Becoming The Wealthy You Podcast | How to Save Money, Money Management, Budgeting, How to Get Out of Debt, Money Mindset, Personal Finance

102. Struggling to Save? How to Save Money Effortlessly Even if You Tried & Failed in the Past

• Germaine Foley | Life Coach, Financial Coach

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Speaker 1:

Welcome to the Wealthy Woman's Podcast, a podcast for high-achieving women who are great at making money but struggle to build wealth. You'll learn how to take control of your money, increase your net worth and make more. Ladies, it's time to create a life of more money and more freedom. Let's dive in. Well, hello everyone. Welcome back to the podcast. Today, we are going to talk about how to save money the most efficient way possible. Now, one of the main goals that women come to me with when they join me inside of the Wealthy Women's Academy is that they want to save right. They've tried in the past and no matter how hard they try, they just can't seem to save. So the three things that most people want help with inside of the Wealthy Women's Academy is to stop overspending, to get out of the credit card debt cycle and to save money on a consistent basis without dipping into it. And that is what I help them with and with this. Once you get these foundations in place, then you're able to really build wealth and enjoy life to the fullest right. But when you're overspending, when you're not saving and when you're stuck in a credit card debt cycle, it's super hard to build wealth and it's super hard to really enjoy life to the fullest because you're worried about money all the time, right, you're filled with financial stress and angst. And so I've created a system inside of the Wealthy Woman's Academy that will help you do all of that right Stop overspending, get out of the credit card debt cycle and to save money. And today we're going to look at the saving money piece. And before we get into it, I just want to remind you of something I shared before on the podcast.

Speaker 1:

When my husband and I paid off all of our debt, we paid off over $200,000 worth of debt. After we pay that off, we thought that it was going to be super easy to save money. We wanted to have a six month emergency fund at the time and I just thought we were going to blow through it and it would just happen super conveniently and easily. But it didn't, because I was not used to saving money. I was not used to having money right, because for years it was money in, money out. We were paying out any extra money we had on our debt and subconsciously we programmed our brains to not keep money, to not have money, to always send it away.

Speaker 1:

And so now, when I teach my clients if they want to get out of debt. We don't just get out of debt, we also save. We also do the things that I'm going to talk about today, because you have to program your brain to keep money, to have money, to be comfortable with money in your presence, and so many of my clients, when they come to me inside of the Wealthy Women's Academy, we have to let them know that it's safe to have money, it's okay to keep and have money, and I want you to know that as well. Okay, I know it sounds a little deeper than you're like well, I just don't save, I just spend, right. But it's so much deeper than that. It's literally your subconscious mind has decided that, because you don't keep money, that keeping money is unsafe. Literally, that's what your unconscious, primitive brain thinks. We know that's not true, right, we know that that's not true, but your primitive brain is just like well, it's unfamiliar for me to have money, so it must be unsafe for me to have money. And so we have to literally reprogram ourselves to accumulate money, and the system I'm going to share with you today will help you to do that with ease and very conveniently. So the point of this episode is to motivate you to begin saving money on a consistent basis in what I call a life happens fund and sinking funds using my favorite high yield savings account ever, which is through Ally Bank. Now, using this savings system will give you so much peace of mind when it comes to your readiness for unplanned expenses as well as planned expenses. I'll also share with you a special opportunity for you to receive a welcome bonus of $100 from Ally when you successfully enroll and fund your account by December 31st 2024 using the link that's in the show notes below.

Speaker 1:

Okay, let's get into the episode. So first, let's talk about the power of automatic savings. This works so well. Saving automatically works so well because of the whole concept of out of sight, out of mind, right, like your 401k. If you have a 401k, or if you save for retirement, or if you invest out of your paycheck or out of your business automatically on a monthly basis, you know the power of that because you don't even think about the money. It happens behind the scenes and you don't even miss it, right, and so when you can automate your savings, this same way, you will have the same benefits.

Speaker 1:

Right, your 401k or your SEP IRA contributions are happening behind the scenes and the money is accumulating and compounding and growing and sometimes you forget all about it until you're like, oh, let me check in on my investments, let me see how they're doing. And when you do that let's say you do it on a quarterly basis you notice how much they've grown because you are just putting the money in those accounts automatically, you're not dipping into them, you're not touching them and you're letting them accumulate. We want to do the same thing with our liquid savings and when we do this we create a habit and it becomes just our natural way of being. It's like building up a muscle, right. And so if you do this every single time you get paid, if you are an employee, every time you get paid, if you direct a certain amount of money to your savings account, it'll just become second nature. And if you have your own business, when you take out distributions, instead of distributing all the money into your checking account, you can automatically send some to your savings account. And this again it builds up that automatic habit. It lets you reprogram your brain and I highly recommend that you check in on those accounts, maybe quarterly or twice a year, so that you can see what you're doing, so that you can see the accumulation, so that you can let your brain be comfortable with not only sending the money, but having the money and seeing the money and knowing, hey, it's safe for us to have this money and to celebrate all that you've accomplished.

Speaker 1:

The other thing that's powerful about having your savings happen automatically is that it eliminates decision fatigue. Decision fatigue is when you have to make so many decisions throughout the day and by the time you have to make a few more decisions, you're just tired and you don't make the best decisions for yourself. And so when you decide, this is how much I'm going to save automatically, then you don't have to think about it again. You don't have to decide every single month how much am I saving this month? No, you get to just say, oh, I already know, it's already set up, I don't even have to think about it and I'm good to go. So it eliminates the decision fatigue, and when you eliminate decision fatigue, you're more likely to do more of what's good for you today and in the future.

Speaker 1:

Now, this is how you do it. You decide on an amount that feels manageable to you, right? I don't care how much it is, the goal is to just get started. It could be $50. It could be $100. And you can increase it as time goes on. And, believe me, it's very likely that you will want to increase it, especially if you're watching it like quarterly and you're checking in. You're going to be like, oh, I think I can do 100 now. If you started at 50, you'll be like, oh, I want to do more, because you'll see the money accumulating. You'll get excited and you'll actually start getting joy and a dopamine hit from seeing the money accumulate and you're going to want to do more. You're going to put more into it.

Speaker 1:

So right now, the goal is just to start, and don't let your brain tell you that it's not enough or that it's not going to amount to anything. Listen, it's better than nothing. Doing nothing will get you nothing, but starting, even small, will get you somewhere, right? So don't let your brain trick you out of doing this by telling you that whatever amount you're comfortable with right now is not enough. Okay, it's better than nothing. It's better than what you're currently doing now. Okay, so you decide on that amount and then you schedule the transfer to happen on every payday or one payday a month, however you want to decide to do it.

Speaker 1:

So if you say I want to just save $50 a month, then you pick the payday that you're going to save that $50, or you pick the day of the month that you're going to save that $50. Maybe it's the first of the month or the 15th of the month or the last day of the month you get to decide. Or you can make it align with your paychecks or distribution days. So if you're a business owner, you may pay yourself every other Friday, right, and so when you pay yourself, you can send money to your savings account automatically instead of sending it all to your checkings account. And then if you have a paycheck that you receive, then you can set it up that. Okay, every other Friday I get paid, so every other Friday I have automatic distributions going to my savings account. Okay. So now you know the power of automatic savings and you know how to set it up. Super easy Just decide on the amount and set it up through your checkings account. You could also, if you are paid by an employer, you can see if they'll allow you to just do a direct deposit into your savings account. So, for instance, some employers will let you divide your check up into different accounts. So, instead of having your direct deposit go to one account, you can have it spread out over two or three accounts, and if that's the case, that's even better. You can go that route.

Speaker 1:

So now let's talk about the purpose of this money. So there are two things we're going to do with this money. The first thing is we're going to set up what I call a life happens account, a life happens fund. Okay, this is a new terminology that I'm using. I've never used it on a podcast before because, after working with so many women inside of the Wealthy Women's Academy, I've noticed that the term emergency fund is pretty heavy and it makes people feel very restrictive around when they can use that money. Right, they think that they can only use it for, like extreme circumstances and it just causes too much mind drama. I watched so many of my clients have true need for the money that they have set aside and not even want to use it and have so much mental mind drama about using it all because they think it's only for emergencies. And so we just need to reframe it and we're calling it a life happens account, because the truth is the money that you save in this account.

Speaker 1:

This life happens account is money that you're setting aside to be spent in the future for an unexpected or unplanned reason. Okay, so the money is being set aside so that you can spend it when you need it. So there should be no drama around it. There should be no restrictions around it. The only boundaries you want to place around this account is that you're not shopping with it. You're not buying things impulsively with it. You're not using it to overspend. You're using it to put a cushion with it. You're not using it to overspend. You're using it to put a cushion in between you and life. Right, you want to have a stash of cash available for you when you need it. So a life happens fund is your stash of cash for any unexpected need, big or small.

Speaker 1:

So here are some examples that could fall under a life happens account. So, when you need to use money for an unplanned expense, big or small, these are just some examples of those things. A home repair I remember a couple of years ago we had a big home repair because we got a ton of rain in a very short period of time. A ton of water seeped into our basement and we had to use a nice portion of our life happens fund, but that is what the money is there for. You could have surprise medical expenses or some kid expenses. Maybe your child has something that has come up and you need to pay for it and you weren't planning for it. You can use this money for that. So, anything that is unexpected, doesn't matter how big or small it is, this account can be used for those things. It is your life happens fund.

Speaker 1:

Okay, here are the benefits of having this type of fund. It removes stress for life's curve balls right, we know that life is going to throw us curve balls. Why not be ready for them? It helps you to feel in control, knowing that you have easy access to cash that's set aside for things that are just outside of your control. Right, and there should be no mind drama, no guilt, no stress, no frustration around having to use this money. Actually, you should feel relieved and proud of yourself for actually having the money available for when life happens. Right, we cannot control life, but we can control how we prepare for life, and having this type of account is you controlling how you prepare for life?

Speaker 1:

Now you might be asking so, jermaine, how much should I have. I say your first goal should be to have one month of expenses saved, right? So figure out how much it costs for you to run your life for one month, all of your necessities, and decide, okay, that's my first goal. That could be $3,000. And then, eventually, you want to have three to six months of expenses, depending on your lifestyle and your comfort level. And for that first goal, go ahead and set a timeframe for when you want to reach that goal and after that you can, you know, set another goal. So maybe, once you hit that first month, you can say, okay, I want to hit another month and you can just take baby steps getting there.

Speaker 1:

Okay, so we talked about unexpected expenses. So now let's talk about expected expenses, planned expenses, things that you know are going to happen. Okay, this is where sinking funds come in. Sinking funds are separate savings set aside for predictable, non-monthly expenses. So instead of scrambling for cash when these expenses come up, you're already prepared. I love the saying stay ready, so you don't have to get ready, and that's exactly what sinking funds allow you to do.

Speaker 1:

So here's some examples of sinking funds you can have holiday funds, where you save a little each month so that you're ready in November and December, when the holidays roll around. You can save for your insurance premiums. Let's say you pay your insurance annually or biannually, instead of scrambling trying to make it fit in your budget. The month is's due, you can save for it every month, and when the premiums are due, you have the money set aside. You can do this for taxes as well.

Speaker 1:

A vacation fund or car maintenance right? So for car maintenance, you know you're gonna have to change your oil. You know you're gonna have to change your tires if they get flat, or ever so often you're gonna have to put new brakes on your car. So why not just have a small amount of money you put aside in a car maintenance fund so that when these expenses happen, you're ready? So these are all examples of planned expenses that do not happen on a monthly basis, but you know they're going to happen, so why not be prepared for them?

Speaker 1:

So you might be like, okay, how much should I put in my sinking funds? Well, that just depends on how many funds you're going to have and how much you want in each fund, and you know your life better than anyone else. So decide, okay, which funds do you want to have and think about the expenses that stress you out, the ones that you know are going to happen, but they stress you out every year. It could be your annual insurance premiums, but they stress you out every year. It could be your annual insurance premiums, it could be the holidays, it could be car repairs, I could have named all of them. And if you know that every time you have to pay that car insurance premium or that life insurance premium once a year, it causes you stress and you gotta scramble and mess up your monthly spending plan and you feel restricted and you feel just stressed out about it, then you know okay, this should be put into a sinking fund. I should create a sinking fund for this right. Same for the holidays. If the holidays are always stressful and you're always going into debt and you're always never prepared, then guess what? That is a great sinking fund that you should create. So decide on the expenses that happen semi-annually or annually, or even quarterly, that stress you out, and create a sinking fund for those. And then decide how much you want in each fund, add it up and then divide that by how often you're going to be contributing to your savings and then, each month, you'll distribute the funds into the appropriate bucket within Ally Bank.

Speaker 1:

We're going to talk a lot more about Ally Bank in a few seconds, but the reason why I love Ally so much is because they let you have one savings account and it's a high yield savings account. But you can divide the money in that one account into several buckets and you get to give each bucket a nickname. So instead of having a million savings accounts, you can just have one, and it could be a high yield account where you're earning 4% interest right now that's what they're paying, instead of 0.01%, which is what most banks are giving you and you get to categorize the money into buckets and you get to name them. So you can have your life happens bucket, you can have your holiday bucket, you can have your travel bucket right, you can have however many buckets you want and you can nickname them. And then that way you're setting yourself up for success. So you're ready for planned and unplanned expenses. So I know I've talked about Ally a couple times already, so now let's talk about why I love them so much.

Speaker 1:

So I learned about Ally Bank years ago when my husband and I bought our first car together. It was a Tahoe and that's who financed us. It was Ally Bank. Gm at the time worked with Ally Bank to finance their cars, and that's how I learned about them. And then fast forward to years later when I started learning about high yield savings accounts. Ally was one that I learned about and I absolutely love them. I trust them. They are FDIC insured.

Speaker 1:

Again, I talked about the buckets. You can have one account with multiple buckets. You don't have to have all these extra savings accounts. Some banks if you wanna do what I'm talking about with the sinking funds, you have to have all these extra savings accounts. Some banks. If you want to do what I'm talking about with the sinking funds, you'll have to open up multiple bank accounts, and I've tried that way before and it's just confusing. Ally is easy to use. They have no monthly maintenance fees or overdraft fees and they have competitive variable interest rates and right now, as of today, which is November 2024, their interest rates are 4% on their high yield savings account. Now I want to compare that with the average bank. Like the bank in your town, the credit union in your town, they are only paying 0.01% in interest. So this is an amazing deal.

Speaker 1:

Why not let your money that you have saved for the future for when you need it in the future. Make you money. No, this is not the same as investing right. You can get way more in the stock market. But remember your savings need to be liquid Money that you're investing in the stock market, in index funds, and all that that is for future use, five years or more down the line. You also need savings that you can dip into tomorrow if you need them Right, and you want to also be saving for planned expenses. Why not make interest on that money until you're ready to use it Now? The other reason why I love Ally Bank so much is because of this reason. I'm saving the best for last.

Speaker 1:

Ally Bank is offering my friends and family a special referral bonus of $100 when you meet the program's qualifications. Okay, so here's how the program works. One enroll in Ally Bank's referral program by December 31st 2024 using the unique link in the show notes. You have to use the link in the show notes in order to get the $100 bonus right, and when you use that link you'll get a $100 bonus, and I'll get a bonus too. It won't be $100, it's less than that, but I want you to know that I would also get a bonus.

Speaker 1:

Number two open a new Ally Bank savings account within 30 days of enrolling. Make sure you choose to open a high yield savings account. They have other types of accounts, but you want to open up the high yield savings account so that you can get the 4% interest which is their current interest rate and use the bucket system that I mentioned earlier. Number three set up a qualifying monthly automated transfer within 30 days of opening your account, of any amount. Remember how I said pick an amount. It doesn't matter how much account of any amount. Remember how I said pick an amount. It doesn't matter how much. Ally will still give you a $100 bonus if you have $25 going into your account, right, so it doesn't matter how much. They will still give you a bonus.

Speaker 1:

Pick an amount that's manageable, but also a little bit of a stretch goal, because I want you to number one get your first month of expenses in your Life Happens account and I want you to start beefing up your sinking funds so that you're prepared for planned expenses that are coming up over the next year. And then, number four complete at least three consecutive monthly transfers. So let's say you pick $100 as your amount. Do that three times over a three month period and then, once you do that, you will receive a $100 welcome bonus within 30 days of your third transfer. And remember, we want to make these automatic so you cut down on decision fatigue, so that you have it out of sight, out of mind, so that you just let it happen in the background.

Speaker 1:

Okay, let's do a quick recap as we round out today's episode. Number one set up automatic savings transfers to build consistency without effort. We want this happening in the background. We want it to just be working on our behalf without having to think about it all the time. Two establish a life happens fund for unexpected expenses so you're prepared when life throws you a curve ball. Three use sinking funds to plan for expected non-monthly expenses to avoid last minute financial stress.

Speaker 1:

Number four leverage a high yield savings account to maximize your savings growth and, as I already stated, I highly recommend that you use Ally Bank for this and take advantage of their $100 welcome bonus by clicking the link in the show notes. All right, I hope this was helpful. I will see you next week. Bye-bye, hey, before you go, if you're ready to create a life with more money and more freedom, then you're invited to join the Wealthy Woman's Academy, my signature coaching program, where you'll learn how to take control of your money and build wealth without sacrificing your lifestyle. To get started, head on over to germanefoleycom slash WWA, that's germaine with a g. See you over there, bye.