Are You Saving Enough Money? How Much Money Should You Save

Are You Saving Enough Money? How Much Money Should You Save


– So, how much money should you save? We hear 10%, 20%, or even 30%. I’m an overachiever, so I’m saving 50% of my income
when I’m in a relationship and 60% of my income when I’m single. So, that basically means that I’m saving 60% of my
income most of the time. Asking the question of how
much money you should save is like asking me what kind
of cake should you eat? Well, what kind of cake do you like? Do you wanna try something different? And is there enough cake
for you to be able to try all of the kinds? Protip from a fat kid at heart, do not try all of the cake because you’re going to
get a bellyache, I swear. Hey, I’m Jarrad from Debt Free Blueprint where I show intelligent people like you how to get out of debt and create freedom through buying Furbies. I mean, create freedom
through your finances using the Debt Free Blueprint. In this video, I’m not just gonna rattle off a percentage for you, I’m going to help you
walk through the steps to figure out how much
money you should be saving, along with some other questions
that you need to answer. This is the exact
process that I go through to decide how my income gets
divided up every single month. Think of this like a systematic approach so that you’re able to
go through this process no matter what financial
stage you’re at in life. Hulk smash that thumbs-up button, and don’t forget to hit
that subscribe button and the notification bell, so YouTube knows to deliver
these personal finance videos directly to you. One thing you have to keep in mind when it comes to your
own personal finances is that everything is situational. This isn’t to say that you can’t save as much money as I
can, or even more than me. You may just need a little bit more time to work out the details
to get yourself there. When you hear someone like
me say that I save and invest 50% to 60% of my income
every single month, instead of coming up with
excuses as to why you can’t or why I have an advantage over you, start thinking about
ways that you can do this in your specific life. Correct, I don’t have kids. Correct, I intentionally
don’t have a girlfriend around the holidays so
I can save more money. I’m just kidding, I don’t do that. And, correct, I don’t reside
in a high cost of living area. But, if I did have all of
those things in my life then I would 100% be looking at ways to overcome those obstacles, so I could take advantage of all of them. Start with an abundance mindset and figure out how you can get more money flowing into your life, if that ends up being where
the bottleneck is for you. You can only save so much if
your income isn’t increasing. The most powerful weapon that you have is the ability to make more money. First, we need to start
with the end in mind. What are you trying to save for? For most, it’s going to be retirement, the purchase of a new home or a new car. Not a brand new car, but a newer car. Because wealthy people try to spend the least amount of money possible on depreciating assets that
won’t give them a decent return. I hear this all the time, uh well, Jarrad, this $25,000 car will generate me return because I drive it to
work where I make money. Okay, that’s true, but I bet ya a $10,000 car
would do the same darn thing. Another tip, stop trying to
save for your kids college, make them go into a community college to get their general education
classes out of the way and force them to apply for scholarships. Free college, who woulda though? The main reason is that it’ll leave more money in your
pocket to save and invest, because you’re financial future is just as important as theirs. Once you know what you need to save for, then that gives us a little
something-something to aim for. Next, you need to determine how
much money you actually need to save for whatever it
is you were saving for. If you were saving for a house, then you’ll need to put
20% down to avoid PMI. You’ll also need a little
more money on top of that, because I’m sure you’re gonna wanna furnish that house as well. Unless you’re like me
and didn’t have furniture until you got a roommate. Yes, this was difficult
to explain at first to the women that I’ve dated in the past, but they eventually learn
that I’m more of a minimalist. So, some of them got over
it and some of them didn’t. If you were saving for retirement, then a good rule of thumb
is to have 25 to 28 times the amount of money that
you’ll need to live off of every single year. Having this much will
allow you to be able to withdrawal your money from
investments at a rate of 4%, so your money will not run out. For example, if you wanna live off of $50,000 per year during retirement, then 25 times that amount is $1,250,000. If you wanna feel a little bit more safe then you’ll need 1.4 millions dollars. If that number freaks
you out then settle down, I have links in the description
to different playlists that will help you get your
money and wealth right. Check them out after this video. If you’re in the United States and expect to be collecting
some sort of social security then you can plan on a
little lower than that, but personally, I would
be aiming for assuming that social security payments are going to be a lot lower in the future than they are today. Mainly because I don’t have
much faith in our politicians correcting that current
trajectory of the program. I’m gonna stop right there, though. I like to aim for the higher amount that I’ll need in retirement now so that as I get closer to that age, if I notice that I’m on the
path to have more than enough then I can cut back then. It’s better to over-plan with the ability to back down than under-plan and not have enough time to get my wealth up to the
amount that it needs to be at. Once you determine how
much you need to save, then you’ll need to know
how much time you have. This will play a huge role in deciding the next point that we’re gonna be talking about. If you’re saving for retirement, then that’s all going to depend on when you want to retire. This will most likely
be a longer time frame. If your plan is to retire early or declare financial independence, then you’ll have a
completely different strategy then someone who is
going to retire on time. If you’re saving up for a house, then the time frame will most likely be a little bit shorter. After you’ve decided how
long you have to save, we need to figure out
where you can put the money to help make it grow a little bit. As a disclaimer, everything
that I mention is my opinion and I am not giving you financial advice. My lawyer wanted to make
sure that I mentioned that. If you need the money
within the next five years, then the safest bet is going to be putting it into a high-yield,
online savings account or CD. I personally use Ally Bank
for this sort of thing. I know you’re gonna really, really wanna invest that money, but the stock market is too
up and down in the short term to be playing around
with this type of thing. Just to show you, look at what it did from the beginning of
2018 to the end of 2018. It’s all over the place. We’ve had an extremely
long running bull market that some people think that they can just throw their money into the stock market in the short term for
some quick, big gains. Please don’t allow the
rise in the stock market over the past nine years
to make you think that it’s a good idea to invest the money that you’re going to need
within the next five years. But hey, if you like risk and
are willing to take that hit and possibly lose some of that money, then do what you want. But please, for god’s sakes, don’t put your money in
cryptocurrencies like Bitcoin. The six to ten year range
is more of a gray area. While the longer time frame does give the stock market a chance to go through it’s ups and downs, it’s still a little bit risky. I don’t wanna tell you exactly what to do, but I’m going to tell you what I would do. Once again, I am not giving
you investment advice, I personally feel more
comfortable with investing money that I wouldn’t need for
another six to ten years. Keep in mind, though, that I
am less risk averse though, since my finances are in order
and I don’t have any debt. I use the investment platform M1 Finance for this sort of thing. I’ll throw a link in the description if you wanna check them out. Anything beyond 10 years and I personally am okay with
investing some of that money. I like low-cost, total
stock market index funds, like VTSAX or it’s ETF
version, which is VTI. Those are both through Vanguard. I’m also a huge fan of
Robo-advisors, like Betterment, if you just want them to
choose your investments for a really low fee. If you wanna do a little hybrid, then saving up money for five years, buying a rental property
and pulling a return from that property overtime
is a nice option as well. But, please keep in mind that
this is a little bit more work and takes a lot more knowledge. But, you can easily learn
how to do this sort of thing. Links to all the things
that I just mentioned are down below in the description. There’s your exact framework for determining how much
money you should save and how to do it. Go out there and make smart
decisions with your money. Make sure to smash that thumbs up button and pick up your free copy of
the Debt Free Prep Workbook. Hit that subscribe button and the notification bell to get more personal finance
videos, just like this, so we can start getting you to a point where you’re financially free. I’ll see ya in the next ones, friends. Adios.

9 Comments

  1. 713skywalker says:

    I would love to save 60%….right now I’m saving/investing about 40%💯

  2. Movingalong says:

    It’s crazy how u save more when ur single. U’d think u would save more when there are two ppl (relationship).. but for some strange reason I save more when I’m single also.

  3. Quest to FIRE says:

    ALL OF THE CAKE!!!! AT ONCE!!! 🤣😂 LoL love the furbys🤣😂

  4. Jarrad Morrow says:

    🔴 [Free] Copy of The Debt-Free Prep Workbook (while it’s still available):
    📚https://www.debtfreeblueprint.com/FreeWorkbooky

  5. Charles O'Neal says:

    I have been single for seventeen years now. I have about given up on trying to find a woman that is a saver. I can't even find one that doesn't spend everything she makes the minute she gets it.

  6. Matt F says:

    I technically save 100% of my income every month. I put next months budget or about 45% of that into a savings account that I pull over to my checking on the 1st of the next month. The other 65% I am currently putting toward building my emergency fund after just recently becoming debt free.

  7. shaylas78 says:

    My goal is to purchase a piece of property this year. I will be finished with school this year. Actually the latet part of this summer. The only way to beat inflation is to have a piece of rental property or have a buisness. Hopefully I will get a piece of rental property under my business. Right now my main focus is finishing this degree.

  8. Valerie Ewing says:

    Depending on your income, your girlfriends are either mid maintenance to high maintenance. 10% is a lot!

  9. SEXY유남생TV says:

    3:00
    do not make babies
    if you already have kids, send them off to adoption center so you can save money.

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