as someone who's worked in finance for over 7 years I wanted to share seven unique strategies that I've learned that allowed me to save 73% of my income the first strategy is applying the Paro principle to my money this is a concept coined in 1906 and in simple terms it means that for many outcomes roughly 80% of the consequences come from 20% of the causes for instance I've noticed that I finished about 80% of the task on my to-do list in the morning when I'm most focused and productive which is during the first 20 %
of my day and for the remainder of the day I'm much more likely to procrastinate I'll come across something really interesting and go down a rabbit hole like watching videos about how mammoths still walk the Earth when the Great Pyramids were being built which means I should prioritize the most critical task in the morning when I'm in Flow State to make the best use of my time and effort surprisingly the same principle can be applied to personal finance where 80% of your total expenses come from around 20% of your expense categories for example if my
monthly expenses were $3,200 broken down by these expense categories I can see that about 80% of my total expenses or $2,400 of it comes from 20% of my expense categories rent SL morgage and dining out so if I wanted to save money it would be a lot more efficient and impactful to focus on cutting the cost of these two expense categories that contribute to most of my expenses rather than focusing on these other ones try breaking down your expenses and identify which which 20% of your expense categories contribute to 80% of your total expenses then
start thinking about how you can cut those cost you'd be surprised by what you can come up with can you refinance your mortgage downsize or change your car insurance providers all these changes will save you a lot more than just cutting out a $5 ice coffee the next strategy that helps me save most of my income is spending money to save money and I know this sounds really confusing but just hear me out we're all limited by this concept called our saving ceiling you can only save as much as you earn meaning if you earn
$5,000 a month the most you can ever save is quite literally $5,000 and that's if you don't buy anything and the only way to increase that savings ceiling is by making more money but if you work at 9 to5 or you have a family or in my case you worked at 8 to8 sometimes at 8 to1 you're limited by how much time you have in a day but the reality is there are only two ways you can make more money one you can either trade your time for money or two you can trade money for
time for instance I started making content in videos while working at my full-time job I would spend many many late nights well technically mornings after work researching scripting filming and video editing just to publish one video and after months of only sleeping 3 to 4 hours a night I finally decided that it wasn't worth my health and time to be a loyal member of team no sleep so I hired a video editor to effectively buy my time back so I could focus on other things like building my actual business and sleeping while also working in
8 to8 to prevent burnout and you know not die and this decision to spend more money allowed me to increase my income lift my savings ceiling and ultimately save more money so whether it's fixing the sink doing your own oil change or mowing to lawn time equals money and always doing something yourself might not be the best use of your time next I realized that saving money becomes easier once you create create a system or habits around it so that you don't need to rely on Willpower to save it just becomes sort of second nature
the problem is the barrier to entry of just getting started and building out that system is the hardest part as Newton once said it requires more effort to get an object moving from rest than to keep it moving dog but two things that really really helps me take the first step and stop overthinking all this is one having someone to hold you accountable and two having a structured step-by-step road map to follow which is why I'm hosting the largest free 5day savings challenge on October 1st it's called the $11,000 savings challenge and you can join
for free with the link below thousands of people are joining and we're all going to learn to save together and hold each other accountable so whether you're saving up for a dream vacation a down payment or house or an emergency fund stop overthinking and just focus on taking the first step with the link below and again it's 100% free to join but space is limited so if you click on the link and it says it's no longer available then and unfortunately we already reach capacity next one of the biggest reasons for my financial success is
I follow the two-step TG strategy the T stands for tracking expenses and budgeting because if you don't know how much money you need your bank account is like a ship with holes in it you'll never know what you should spend more on or cut back on budgeting helps you find the holes and fix them before your ship syncs and it's pretty straightforward to get started like I created this budget tracker which automatically generates reports of my income and my spending and this allows me to easily learn what's working what's not working where to cut back
on and what to save for what truly matters which leads me to the G in the TG strategy which is setting financial goals like where do you want to go in life how much do you need and just having a financial goal alone is going to set you ahead of a lot of people because it forces you to switch your mindset from short-term thinking to long-term thinking without a financial goal you're just aiming in the dark and hoping for the best for instance one of my first really big financial goals was to build an 8-month
cash buffer to cover my living expenses so I could quit my full-time job and really just better myself and since I had a specific number in mind I was able to break it down into manageable steps with monthly weekly and daily saving goals and it kind of became like this game for me where I would try to hit my goals and keep the savings streak going but it wasn't always easy I've come to realize that when you grow up without money you tend to build up a lot of financial baggage and Trauma that negatively impacts
you later in life what I think is really helpful is there which can give you the strategies to work through this that's why I'm excited to talk about today's sponsor betterhelp better help's mission is to make therapy more affordable and accessible finding a therapist can be tough especially when you're limited to the options in your area better help is a platform that makes finding a therapist easier because it's online it's remote and by filling out a few questions better help can match you to a professional therapist in as little as a few days it's easy
to sign up a get match just check out the link below it's betterhelp.com Vincent Chan clicking that link supports the channel but more importantly gets you 10% off your first month of better help and because finding a therapist is a little like dating if you don't really fit with your therapist you can easily switch to a new therapist at no additional cost without stressing about insurance or who's in your network if you ever went through or are going through a hard time consider online therapy with betterhelp click the link in the description or visit betterhelp.com
vinen Chan thanks again and betterhelp for supporting this video next I had a phase in my life where I was just obsessed with buying things clothes watches video games and it was getting really really bad and then I learned about the Parkinson's law it's a psychological concept that basically says work expands to fill all available time like I I remember in school right if a teacher told me that I had to write an essay on how lemons are not a naturally occurring fruit but actually a cross between this and that fruit and it was due
in 2 weeks I would take the full two weeks to complete it I procrastinated a lot and I would definitely finish it but I took a lot of breaks in between but if A teacher told me the assignment was due in 4 days you best bet I'd be very efficient and finish it in 4 days which is why the saying is diamonds grow under pressure surprisingly the same principle applies when it comes to money subconsciously or not your spending can expand to fill all available money you have because you will never run out of things
to buy if you let it which is what I struggled with for instance if you make 65k a year and then you switch jobs and you start earning 100K a year you might start thinking cheerio I now have 35k more to treat myself with ah what a wonderful life but that is the literal definition of Lifestyle inflation and why most Americans can't afford a $1,000 emergency expense and what makes it worse is that your spending can technically expand to more than all your available money thanks to credit cards but I did find the best way
to break the Parkinson's law of money and this is by forcing myself to think I earned less for instance if I earned 8K a month once that 8K hits my checking account every month I set it up so that my bank instantly moves 20% of that or $1600 of that from my checking account into my high old savings account so that I'm only left with $6,400 to spend this trick makes you mentally take a step back and live off what you have remaining you don't even notice it what you're missing because out of sight out
of mind next when I first worked on Wall Street I learned about this concept called the quarterly review basically at the end of each quarter I would sit down with my manager and evaluate my work over the past 3 months she tell me what I did well what I didn't do well on and what we can learn and improve on for the next quarter and I carried this idea to my own personal finances and it changed everything keep in mind that this quarterly review is completely different from the TG strategy cuz think of your TG
strategy as if you're cooking a dish right you're following the recipe step by step while the quarterly review is when you actually take a step back and you taste a dish to make make sure it's going well if it's too salty or not salty enough then you know you're done goof somewhere and you need to Pivot so about once a quarter I'll take a look at my budgeting tracker or you can just gather the records from the past 3 months of your checking and credit card accounts by the way one of the reasons I buy
nearly everything on my credit cards is that it makes reviewing my spending super easy compared to using cash once I have my expenses I'll bucket them into categories like travel education utilities car payments Etc and then I'll go through each one to analyze my spending habits once I have a holistic picture of my quarterly spend I'll have some key takeaways like maybe I should spend more on education and pineapple pizza and less on movies and mugs there's nothing like seeing the evidence of your spending in front of you to force you to question it and
once you're done with your quarterly review and you know the changes that you need to make for the next quarter treat yourself to some pineapple pizza because I can't even tell you how much money I save from doing this once every few months cuz it's a good amount next is identifying the trigger rule so in the book take the stairs by Rory Vaden he says that whenever Buffalo see a storm coming they start charging towards it because they know that they can get it over quicker by going straight through humans like you and me I
think on the other hand whenever we see a storm coming we'll try to run away and avoid it but chances are we can't run faster than a storm the trigger rule says you need to identify the thing that's causing you to spend money do you tend to mindlessly buy things when you feel bored or overwhelmed or lonely and this is going to sound a little woo woo but try to ask yourself why for instance for a very long time whenever I was bored at home at night I would just aimlessly scroll through Amazon right I
wasn't looking for anything specific I was just trying to kill time but almost every time without fail I would find something that looked really really cool I knew it wasn't something that I needed but in that moment of boredom it seemed like the perfect distraction like I imagine how much fun it would be to have it and play with with it so I clicked Buy in my case boredom spending was my trigger and once I realized this I knew that I needed to create an effective response to it otherwise my apartment would be full of
gadgets and gizmos who's itss and what's its and thing Bobs like Ariel from The Little Mermaid so I created a two-step action plan to distract myself I made a list of activities I could do when I was bored things that wouldn't cost me a penny like playing black myth Wukong rewatching and secure for the 27th time or or randomly FaceTiming a friend on the toilet I also set up a rule for myself that I brought up before if I saw something that I wanted I would add it to my not now but later list and
then I'd wait 30 days if by the end of the 30 days I still wanted to buy that thing then I'll get it but what happens about 90% of the time is that after an item has been on the list for about 2 weeks I realize that I didn't actually want it in the first place and it was just an Impulse decision and that leads me to something you've got to start again accepting and it's that even if you're trying your hardest to save money sometimes you might still feel like you're not saving it enough
and that might be because you don't know these 8.5 proven saving strategies click here to discover the 8.5 proven ways to effortlessly save money
