7 Places Your Money Needs To Go (How To Save Money)

Alright, this is going to be an all-inclusive video that shows you the seven

places

you can consider investing

your

money

after you get paid. Now most people can't get past step number two, but go ahead and implement them all. Seven of these different steps, then you could find

your

self in a much better financial position than you were previously and that is our main goal on this channel: to help people grow financially to help them save

money

, invest money and earn more money to that they can build that better financial future so if you're new here on the channel and want to learn more definitely consider hitting that subscribe button and the bell notification icon so you know on videos like this so let's get started with this now.

First it is important to understand why there are so many people who earn fifty sixty seventy thousand dollars a year or more. Why are they still having financial difficulties? Why do they have large debts? Is it the economy that is struggling? against you, is there a huge wealth gap? Are they charging us too many taxes? What is the problem here? And while all of those different factors can have an effect on people's ability to pay their bills, what it really comes down to is the number one factor is that most people don't understand how to manage their money, it's not taught in our schools, our parents don't teach it in most cases because some of our parents are in the same financial hole that other people may end up in and their children end up in it and their grandchildren end up in it, so it's essentially a system that trickles down and hopefully we can provide some value right now in this video, so it actually turns out that about 40% of Americans can't afford to pay a four hundred dollar emergency. expense, so the emergency expense of four hundred hours forty percent of Americans can't afford to pay because they are in a big financial hole right now for most of their lives, but your name can never be get out of that financial hole they can Be here, so hopefully we can provide some value here.

Let's talk about the first place you want to consider putting your money once you get paid. Okay, so the first place we're talking about here is actually before you get paid, so number one is. your retirement fund now, if you are in the United States, about sixty-five percent of the viewers of this channel live in the United States, you could take advantage of something like a 401k plan that may be offered through your employer now if not If you have 401k plans, there are other options too, but withdrawing money before you even see your paycheck through something like a 401k could certainly help you build that future you may be looking for because one of the worst things in the world has been cited by For a lot of people, I'm not sure how true that is, but there's definitely some truth to it and that is that the only thing worse than dying is running out of money before you do.

I know, like I said, that I would rather be alive than dead, but you still want to think about the idea of ​​running out of money before you die, it's certainly a depressing idea, it happens to people, it's very sad to see and you don't want that to happen to you. happen, so even if you're in your 20s right now and you're thinking, well, I'm not retiring for 40 years. What's the point of saving for retirement? This is the perfect time to do it, so simply put away 5-15% of your money before you see your paycheck. into something like a 401k, especially if your employer offers to match that opportunity, then that's something you might want to consider now, just keep in mind that I'm not afraid of a financial advisor and you should understand that there are risks involved with any decision. financial decision you make, any investment you are going to make, it will involve risks, so you must make your own financial decisions about what you are going to do with this, but this is an idea that many people take advantage of, but unfortunately some younger people, especially when they start working, they opt out of the baby 401k, they opt out of some of these pre-tax retirement funds that they can invest in and they end up suffering a lot. themselves in the long run, so this is the first thing you should consider doing before you even get your paycheck, set it up with your employer, if they don't offer you, that there are other opportunities, especially if you live outside of the United States, Your government may have something pretty similar to a 401k plan or something where you can get text messages before you get your paycheck or that money goes before you get your paycheck into some kind of retirement account or investment fund. that you can enter, so let's talk about it. the next one here, which is after that money is reduced to your retirement fund, that is, when it enters our checking account.

Now this will be our center for everything that happens. Well our paycheck goes into our checking account and like I said before this is what most people get up to 90% of the population they get to the checking account and then they pay their credit cards they pay everything with this and that's essentially your savings don't have anything past that, but what I'm going to show you here is that you're going to have things coming out of your checking account in two different areas and this is what's really going to be important: you can have automatic withdrawals in several different areas, accounts different banking accounts, so having just one bank account could be a mistake, you want to consider having several for different types of situations, so this is step number two: put it in your checking account and this can be your hub for everything you need. make.

This is important. Okay, now. Some people may not receive automatic deposits into their account from their employer, so you may be paid in cash or you may receive an actual physical paycheck. Now, in many cases, it will be optimal to have the money deposited directly into your account because then you can automatically withdraw money, you can set it up and you don't have to physically go to the bank and hand them a check and cash it or go in there with cash and try to deposit it in the bank that just takes a lot of time and in many cases it's just not worth it, it's better to deposit it directly into your account if you can set it up with your employer, okay, let's talk about the next one here, which will be very important, but this one is essentially paying for your

needs

now when I say

needs

we are talking about the basic needs to keep you off the streets and stay alive we are not talking about a television we are not talking about you know if you want to buy your nephew an xbox for Christmas we are not talking about anything like that we're talking about people's basic needs we're talking about food shelter transportation healthcare and utilities so that you don't get your electricity cut off and your water doesn't get cut off and you don't get evicted from your apartment, so this should depend on where live and how many children you have, depending on your current situation, this should not be an excessive amount of money, we are talking about basics, we are talking about rent utilities and these basics here, okay, so pay those that They are very important to stay alive, but nothing beyond that in this step, okay, you have to understand the difference between needs and wants, very important needs and wants and a lot of people can't decide because of the difference between those two. , so you need to consider what you need to stay alive and what you want, you need to get McDonald's or you could find a way to reduce that spending on food now that healthcare is very important, never skimp on healthcare, that's something I think which is something that people will skimp on, they'll skip health insurance, they won't go to the doctor because I'll save some money, but that could end up hurting you a lot. long term, so understand your needs, pay for those needs, but nothing more.

In addition to this, you should consider paying those minimum payments on your cards as well and we'll talk about that later, but paying anything that doesn't affect your credit score, so if you're skipping minimum credit card payments or things like student loans or mortgages that will hurt you, we'll talk about that later, but after your SSDs you might want to think about paying those minimum payments to avoid defaulting on the loans. Okay, so let's talk about the next one here, which is going to be very important and that is your emergency fund. Now everyone should have an emergency fund, regardless of whether you have a million dollars in your bank account or negative $100,000 to your name if you have an emergency.

The fund will be one of the first steps to alleviate some of the financial stress that you may have right now, so this will be a crucial step now we put it at $2,500, this could be $500, this could be $1,000. It could be $10,000 now over time, it's good to build on this. A great strategy to do this is to simply start by taking ten dollars out of each paycheck or taking out 20 30 $40 out of each paycheck and putting it into a separate emergency fund that is very easily accessible you want to be accessible because this is for situations where which is a real emergency maybe you don't have cash but you need a tooth pulled because you're in a lot of pain and you can't concentrate on anything else because you're in a lot of pain, that would be an emergency, another emergency would be if your car breaks down and You have to wear it to work, that's an emergency, but that's all we're not talking about if you have to buy someone a Christmas present, we're not talking about if you just feel like going out to eat somewhere, no. we're talking about vacations, this is strictly for emergencies and emergencies, only now you want this to be liquid and you want this to be easy to access, so somewhere maybe just a separate checking account, maybe a savings account or a separate checking account is probably the best option so you can easily access it very quickly.

You could also consider doing it in cash, but I wouldn't consider having $2,500. There is cash out there, but like I said, you can start with a smaller amount of money, start with $500, $1,000 and then increase it over time, especially if you have a family. It made me want to consider raising this a little more, maybe closer to $5,000 in case something happens. It happens, maybe you have to pay some medical expenses and you have that money on hand and like I said, even if you're in debt, it's important to have it because if you're at the zero dollar mark and you don't have an emergency fund Every time there's a small expense, you may have to start accumulating more debt to pay that expense, so having this will be a big help, so now we're looking at number five, which is paying off your debt now once. you build that emergency fund once you start to get back on your feet a little bit here you want to consider how to actually pay off your debt now there are several ways to do it and depending on the type of person you are and how much debt you have There are actually two different strategies for paying off your debt.

One of them is called the snowball method and the other is the debt avalanche method. Now, many people who are really struggling financially have large amounts of debt and If you are struggling to stay motivated to pay off this debt, then you may want to consider using the debt snowball method, so the debt snowball method Debt snowball is basically going to be what it's going to be, let's say you have five different types of debt, let's say you have a Home Mortgage Student Loans Personal Loan Maybe credit cards and a car loan, so what you do with the debt snowball method is to address the one with the lowest balance, so let's say you only have sixteen hundred dollars left on your auto loan. in it so that you address that first, regardless of the interest rate, address the lowest balance first and then let's say your personal loan has the second lowest amount, second lowest balance remaining on that loan, so address that and then continue down the list, tackling the one with the least amount of money you owe and then essentially eradicating those different types of debt until you start having fewer and fewer types of debt and then you have two types of debt and then you have one type of debt. debt and it's certainly something that can make you feel better once you start eliminating those different types of debt because when you're paying five, six or seven different types of debt and you're paying all these different bills at the same time, it's definitely something that can be really It's hard to stick with it, but I want to cost you something because there are some people in my family, friends that I have, that will take loans, maybe student loans, maybe car loans, maybe even a home mortgage, and at some point they can not. they get paid or they don't want to pay them, so what happens is they try to avoid it and it's like when you were in school and you had that school project that you knew was coming to mind every time you weredoing something, maybe you're at a party and you're just thinking about this project or there's this paper you had to write, it's in the back of your mind at all times sneaking up on you because you know you're procrastinating. people do that with loans and try to avoid these loans maybe they will stop getting calls from debt collectors maybe they will stop opening the mail knowing that they are behind on some of their different loans and they defaulted on those loans and Try to just not think about it but that is one of the worst because the situations you can put yourself in the situation where you want to face the situation and once you face it you will feel a lot better once you start eliminating different types of debt .

Now the Debt Avalanche method, mathematically logical, makes more sense and will allow you to save more money. but it depends on what kind of person you are and it depends on how much you can really focus on this without losing some of that logic, so the debt avalanche method is the same thing, if we say we have five different types of debt, but in Instead of tackling the debt with the lowest balance first, you're going to tackle the highest interest rate of these different types of debt, so let's say your credit card bills have $20,000 in credit card bills, but up here it's a pretty large amount where maybe you have $1,600 on your car payment and some on your personal loans, but $20,000 on your credit card bills while you address the higher interest rate because credit cards will probably be hot , the higher interest rate then you might have close to about 20% or more on the APR for that, so that's a debt approach.

Evelynn here is doing the same thing, but she's tackling those high interest rates first and still eradicating one debt at a time while paying the minimum. payments for all these different types of debt, you don't want to default on them, you don't want to miss those minimum payments because that's going to drastically affect your credit score and it's going to end up costing you late fees and it's really going to buy you in the butt, so the step Number six is ​​going to be what I would say is probably the most fun step in this whole process and that is saving at least four to eight months of payroll, so let me give you an example here now I'm trying.

To keep this closer to almost a year full of payroll, but let me tell you a story, so Bill Gates, when he founded Microsoft, found that he was struggling to please investors and he found that in some cases investors would be putting a lot of pressure on they. He, then, what he did was save enough cash. He wanted enough cash at Microsoft to be able to pay all his employees for an entire year. He had a year's payroll available in cash so he could pay all of his employees if the company wasn't making money now, the reason for this is because he realized that there will be times when maybe they will release a product that won't be as good as they thought it would be and maybe they're not getting as much money as I thought they would be and they could still pay their employees while they're doing this so this is something I learned from and realized look if you have a job and you're taking it for granted right now because we have a really good economy right now things can go wrong, think about 10 years ago, think about the recession we had about ten years ago and how many people were losing their jobs, rate unemployment of almost 10%, especially if you are an entrepreneur.

If you are self-employed you will need to understand that there may be times when things go wrong and perhaps your income drops quite significantly, so having some money in your bank account and not just a normal bank account in which is essentially losing money by going into a regular bank and we're talking about something that's going to keep up with inflation so I like to go with something like an online savings account, you can get them for over two percent of interest and that should essentially keep Inflation is a very stable thing and that's what I like about it.

Now you don't want to invest too much money into this in many cases and once again you make your own financial decision so you can choose what to do. this or not to do it, but you know that there are times when people lose their jobs, there are times when people go through difficult times and having this will give you the peace of mind of knowing that if you lose your job today you will be able to make a living from it. of this money for half a year before you even get a new job, so this is something I like to do and you can also consider putting money in a money market account or possibly CDs.

I'm not a big fan of CDs because they lock your money there for a certain period of time, but something that keeps up with inflation but is very stable, so you might also consider putting it in investments and maybe bonds of the stock market, but this is more stable and more predictable, so that's what I prefer. about this now let's talk about the last one here which will be investing now this is how you can really make your money work for you for number six, talking about the money in that bank account that earns you two and a half percent net interest, that's it probably won't make you rich, it'll be good to hold on, but investing will potentially make you rich, so we're talking real estate, stocks, bonds, other types of investments, possibly some riskier investments, possibly cryptocurrencies, whatever you are personally. and anything that you have personal knowledge in, then that's something that you can consider negotiating, but this is something that makes your money work for you now, this is step number seven, there are many steps before that that you want to consider doing A lot of people ask if I should pay off my debt first or should I invest first and you can do some of those things hand in hand, especially if you have low interest debt, if you have 4% student loans or a mortgage that's going to last.

If you're 30 years old and you have a rate of four or five percent, then you could do it simultaneously while investing, but if you have large amounts of debt, credit card debt, or you have debt that's going to have an interest rate of more than nine, ten or eleven percent. that debt then you want to consider paying it off almost in full before you start investing your money because the average return of the markets is between seven and ten percent per year, obviously it varies quite a bit, so you have to take that into account, but those are the steps and now, after these seven steps, is when you can take the money that you have left over and then spend it on trips, then spend it on vacations, televisions and different types of entertainment, but only after the seven steps do you have to pay yourself yourself first before you can start doing all those other things that you might want to do and this is a problem that I think some people run into with money management.

That's why people who earn eighty thousand dollars a year are poor. That's why the poor are not taking these seven steps, but all their money goes to their checking account, they don't track it, they don't manage a budget, they don't run it like a business and they simply spend most of it on entertainment, leisure, travel and all kinds of different things that are not necessary and end up being really harmful, so pay yourself first, invest money and you could find yourself in a much better financial position for the rest of your life now if we are having some kind of problem saving money or getting to step number seven because some people only get to step number three, four or five and then they have no money left.

They don't have money to invest. They don't have money to build. put up this payroll maybe six months of payroll and they say what do I do now and what you can consider doing is get a side job do a side job find a way to make some extra money in your free time and then take all that money and invest it or put it in some kind of six month payroll for yourself, so if you find any value in this video, thanks for watching, share it with someone who you think could find some use in this video.

I really appreciate all the support. this channel so we'll see you all next time and I hope you all have a wonderful day.