hey everyone this is bola I'm the founder and CEO of clever girl finance and welcome to clever or finance TV so in this video I'm going to be going over what you can do if you have no savings so if you're in this space where you have no savings you don't have any backup money in the bank keep watching I'll be sharing some key tips on actions you can take to help you start to wrap up your savings I'm also going to be sharing how you can get access to our budgeting and debt prioritization worksheets
which can help you as you work on creating your savings plan so be sure to stay tuned to the end of this video so having no savings can be stressful it can also be scary especially if you have a major financial obligation coming up or if an unplanned life situation happens no savings in the bank no money in the bank can be very scary and there are a number of reasons why people may not have any savings it could be that you experienced a health setback it could have been another type of life or financial
setback or it could have been from money mistakes or poor financial decisions however now that you're in this space it's important to just take the lessons that you can from whatever situation you're coming out of and then just let go of any judgment resentment shame or you know whatever you're feeling towards yourself about why you're in this position it's okay sometimes life happens and we find ourselves in a space where we need to rebuild and that is perfectly fine right but it's all about making sure that you get your head in the game you set
the intention that you're going to do what it takes to go from that space of no savings to now having money in the bank and so once you have set that intention you've taken whatever lessons that you can you have assessed the situation that caused you to come into this space where you have no savings there's some key things you can be doing the first thing you want to do is to know where you stand and this means calculating your net worth and I know this is not something that a lot of people like to
do because looking at net worth especially if you have a lot of debt and no savings basically means that when you run those numb you're going to be in the negative right however it's like you trying to get to a destination without telling your car navigation where you are now you have to be able to tell the navigation where you currently are so that it can map out the plan for you to get to your end destination and that same approach applies to your finances you have to determine where you are now right what do
your finances look like now what do you owe what do you own your assets versus your liabilities and you can use that as your foundational point to create your plan for your savings and how you want to approach ramping up their savings so knowing where you stand is really important the second thing you want to do is assess your lifestyle are you overextended is lifestyle creep playing a factor here do you need to downsize a lot of times people will find that as their income has increased still have their expenses they got the better car
they got the nicer apartment they move to the more expensive neighborhood they're taking the more expensive vacations and then they find themself in this space where they're spending every single penny they earn and they have no savings right where are you with your lifestyle another any areas where you can cut back right can you get a cheaper apartment can you downsize your car are there things in your home that you can sell in your closet in your kitchen to get rid of to make extra money that you can put towards your savings or towards paying
down your debt it's really important to assess your lifestyle so you can know what areas have room for improvement so that you can then begin to ramp up your savings the third thing you want to do is set clear goals how much do you need to save in your emergency fund and your sinking fund in your short term goal fund what do you need that money for and buy when having those goals having those clear goals will give you direction will give you a path as to what you need to focus - according to a
specific timeline this way you know exactly how much time you need to save and you can break down those numbers into how much you need to put aside every single paycheck in order to meet your now new savings goal next you want to create a budget and your budget is you telling your money what to do and essentially you want to build your savings ramping up your savings your emergency funds sinking fund any goals or saving for into your budget and you want to make it a line item a specific line item saving for emergencies
saving for sinking fund saving for XYZ and have that as a fixed line item in your budget so that every time you get your paycheck and you start to allocate your money you automatically know that you're gonna be putting some of it towards your savings goals number five I just mentioned however I'm gonna call it out as its own specific step which is to create your emergency fund the last thing you want to have to do is to leverage debt to take on even more debt to get out of a difficult financial situation or to
even pay your day-to-day bills and so you definitely want to start creating building your emergency fund and you can start with a basic emergency fund of $1,000 $1,000 can cover the most basic emergencies from buying new tires to getting a home repair to bang a plane ticket this will cover most of those basic emergencies and so create a plan build it into your budget for that first thousand dollar so that you have some savings set aside so that when life's unexpected situations happen you don't have to rely on your credit card and rack up more
debt instead you can rely on your emergency fund as your backup plan tip number six is you want to make sure you have a plan to pay off your debt and so again you want to build your debt repayments into your budget and have an amount you're allocating towards those bills every single month if possible you want to try to pay more than a minimum towards your debts and aggressively focus on getting rid of that debt so that you can free up that money that you're putting towards your debt to now put towards your savings
and the reason why you want to have a focus on paying off her debt is because debt compounds right and it compounds based on your interest rate and that means over time if you're only making minimum payments your balance can actually be growing and so it's important that you have this plan and place to pay off her debt to free up that money to put towards her savings goals and so a common question I get asked very often is can I save and pay off debt at the same time well the answer to that is
yes but you have to do it rity chicly the first part of it is getting an emergency fund in place getting that thousand dollars in place right having that in your budget so you start to put money aside every single month until you get to that thousand dollars so that's savings that's our first savings category your second savings category would be saving for retirement so if your employer offers you're free match I would definitely contribute enough to take that entire match that's you putting money aside because at the end of the day when it comes
to your retirement no one else is going to create a plan for you so you want to have that in place so that's your second savings category if your employer doesn't have a match you can decide to contribute something like 5% of your income before taxes or to an IRA so you're just putting something small aside so you have those two savings categories your emergency fund and then your retirement savings and then you want to shift your focus on aggressively paying down your debt and like I said paying down more than the minimum this is
one way in which you can save and pay debt at the same time and finally it's okay to start small and so you want to build up the habit and consistency of saving money if you have five dollars to save this week save it this week and then next week and the following week habit and consistency are key to building up to receiving as you make saving money a consistent part of your life it will get easier for you to save as you increase your income and you start to think about ways to earn more
money and so even if you have to start small it is ok a lot of people write off savings because they feel like they're not earning enough money or they have so many bills they can't afford to save anything but if you can find a couple dollars here and there every every time you get paid or every time you earn money you can start saving something savings grows from small amounts over time it grows from consistent actions taken over time and so don't discredit saving small it's okay if all you can do is say small
what's really important is you start and you save something I would also encourage you to get creative right if you have no savings you want to start putting some money into your savings account as soon as you can so take a look around your house your closets your kitchen electronics what can you offload quickly looking you sell to get some extra money to put into your savings accounts that's one way you can generate some extra income to wrap up your savings so be sure to head on over to clever all finance to get our budgeting
and debt prioritization worksheets to help you create your own savings plans I hope you guys enjoyed watching this video and I will talk to you soon
