Boost Your Savings Faster With These 4 High-Impact Moves
Doubling your savings in just one year might sound impossible, but according to money influencer Humphrey Yang, it's achievable with the right strategy.
In a financial advice video that went out to his over 2 million YouTube subscribers, Yang explained why traditional savings tips like skipping Starbucks or canceling subscriptions won't move the needle. Instead, he focuses on high-impact financial moves that target major expenses, helping you grow your emergency fund, vacation budget, or even a down payment fund faster than you thought possible.
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Here's four ways Yang recommended doubling your savings without sacrificing quality of life.
1. Slow the Bleeding From Transportation and Insurance
Insurance and transportation are two other top BLS spending categories. They serve as a one-two punch in sapping your savings -- but you can punch back.
"Perhaps you can shop for better car insurance rates or [bundle] your home insurance with car insurance for a discount," Yang told his followers. "Oftentimes, if you just call a competing insurance company, you may be able to find a cheaper insurance rate to the tune of [hundreds] per year, depending on how many cars or items you have. A lot of people are too lazy, or they just don't want to spend the time to compare quotes, but I think in terms of a return on your time in terms of your savings, it's probably one of the best things that you can do."
If you can't manage to lower your premiums, Yang recommended carpooling or taking public transportation once or twice a week.
2. Reverse Budgeting (Save First)
Next, Yang recommended employing a strategy he calls reverse budgeting.
"That's where you start by setting aside your savings first," Yang told his followers. "For example, if your monthly income is $4,500 and you want to save $500 per month, you want to set that aside immediately and then use the remaining $4,000 for expenses like rent, groceries, bills and transportation."
Yang conceded that many people won't have enough to spend if the first dollars from their paychecks go to savings. He said the only way to overcome this deficit is to analyze your spending habits from the previous three months before you start.
"The reason you want to do three months is that oftentimes, expenses will fluctuate month to month, and having a larger set of data to work with will give you as close to a true average of monthly spend that you can get," Yang told his viewers.
Once you're done, you'll see target categories emerge that offer opportunities to comfortably reduce spending and enable the power of reverse budgeting.
3. Work Backward From a Goal
No matter how much you saved last year, doubling it will feel impossible if you take the end goal as your starting point.
Yang gave the example of someone who saved $7,500 last year feeling overwhelmed by the prospect of coming up with another $7,500 on top of that -- so he recommended parsing that number into 12 manageable slices.
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To save that amount in a year, you'd need to save an extra $625 every month. "That number is still a little bit daunting," Yang said. However, he recommended breaking it down further to $156 per week.
"Breaking down a large savings goal into a smaller chunk works because it makes the goal seem less intimidating," he explained.
4. Create a 'Vault' Account
A final piece of advice from Yang was to keep your savings out of sight and out of reach in what he calls a "vault" account so it stays out of mind. "You only get to unlock this in very critical situations or when you reach the end of the year or perhaps when you reach your savings goal," he said.
He recommended securing it with an unfamiliar password and opening a separate account -- not a bucket within an existing one -- with a different bank than the one that safeguards your funds for casual spending. "You really want to think of this account like a locked treasure chest," he said.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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