and create a real routine with them. You can have an ongoing chat, but also maybe have a weekly date night where you're specifically just going over all of your money stuff and can keep each other accountable in a fun way. And if this person is hard to find in your personal life, start finding these communities online. Now that we're basically all hanging out via Zoom these days anyway, it's not really that unusual to be meeting people online and using these tools to form accountability groups through long distance. Knowing that someone cares about how you're treating your money is going to keep you all the more interested in doing it well.


 Eight



Number eight is think of ways to earn more. Now this isn't the most fun topic, but it must be said. We have to be realistic here. At certain incomes, saving a lot is going to be a near impossibility. And to be clear, this is in no way a personal failing. This is a failing of a society that consistently underpays people for their labor. And if this might be your situation, it is important that you not feel shame over this, nor to feel obligated to cut every bit of joy out of your life to make sure you can save, as some financial experts would advise that you do. For some of us, an easier and more appealing option can be finding ways to bring a bit more money in. And yes, this may require initially investing in yourself before you can start investing externally. But even that self investment is very much an actionable step on the path to saving money. For example, invest in a personal website to showcase your work, brush up on certain skills that could easily be monetized via freelancing opportunities, sign up for various apps and temp options, reinvest in your education, or simply take the time to audit the skills and availability you already currently have that you could be using for freelance opportunities. Take it from someone who used to tutor English online constantly as a way to earn extra money here and there, you probably have more opportunities than you think at your disposal.


 Outro



So we covered a lot today. And to be honest, eight ways to save more money at any income is kind of a lot. So do not feel overwhelmed. You can start by picking just one or two of these steps to really start making a change in your relationship to money and putting yourself on the right path to saving more effortlessly and consistently. Good luck and happy saving. And as I mentioned, this video is sponsored by Fidelity Investments. And they are here to help you reach your savings goals. And if you're looking for an easy way to finally start investing what you save, check out Fidelity. Bye, guys.