How to Save $10,000 in 2019 | Phil Town

hi guys i’m phil town from rule 1 investing and today i’m gonna tell you how to save ten thousand dollars in a year [Music] as a reminder make sure you click the subscribe button in the Bell icon to get notifications when I release new videos saving an extra ten thousand dollars a year might seem like a pretty hefty goal for a lot of people but it’s a lot easier than it sounds I’m not talking about saving pennies through coupons not talking about skipping your lattes or eating ramen noodles every night no instead let’s talk about how to incorporate smart habits into your everyday life that are going to grow your wealth some tactics will require a little bit of work while others are passive combined this is going to give you a healthy balance of steps that won’t overwhelm you well let’s get started on what you need to do to make this happen first thing I want you to make a promise to yourself that you’re gonna save $10,000 this year alright before you can even begin to successfully implement any of these great steps you’re gonna need to be fully committed to it you can’t just think you know it’s kind of my goal here we don’t want this which is about the future of our life to be in the same category is going to work out or trying to get on a good diet or eating enough zucchini this has got to be serious this has got to be a promise to yourself okay okay here’s how we’re gonna go just take that $10,000 that we’re gonna promise we’re gonna make and divide it by 12 months and that’s gonna get you eight hundred and thirty three dollars a month that’s the extra cash you’re gonna have to come up with each month to reach this goal by the end of the year now you need to know that target number before you even start so whatever your goal is maybe ten thousand is too big maybe ten thousands too small whatever it is lock into it divide it by 12 that’s going to give you numbers that you can match to every single month now next I want you to take advantage of compound interest by investing so time and money go hand-in-hand so it’s important to make sure your money isn’t staying stagnant throughout the year compounding allows you to earn interest on what you’ve contributed what’s going into your account gets bigger and also you get money on the money that you’re earning from the compounding the longer your money is in an account with compound interest the more money you’re gonna make okay now with that in mind and this is for those of you have some money it’s possible to make a few extra thousand dollars you didn’t have before just from compound interest so if you have a large amount of cash good for you but if it’s sitting in a non interest bearing account then just putting the money in a compounding account put it in for you know a one-year Treasury bond and get you know 2% almost on it that’s gonna make a lot of difference over the course of the year all right next real important to do this pay yourself first pay herself first this is one of the greatest secrets it can ever teach you this rule that can help make you a few extra thousand dollars this year is so important paying yourself first means what you do is that you divert your money into that savings as soon as you get it you pay yourself first if you let it hit your checking account you’re gonna be more tempted to spend it but if you never see the money it’s like you won’t even know it’s there right and then it’s just saved and that is awesome so how could you do that wow there’s a lot of ways to automate savings right so there’s virtually no excuse not to do it you just sign up for a mobile app through your bank through your smartphone I mean just Google apps that would get you savings out of your straight out of your salary and you start to see that your number if you automate it every month and it gets taken right out of your salary that’s gonna get you there faster than almost anything else I can tell you to do and by the way this has been a secret forever pay yourself first and then of course live on what’s left that’s the hard part so in order for this to be successful here’s the deal this is the hard part you’re gonna have to give yourself a monthly budget in addition to your savings goal you’re going to have to be very mindful about your spending so here’s what I want you to do make a category for your expenses so there’s utility bills right and that’ll be power gas electric telephones stuff like that restaurants can be one right there eating out whatever so from there you can work backward and determine how much you can comfortably put into savings at the start of every paycheck and of course if you can do that you want to automate that amount so if you wait until the end of the pay period you’re gonna find out you had a lot smaller amount to save or nothing left over to save so truly to commit to setting aside ten thousand dollars this year you have to save before you spend now here’s a really awesome way to do that I really like this idea I think this comes from Dave Ramsey the idea that you take an envelope you put the name of that you know that group of fun of expenses into that so the utilities and you put the money in cash into that envelope right and that’s what you pay everything from you pay it from the cash in the envelope think about this is if you have an envelope that’s for like you know going out that’s your envelope for going out and let’s say you put after you’ve budgeted $833 to come automatically out of your paycheck and what you’ve got left is maybe a hundred dollars a month to go out with you put that in cash and when it’s gone you’re done going out find a nice position at the couch and couch-potato it whatever you got to do alright now here’s the next thing I want you to turn something you really love doing into a little side hustle okay into a little way to generate a little cash now saving money by reducing spending is really important but you can also make an impact by earning a little bit more so I want you to think about your existing skill set what you love to do what you’re talented at and how you might be able to monetize that passion or a hobby that you already pursue you know maybe say you got a woodworking in your garage and if you love it maybe there’s a way to actually turn that into a little small business maybe you could try to sell a piece each month at a local garage sale and put it toward a savings goal or how about this how about just putting out a flyer to your neighbors are knocking on some doors and just saying hey I’m doing some you know individual unique woodworking be happy to make you guys a little stool for the kids whatever it is you can do right and you’d be surprised how many people would say yeah I’d really be interested in having something like that in our house so there are countless ways out there for you to create and easy kind of part-time side hustle and it could be photography it could be dog walking could be doing what Melissa I hate to tell you about this I really do this is what Melissa and Janice did for a little while they go on a golf cart with a pitcher of martinis and at night on the one-month one night a year where everybody puts out their stuff to be picked up right all the garage stuff goes out there they would go go through it in the dark with pencil flashlights looking for you know Bowflex or a violent these are all things they found Bowflex machine totally good a violin machine two strings people just threw it out right and the net stuff went straight to ebay and Solaris Janice has made kind of a small fortune so whatever you can think of I mean honestly even if you had to go mow lawns even if you had to go do yard work I mean whatever you can do or even better have your kids go do it you can work part-time from home with online jobs you could become a virtual assistant for all those kinds of companies so I want you to just get creative yeah I can’t use your noggin start making more money and then direct it all into that savings account and don’t spend it you might find you get to $10,000 a lot quicker than you think finally I built a really cool little tool here I want you to try out my financial success planner what’s this gonna do is help you stay motivated and keep yourself accountable to that promise you made I’ll help you prioritize so you get to that promise I hope you increase your savings through monthly challenges and I’m gonna help you stay focused while taking time to appreciate what you’ve accomplished which is awesome yourself a pat on the back so it’s a great way to keep up with the momentum month after month so you can reach that $10,000 promise that you made yourself by the end of the year now I’d love to hear from you guys have you set a promise for 2019 that you’re going to do and achieve if you have what is it so leave a comment below with your answer and I’ll be sure to follow up with you and thanks for watching now go play if you enjoyed this video and you feel it was valuable in teaching you more about how to save money hit the like button and share this video with your friends and if you want more investing content subscribe to my channel and don’t forget to click the button on the screen for a free gift and thanks again for watching you guys