This Money Saving Trick Really Helped Me When I Was Broke

Summary

The video script introduces the '$20 rule' as a simple yet effective savings strategy for those struggling to build a habit of saving money. The speaker humorously shares his personal experience, emphasizing the rule's low commitment and ease of implementation. By manually depositing $20 into a new savings account after each paycheck, viewers are encouraged to start small and gradually build confidence in their financial management, leading to a more secure financial future.

Takeaways

• 😀 The $20 rule is a simple savings strategy designed to help create a habit of saving money, especially for those who have never saved before.
• 👋 The speaker disclaims being a financial expert and emphasizes that their approach worked for them but may vary for others.
• 💼 The rule suggests opening a new savings account and manually depositing $20 every time one receives an income, aiming to form a savings habit.
• 🏦 It's recommended to choose an online savings account for convenience, starting with zero balance, ideally a high-interest account.
• 📈 The idea is to establish a specific routine that is easy to remember and follow, which helps in visualizing the growth of savings over time.
• 💰 The speaker suggests not automating the savings process to feel the act of saving and to adjust the amount saved if necessary.
• 🛡 The savings act as a 'shield' or safety net, providing a sense of financial security and peace of mind.
• 🎯 The rule is not about getting rich quickly but about building confidence in one's ability to save and manage finances effectively.
• 🎮 The process gamifies saving by allowing one to watch the account balance grow, similar to gaining points in a video game.
• 🔄 The speaker shares their personal experience of saving over $2,000 to buy a MacBook, which they used to start making videos, illustrating the practical application of the rule.
• 📊 General financial advice is provided, emphasizing the importance of establishing a savings habit before tackling more complex financial strategies.

Q & A

What is the '$20 rule' mentioned in the script?

The '$20 rule' is a personal finance strategy suggested by the speaker to help individuals who struggle with saving money. It involves opening a new savings account and depositing $20 into it every time one gets paid, as a means to develop a savings habit.

Why is the speaker not considered a financial advisor in the script?

The speaker clarifies that they are not a financial advisor because they are sharing personal experiences and strategies that worked for them, rather than providing professional financial advice tailored to individual circumstances.

What is the main purpose of the '$20 rule' according to the script?

The main purpose of the '$20 rule' is to create a savings habit in the easiest way possible. It is not intended to make someone rich but to start a routine of saving money consistently.

Why does the speaker suggest opening a new savings account for the '$20 rule'?

The speaker suggests opening a new savings account to start at zero and to separate the savings from other financial transactions, making it easier to track and visualize the growth of savings.

What is the significance of not automating the savings process in the '$20 rule'?

Not automating the savings process is meant to create a conscious experience of saving, allowing the individual to feel the action of putting money aside and reinforcing the habit.

How does the speaker describe the psychological impact of having a savings account?

The speaker describes the psychological impact as feeling like having a 'superpower' or a 'shield against the world', indicating that savings provide a sense of security and confidence.

What was the speaker's personal experience with the '$20 rule'?

The speaker's personal experience involved saving up over $2,000 by consistently applying the '$20 rule', which they then used to purchase a MacBook without going into debt, and subsequently started making videos.

Why does the speaker emphasize the simplicity of the '$20 rule'?

The speaker emphasizes the simplicity because it makes the rule easy to remember and follow, which is crucial for forming a habit, especially for those who are new to saving money.

What is the role of Rocket Money as mentioned in the script?

Rocket Money is a personal finance app that helps users manage their money better by canceling unnecessary subscriptions, lowering bills, and making budgeting easier, as endorsed by the speaker.

What general financial advice does the speaker provide after discussing the '$20 rule'?

The speaker suggests getting into the habit of saving while still being able to pay bills and minimum debt payments, then building an emergency fund, and only after that, considering more complex financial strategies.