How To Save Money Like a Pro (Save $10,000 To $20,000)

how to save money and build wealth

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Everyone always asks the question: “How to save money?”

More specifically, they ask “how to save money like a pro?” or “how to save money for… {a vacation, car, house, clothes, etc.}?”

Today, we are going to talk about how to save money so that you can stop living paycheck to paycheck and achieve financial independence. In other words, how to save money so that you can do whatever the heck you want!

You must be reading this and thinking…

“What the heck! How can anyone save over $20,000 in one month? I don’t even make that much in half a year in after-taxes!”

Don’t worry, my fiancé and I thought the exact same. When we graduated from college and started our first jobs, it never crossed our minds to save money and achieve financial independence.

Heck no, not even close!

In our heads, we thought saving money meant just that — “saving money.” In other words, we thought saving $200 per month was enough. We also thought that as long as we were employed with a full-time job, we’d be safe. It wasn’t until we started saving and investing our money into the stock markets that our lives changed for the better. I’ll explain more of that in a bit and it’s not what you think! No, we are NOT stock traders nor gamblers! We are just regular people with regular day jobs like you!

With that said, we were motivated to save as much money as possible so that we could set aside an emergency fund and at the same time, invest to grow our money. But, of course, we did all of this without depriving ourselves. Believe me, you don’t have to give up fun to save money and build wealth. If anything, it is not fun financing consumption with debt and living paycheck to paycheck.

According to this article by Forbes, 80% of Americans regret not saving sooner. Don’t let that be you! But don’t worry, I’m going to hold your hand and make sure you have a well-planned budget (as you’ll see later) to help you save money.

 

 

Related posts:

11 Fun Things To Do This Weekend That Saves A LOT of Money
How We Went From Almost $100,000 Debt Over $750,000 Savings
Free Money-Saving Resources That Will Save You Over $1,000!

 

 

Started from the bottom.

To put things into perspective, we started saving money seven years ago when he earned no more than $15 per hour (gross wage) and I earned a whopping $0! To be fair, the real game began when he switched jobs and I found a full-time position. His income was about $50,000 whereas mine was roughly $40,000, so we weren’t earning as high as we are today. However, it’s not what you think either. Most of our savings growth isn’t a result of how much we earn today. Instead, it’s how much we saved in the past and that money is working for us today. That’s the power of compound interest!

 

Related: How To Become a Millionaire With This Secret Weapon

 

Yup, the only reason why our savings increased by over $20,000 this month is because we started saving in small amounts a while ago. Over the years, we increased our savings as our income grew. As we monitored our progress, we saw our savings grow bigger and bigger each year. Surprisingly, our savings is almost equivalent to our after-tax salary!

It’s crazy to see how such a small action (saving money little by little each month) can create a huge impact (money starts making money for you)!

I wish I could show you our progress from 2011, but we only started tracking our savings and investments more closely at the end of 2016:

Date   Net Worth/Savings  Change
16-Dec $554,936.00 N/A
17-Jan $571,038.00 $16,102.00
17-Feb $581,622.00 $10,584.00
17-Mar $585,263.00 $3,641.00
17-Apr $601,095.00 $15,832.00
17-May $614,576.00 $13,481.00
17-Jun $624,705.00 $10,129.00
17-Jul $630,320.00 $5,615.00
17-Aug $654,409.00 $24,089.00
17-Sep $665,167.00 $10,758.00
17-Oct $691,188.00 $26,021.00
17-Nov $710,138.00 $18,950.00
17-Dec $714,102.00 $3,964.00
18-Jan $756,677.00 $42,575.00
18-Feb $764,974.00 $8,297.00
18-Mar $767,150.00 $2,176.00
18-Apr $786,000.00 $18,850.00
18-May $807,000.00 $21,000.00

Before I tell you how you can start saving money to build wealth, I want to point out that we started off with absolutely nothing and that results didn’t happen overnight. You need to be dedicated and very patient at the beginning. Along with that, you can’t be monitoring your progress every single day because that will just make you want to give up. Just remember that saving money and building wealth is a marathon and not a race. I am extremely confident that if you plan ahead with our three steps below (and carry on with what you normally do in your life), you’ll end up richer than you think!

Without further ado, let me explain the three simple steps you need to take to become a pro at saving money and achieving financial independence!

 

Related: The True Story of How We Saved Over $800,000 in 7 Years!

This post may contain affiliate links. Please read our disclosure for more information.

 

 

1. The fail-proof budget binder:

As y’all know, we were inspired by Gail Vaz-Oxlade’s money makeover shows and that’s how we learned about her clever budget strategy. Having that said, we followed her savings strategy and it worked wonders for us! To help you master your savings, we created our version of her fail-proof budget plan just for you! Yes, it’s 100% free!

In this budget kit, we included a monthly budget tool that keeps track of all your income sources plus expenses. With income in the picture, it’s easy to see how much you can allocate to both your fixed and variable expenses. To make your life easier, I also included a section where you can record your monthly investment contributions. This separate “investments” section will come in handy when you read about my third step below.

Aside from the budget tool, we also made these pretty weekly printables that will keep your budget and savings on track. These free printables were made to give you instant results to boost your confidence in your financial journey.

 

This budget kit is only exclusive to my subscribers, so grab your FREE copy here!

For more details about this budget kit, visit my post, The Free Budget Kit you Need To Conquer Your Finances.

 

2. Invest your savings:

I’m going to be very honest here. Without investing, there is NO way you could possibly build wealth or increase your savings from working a standard 9-5 job! It doesn’t matter whether you’re making $15 per hour or over $80 per hour. Investing your money will be the BIGGEST game changer (assuming you are disciplined to budget and save like a pro from step 1)! But don’t worry, investing isn’t as scary as you think.

In fact, it’s made simple with WealthSimple.

Remember how I mentioned earlier that we’re not day traders nor gamblers? Heck, no!

Though we hold onto a few individual companies’ stocks, our investment portfolio consists of mostly exchange-traded funds (ETFs), which is what WealthSimple invests in for you.

You may be scratching your head asking “What is an ETF?”

Based on WealthSimple’s definition, “An ETF is an investment fund that owns large swaths of investments (stocks, bonds, real estate, etc.) that are selected and managed by a fund manager; those investments are then sliced up into millions of pieces and sold to individual investors on exchanges.”

Now, imagine the top 500 blue-chip companies listed on the stock exchange (e.g. Apple, IBM, Amazon, Google, Nike, Bank of America, etc.). Instead of individually buying all 500 companies, you can buy this through an ETF that tracks these 500 blue-chips (i.e. the S&P 500 Index). In this specific example, you would be invested in an ETF that tracks the performance of the S&P 500 Index.

Yes, you could start picking stocks that you think will outperform the markets. But, if you want to save money and build wealth without having to worry about the markets, the best strategy is to buy and hold. Not to mention, numerous studies show that this is the best way to save and accumulate wealth because the vast majority of “financial experts” fail to beat the market. With that said, you’re already ahead of – and beating – most people by playing the “average” game!

 

Is WealthSimple right for you?

WealthSimple is perfect for you in the following situation(s):

– not looking for a DIY investing solution.
– complicated and advanced investing is not your bread and butter.
– no time to manage your money.
– looking for a hands-off approach with your savings and investments (set it and forget it).
– do not want to get ripped off by mutual fund managers and their ridiculously high fees.
– NOT a high net-worth individual (e.g. investments do not exceed more than $1,000,000).

So, here’s my simple advice to you. Get started with WealthSimple and let your savings and investments run on autopilot.

To learn more about WealthSimple and how you can take your savings to the next level, visit their website here.

In the meantime, here is a summary of Wealthsimple’s features:

– no account minimum.
– no trading fees, rebalancing fees, or account transfer fees.
– Dividend reinvesting is free (this is one of the best ways to form passive income along with growth!)
– The management fee is 0.5% for investments up to $100,000.
– The management fee becomes 0.4% for investments over $100,000.

 

3. Enjoy and live life to its fullest.

Now that you’ve created a fail-proof budget and started making monthly contributions to your investment account, it’s time to sit back and relax. Let your savings do its magic and live your life. Find reasonable areas to cut back on without feeling deprived. Read here for 50+ insanely clever ways to start saving money today. If you’ve done that but feel like you’re restricting yourself, find ways to increase your income.

I’ll be honest here, and I’m not going to sugar-coat this. Your first few years will be the hardest and your savings will feel like its growing at a snail’s pace. However, I highly encourage you to keep saving despite how slow your progress seems to be. My fiancé and I have experienced a lot of down times where we saved a lot less than previous months (sometimes even nothing) due to unexpected emergencies. That’s why it’s also crucial to build an emergency fund on the side in case of any shock (i.e. broken furnace, job loss, etc.). On top of that, there will be times when your investments aren’t performing well.

What should you do during these depressing times?

Well, nothing. Stay calm and do nothing (other than just living your life normally and assuming you’re still employed)! The last thing you want to do is panic and sell your investments for no reason. If anything, you need to keep contributing to your investment accounts like how you do every month as long as you can afford it.

My answer remains the same even when your savings and investments are doing well. Still, do absolutely nothing, other than enjoy your life. Continue to balance your life by building wealth but at the same time, spending only on things that truly make you happy!

 

Need a quicker solution to boosting your savings right now?

My simple answer: earn extra money!

Your investments will take some time before you see your money working for you. If you really want to boost your savings rate, you can look for other opportunities to increase your income. Read my articles below for many ways to make more money so that you can immediately increase your savings!

10 Things We’ve Done to Make Extra Money — #5 Will Blow Your Mind Away!

5 Real Ways To Make Money Online

13 Passive Income Ideas That Will Boost Your Savings

 

 

Enjoyed this post? Don’t forget to pin and share it! 🙂

 

 

Resources that will help you in your financial journey

Below are my top recommendations for saving money, making money, building wealth, achieving financial independence, and more!

 

TrimThis cute little robot is your personal finance assistant and his mission is to whip your butt into financial shape. Trim is a money-saving app that will help you save money by scanning your accounts and cutting your unnecessary expenses. He will also help you negotiate your cable, Internet, and cell phone bills. Pretty sweet, huh? Overall, Trim has helped their users save over $1,000,000 over the last month with their day-to-day finances.

 

Credit Sesame: So many people underestimate the power of their credit score. But did you know that you can save thousands of dollars by having an excellent credit score? The higher your score, the less interest you pay. As a start, you can check your credit score for FREE at Credit Sesame. This won’t impact your credit score at all and plus, it’s crucial to know where you stand! The sooner you start, the sooner you can improve your score and save thousands of dollars! Hint: having an excellent credit score can save you WAY more (over thousands $$) than clipping coupons.

 

Personal Capital: This is FREE and one of the best resources that will help you track your finances. By putting your accounts together, you can track your savings, investments, cash flows, and your net worth. Personal Capital can also inform you when your bills are due. With that said, this free app allows you to track and view all your finances in one place.

 

$5 Meal Plan: This is a weekly meal plan service that aims to make your life easy by helping you save time and money. For only $5 a month, you will receive a delicious meal plan that costs less than $2 per meal. On top of that, they offer special meal plans such as the Paleo diet and vegetarian option. Not sure if this is right for you? To make sure you’re fully satisfied, they offer a free 14-day trial absolutely risk-free. If you decide that this isn’t for you, simply cancel it with no questions asked.

 

Swagbucks: This 100% free resource allows you to earn FREE gift cards by simply completing surveys, shopping online, watching videos, playing games, and surfing the web. Here are some of the gift cards they offer: Starbucks (my favorite), Amazon, Indigo, Groupon, Bath & Body Works, Cineplex, and many more! My fiance and I have redeemed many $50 to $100 Starbucks gift cards without having to pay for our favorite lattes. Sign up for Swagbucks and receive your $5 welcome bonus here.

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3 Comments

  1. That’s awesome! So do you mean your capital appreciation was over $20,000 in one month from your investments in Wealthsimple? Not simply savings (e.g. taken out from paycheque?). Sometimes my increase from my portfolio is higher than my savings (actually most of time recently since my income is low on mat leave) which is amazing and always makes me feel happy haha.

  2. Oh wow $20K!! That’s a great amount to save in one month. Does this include any contributions you had to your investment and retirement accounts? Also capital gains as well?
    Nevertheless that is really impressive to save that big of an amount.

  3. Investing your savings is definitely a game changer. if you just keep all your money in a high interest savings account, the chances to grow your money is pretty slim. Inflation will consuming all of your gains.

    If people are afraid of investing, start slow by getting themselves educated. You just have to know how the market behaves and what type of investing method works best. After that just choose an index ETF then make regular contributions to your investments account. It’s that simple.

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