if you've ever tried to save more money chances are you failed a lot but the truth is it's not your fault you just didn't have the right strategies and tools so here are 8. 5 proven ways to effortlessly save faster according to science the first strategy is the pineapple pizza rule the reason many people have trouble saving money is because personal finance can get really confusing like when I first took it seriously I had no idea what any of this meant so I came up with the pineapple pizza rule it's the principle that reframes money to make it way more approachable so whenever I bought something that wasn't pineapple pizza I would just think to myself how many pineapple pizzas would this cost how many pineapple pizzas could I buy with this amount of money for instance if this Candlestick cost $70 and I know a small pineapple pizza cost $7 then this Candlestick costs 10 pineapple pizza dollars meaning I could either buy this Candlestick or I can get 10 pineapple pizzas the simple reframing through the lens of something that I love helps me determine whether buying that thing is worth giving up something I know that I will love and obviously you don't need to use pineapple pizza dollars you can use anything that you love whether that's hot dog dollars or coffee dollars or Mrmagic lamp dollars number two the absolute price rule so when I didn't have much money I would always just default to buying the cheapest things because I thought that I was saving money I thought why would I spend $60 on jeans when I could get one for $125 from Dollar Tree but the problem I encountered was everything was just falling apart in a few months you see focusing on just the app absolute price or the outright cost to buy something didn't account for the additional cost and time needed to replace or repair those things so what I do now is I buy things based on cost per use for instance I was obsessed for a period of time with high quality coffee every day I would buy myself a iced coffee at a cafe because I could never make it taste as good at home so I thought to myself I could probably save a lot more money if I can make Cafe quality coffee at home so let's say in New York City a nice coffee outside cost $7 right and I bought it every day from Monday to Friday which means I spent about $1,820 on ice coffee now I could keep doing that or I could buy a used $500 Rebel espresso machine for home now I know $500 for a coffee machine is a lot of money but if I divide 500 by 365 the number of days that I'd be drinking coffee and the cost per use for that is just $1. 36 and if I use the brevel machine every single day for another year so 2 years the cost for use is now 68 and I'm okay spending 68 cents every time I make coffee compared to the $7 outside next the most impactful thing that helped me save a lot of money was doing this thing called a savings challenge the harsh reality is saving money can feel like an uphill battle because our brains are wired to resist change and in the book The Power of Habit it says the best way to save more is by breaking our existing spending habit Loop and I easily easily save so much more money after joining a saving challenge where I was held accountable and had an actual savings road map to follow which is why I'm hosting the largest free 5-day savings challenge on October 1st it's called the $1,000 savings challenge and it's completely free to join with the link below we had a ton of people in our last one and we're expecting thousands in this one where we can all basically just learn to save together and hold each other accountable so whether you're saving for a dream vacation a down payment or house or you just want to build an emergency fund join the free $1,000 savings challenge on October 1st with the link below but space is limited so if you click on the link and it says that it's no longer available then unfortunately we already reach to capacity number four is a 036 rule which is something I recommend everyone do before they start investing or even paying off debt I've been following this rule since I first started my 9 to-5 job and you might be familiar with the regular emergency frund rule that says you have to save 3 to 6 months of living expenses now that's a really good starting point but we can actually improve this approach to better fit each of Our Lives because we're all in unique situations not everyone needs to save as little as 3 months or as much as 6 months of living expenses so here's how you can use the 036 rule to determine how much you should actually save so as a baseline everyone needs to save 3 months of living expenses to start with no matter what then here's where it gets a bit more customized if you have kids or any dependence you add anywhere from0 to 3 more months to your emergency fund number next check out your job and your industry do you work in Industry where you can quit today and find a new job tomorrow or is your industry more cyclical and companies aren't really hiring right now based on this add anywhere from0 to three more months next do you have more than one stream of income and depending on how easy it would be for you to generate cash in the future you would again add anywhere from zero to three more months for instance in my situation I'd start off with the 3-month Baseline I have no kids or dependence so I'll add zero months to that um I am self-employed meaning that my income varies from month to month but I do work in a pretty high demanding industry which is social media and content creation and all the skills that I've developed are very transferable so I'll just add two months to that next I do have multiple income streams so I'll add zero months for that so in my scenario I would save 5 months of living expenses in my emergency fund which is actually more than I had a few years ago when I worked on Wall Street back then I still started at the 3 months Baseline I had no kids um I was working a stable 9 to-5 job and I had multiple income streams so I just kept it at 3 months and didn't add anything else the more income sources you have the more demand your industry has the less money you need in your emergency fund this next rule is from the book The million next store by Thomas Stanley like I don't want to overstate this but this rule might have been one of the biggest motivators for me to save and build wealth because it identified where I was categorized on this triangle UAW a aw or paw and I'll explain what these categories mean later on but basically this triangle tells you how you're doing based on your net worth based on your current age and income and when I realized I was a aw it really motivated me to push harder so here's how the wealth triangle rule works first you take your age and you multiply it by your pre-tax income and then you divide that total by 10 so let's say you're 35 years old and you're making $150,000 a year you want to multiply those numbers together and you get 5.
25 million and then you divide that by 10 and you get 500 25,000 meaning your net worth right now should be around $525,000 from here compare to what your actual net worth is to see where you belong on this wealth triangle if your actual net worth is half the expected level or less so like 260k in this case you're considered an under accumulator of wealth UAW if your net worth is around the expected level so like $520,000 you're an average accumulator of wealth AAW but if your net worth is twice the expected level or more at like 1. 2 million then you're a prodigious accumulator of wealth the point of the wealth triangle rule isn't to make you feel bad if you're at the bottom or at the middle of it rather it's to give you a Target some Target to strive towards and depending on where you are either help you become really excited about your situation or motivate you to make some changes but one caveat to this rule is that it doesn't work that great for people under 21 who really haven't had a chance to start working and saving money yet so if you are under 21 just use it as a motivator for what you should aim for in the coming years number six the 401K Rule and I don't say this very often but one thing I absolutely absolutely believe everyone should do is if you have access to a 401k is check if your company offers this thing called an employer match because if they do you always always want to contribute enough money to take advantage of the full match because your company is effective ly giving you free money as an incentive to save for retirement I've only had an employers match when I worked in finance for a few years and you won't believe this but the number of people even in the finance industry who you think are supposed to be really financially Savvy people a lot of people were not taking advantage of it and it was just wild because they were literally saying no to free money in 2023 the average employer match was between 4 to 6% of your annual salary so if you're in 65k a year and you have a 6% match and you can contribute $3,900 to your 41k then your employer will give you another $3,900 no strings attached bring your total contribution to $7,800 plus a study determined that the value on annualized Return of the tax Vantage and savings you get from the 41k is about 73% meaning tucking your money away in your 41k increases your returns by about 73% every year and I know it doesn't seem like a big number but if you have hundreds of thousands of dollarss in your 401k spread out across several decades along with the tax savings from reducing your taxable income this is going to amount to a pretty penny next is the 2410 rule which is the antidote for America's number one wealth killer in 2022 AAA found that the average cost to own a car was $894,000 to determine how much car you can actually afford without destroying your wealth first the 20 is your down payment you should at least be able to put down 20% of the price of the car from the very beginning some lenders will allow you to put even less down but to that you got to say no sir because the lenders are just going to charge you a higher monthly payment to make up for the lower down payment but this is a pretty bad idea in the long run because it's going to be a lot more money generally the more you can put down from the start the better next four is the four-year limit don't agree to financing terms longer than 4 years because the longer you let the loan run on the more you'll end up paying in interest and often times Shady lenders may include a clause or condition where it says interest rates can actually increase after the fifth year next aim to spend 10% or less of your gross monthly income on car expenses things like loan payments insurance and maintenance and if you can't follow the 2410 rule there's a good chance that that Lambo might not be for you next Warren Buffett once said price is what you pay value is what you get and although he was referring to investing in stocks we can apply this to buying stuff in general basically an items value is what you get from it how it makes you feel what problems does it help you solve and the Transformations you experience an item's price is just what you pay to get those things and an item's True Value is the difference between what you can get from it and the cost to acquire it the trick to saving money is to stop focusing on the price of things if you constantly focus on the price you build an unhealthy relationship with money and spending so yes in a way I'm giving you permission to spend money but under one condition the reality is if you only focus on the price of something and saving money you're going to deprive yourself of Life you'll be hesitant to go to birthday parties to go on vacation or even treat yourself to ice coffee once in a while you'll attempt to save all your money until you're 75 and if you're still alive by then maybe you can spend some of it but the problem is deprivation will just make you burn out and give up the better way to approach saving money is to aggressively spend on things that bring you True Value and joy but only if you aggressively cut cost on things that don't so if a $5 ice coffee makes you the happiest person in the world makes you more productive more social and reduces your stress for the rest of the day chances are the True Value that you get from that $5 cup of coffee is way more than that $5 so go and jooy it next the 0. 5 and the 8.
5 the separation rule which I've been using for years and has helped me save thousands of dollars So Far So companies like Amazon Apple and Samsung they invest billions of dollars to crack the secret code to get you to buy things they'll invest in ads on TV social media they'll spam your email inbox and text messages with ads and promotions and you might think that it doesn't impact you I didn't think it impacted me but studies show that we all subconsciously get impacted by it which is why it's so easy to go over budget when you shop in person or online but thankfully this separation rule has really helped me control my spending so basically what I do is I create a separate email dedicated to just marketing and promotion emails from brands that I like so the email is let's say Vincent go shopping gmail. com so anytime I go into a store or a shop online and they're like hey what's your email I'll give them that email that way any marketing and promotion emails that they send throughout the year goes to Vincent goshopping gmail.
