How To Save Money | The Financial Diet

The Financial Diet blog:

[oxymorono]

I recently discovered that if I keep my savings account balance at a round number that's memorable and sticks in my head, I'm much more reluctant to take money out of it.

[elizabethdawe]

I think tracking your expenses/spending for a month (or year, or longer!) is a great way to know exactly how much you spend and on what. Knowing how you spend every dollar keeps you accountable for your spending and saving. Like you girls said, you don't need to set certain spending goals, but since I've started tracking every dollar I spend (manually in Excel), I now know how much I can save each month, just by virtue of how much money I've made and how much I've spent! It's the most realistic way to create savings goals - simply base it on concrete data.

On top of that, when you know your monthly expenses/spending, you don't need to save 6-9 months of your take home pay in an emergency fund, instead you can save 6-9 months of your regular monthly expenses and then invest the rest!

[MsFrenchkiwi]

For those that live in Australia, the equivalent of mint here is pocketbook :)

[EARSandelbows]

Can you show us how you set up your excel spreadsheet, Lauren?

[PogieJoe]

Thank you for already setting a tone of thoughtfulness and intelligence instead of soulless flash, flair, and rampant jump cuts. :)

[amandaconway]

LOVE THIS CHANNEL.

6 - 9 months is way too much if you're still in debt, though. 3 - 6 is normally more than adequate, and leting so much money sit around you're losing between 5 - 25% on the table between loans/credit cards/mutual funds/401ks. Money you leave sitting in a savings account earning .5% interest is a huge waste and drain on potential growth. Plus, if you're paying down debt or accumulating wealth in other ways, you can either be reducing the number of out of pocket payments or accelerating your long-term savings, which you can normally dip into in a pinch anyway. (Yes, taxes and fees acknowledge, but you'll likely gain that back through growth).

[danaberry]

Really excited to get more of this!! You're doing a great job so far.

[PhilipEnders]

Excellent breakdown! I found that Mint had some trouble linking with my accounts, but when it did work, it was amazing, I definitely recommend this. Chelsea and Lauren are so entirely spot on about all of this.

[Goldenhawk]

I love this series so much it's very helpful

[elshog]

Thanks for the show! Wish you the best

[LyssandraNorton]

Can you explain the defining factors of pre-tax and taxable money/income and the costs/benefits of each in different scenarios?

[RealLifeMoney]

Great video. I like the idea of looking at specifics where you can try to cut instead of trying to save a certain percentage.

[vp]

Dear Lauren and Chelsea. I've watched almost all of your videos and they all make so much sense! I love the fact that you are both never "moralizing" your viewers but are always very encouraging. Your optimistic attitude makes viewers want to give a try to the realistic goals you speak about.

Personally i'm a young law practitioner exercising as a self employed and I have set up my own practice since around 2 years already, at 26 years only which is considered as very young by most standards. It surely is something to be proud of but as any other person setting up a "business" (just like you Chelsea and Lauren) it comes with the disadvantage of very unstable and fluctuating income.

Can you please please please do a video on how to deal with (1) fluctuating income and (2) savings when self-employed?

Thank you

[gentleindiff]

Thanks guys! loveloveloving these videos! My husband is much better with money than I am, and it's really helpful to hear from both sides and work through from a logical (rather than emotional) standpoint. You rock!

[KatrinaEames]

Right now I'm not making enough money to have a savings account, or savings, but I like to pay for everything in cash when that is an option and I collect all my change and roll it up and deposit it. Don't take the change to services like coinstar because they take a portion of your money, deposit it directly into the bank.

[fromscratchauntybindy]

An American focus is to be expected, but I'll still follow along here in Australia. No idea what your IRA/401's are. Hung my head in shame when you suggested it being good to have a 6month savings buffer - I'm eeking by week to week, so it will be a real challenge to put things into action.
Thank you for creating this - it's time to face my money awkwardness once and for all!

[MrJCharlesB]

I'm Canadian so I have to adjust some of this in my head, but still awesome advice. Thank you for creating this channel! Is there any chance you will be doing an episode about how to recover from having to use the "emergency fund" you talked about? (The situation I find myself in now)

[alannathelioness]

I've been looking for a budgeting app for awhile now. I'm so terrible at spreadsheets! Thanks for recommending Mint to me! Also, I definitely notice I save more money when I have a separate savings account that I can't see and that isn't attached to my checking account in any way. Definitely a good thing since otherwise my savings would all go towards new books and lipstick.

[shorebaby]

I am the daughter of two depression era survivors, who both went through serious personal traumas. They the had a complete distrust of the stock market, but believed in saving. My first jobs were part time summer positions, but from the age of six, my parents opened an account with the now defunct Bowery Bank and they did this through the public education system in Lower Manhatten.

[sherrypoole]

Love your guys Utube. So many things you talk about are helpful. So is 20 percent what to aim for in savings?