1. Save 20% of your monthly income
- From personal experience, opening a separate savings account never worked for me because I would easily be able to with drawl the money as I am to deposit the money. Therefore it was not as easy to save, because whenever things got a little difficult I’d remember I had this extra savings account that I could pull from. I recommend opening a CD account, with a time limit on it. To get the highest annual return interest rate open a CD savings account with a time frame of 5 years. Meaning you can deposit all the money you want and you won’t be able to with drawl the money for five years. The following APR rates are listed as a resource
2. Open multiple accounts, allocate some money into each one.
- Your best bet to reaching the 1% is to create 4 or 5 accounts where you save your money. Open a fidelity account for retirement, purchase stocks or just transfer money into your account and allow it to grow over time. I believe you can with drawl the money from your fidelity account after the age of 65
- Open a CD account where your money can grow.
- Use the Acorns app to round up the Cents on your purchases, allocating money into a diversified portfolio that Acorns diversifies for you
- Open a Merrill Edge Account where you can save money and or optionally invest it into the stock market.
3. Allocate your money into your savings account before you spend.
- The most important part of saving your money is doing it as soon as you get it. If you can make saving your money FIRST before you spend a habit you will soon see the compounded effects reflected in your savings account balance
- The most important part is to SAVE FIRST. Then spend.
4. Track your spending
- Tracking your spending is one of the most effective ways to begin to save. Once you can see where your money is being spent you will be able to identify where it can be cut.
- Writing down where you spend your money sheds light on where you can save. Once you identify that every morning you have created a habit of stopping for coffee you can be more money conscious in resisting that morning cup of coffee. When you break it down, that’s 5$ a day times 7 = 35$ a week on coffee, That’s $1,820 dollars a year on coffee! That’s just absurd.
5. Make living below your means a habit
- The wealthy have made living below their means a habit long before they entered into the 1%. Create an environment for yourself that is full of less stuff so you can focus on what matters. Separate your emotions from your spending habits and become money conscious by writing down where your money goes. You don’t need those 100$ pair of jeans, and you don’t need your nails done every week or your hair cut every 3 months (unless you’re a guy). The increase in financial funds and freedom will be worth the sacrifice.
How are you going to save?