It’s hard to make money for most. It’s even harder to keep it in one’s pocket.
How is one supposed to save money with bills for a car, house mortgage, insurances, student loans, and credit cards.
If you’re like most other people, there is nothing left over to put in your savings or investment account.
Let me say that again, 69% of Americans have less than $1,000 in their savings account.
This means that only the remaining 31% have above $1,000. You can find all the results here.
The numbers are astonishing honestly. I don’t see how people are comfortable having such a small amount for emergencies.
$1,000 is not a lot of money. I could spend $1,000 with the click of a button on amazon.
And just like that, my savings are gone in a matter of seconds.
That is an incredibly scary reality to face.
What would happen if this 69% had an emergency medical bill?
What about an unexpected natural disaster?
It would be devastating, I’m sure.
So, how can one free up money to put towards a savings account? Apart from simply not spending all your hard earned cash, there are plenty of way to contribute to your savings account.
1: Downsize your life.
The easiest and quickest way to free up your funds is to downsize your life.
Get a smaller house with a lower mortgage payment.
Sell that brand new corvette and get a cheap used car.
Instead of grilling steak every night, cook some rice and beans.
The number of ways one can downsize their life are limitless.
One method of how to pick which aspects of your life to downsize, is by looking at your bank statements in the last few months.
Where is the majority of your money going?
How can you free up some of that money?
Get creative about it!
2: Spend it on assets, not liabilities.
If you’ve read “rich dad, poor dad” by Robert Kiyosaki, then you should have a pretty good idea of an asset is compared to a liability.
For those of you that haven’t, the book is life changing. I highly recommend finding the time to read it.
Here’s a quick summary of Kiyosaki’s view on assets vs. liabilities.
Simply put, an asset is something that makes you money, while a liability is somethings that loses you money.
So lets use stocks as an example. Stocks can be both an asset and a liability. It is an asset if you purchase it and then sell it at a net gain. It is a liability if you purchase it and sell it at a net loss.
Spending your money on things that will create more money is a longer method of contributing to your savings account. This is because you will most likely not be able to touch that wealth for years to come while it builds upon itself.
3: Turn your hobby into an income stream.
I am conflicted by giving you this tip. The investor in me is saying this is a great idea, but the psychologist in me is saying quite the opposite.
It can be great to do what you love and make income from it. Who wouldn’t want to do what they love and get paid for it right?
Well, hobbies can easily become a source of income. My two biggest hobbies behind being a dad, are videogames and music. Believe it or not, there are multiple avenues of income for both hobbies.
As a musician I can play shows, play on the street, utilize youtube and create music content, write songs and sell them, or create weird sounds and sell those.
With videogames, I can stream my games or utilize youtube again and create gaming content.
If you use your head, the possibilities are really limitless for producing a side income with hobbies.
Now, the psychologist in me must warn you of the concept of classic conditioning. In a quick summary, classic conditioning is a process in which something is given a reward to create a behavior.
For example, If you want to teach a dog to sit, you give that dog a treat. You do so, over and over again, until the dog learns to sit. Eventually, the dog will expect the treat (reward) for sitting. When you stop giving the reward, the dog will start to catch on and stop sitting. This is called extinction.
Humans are no different. If one receives a reward for their hobby, other than the intrinsic value it gives us, they will begin to expect it. As a result, we will only engage in our hobbies if a reward is present.
In summary, using this method can suck the fun out of your hobby.
4: Pick up and re-do old furniture on the side of the road.
Easiest payday ever!
It may be different where you are, but down here in Louisiana, people will quite often leave their old furniture on the side of the road for the garbage people to pick it up. Some people’s trash is another’s treasure.
Pick it up, and re-do it. Most of the time, you can just paint it, stain it, and sell it for quick profits.
You can spend a few hours on the project and create an extra $100 from your efforts. You do this 10 times, and you’re in the 70th percentile for savings in America. That’s a pretty impressive feat, if I do say so myself.
Don’t let yourself be vulnerable like 69% of America. If you do, you put yourself at risk for any small incident to completely wipe you out. Establishing a comfortable savings account for emergency purposes is simpler than one may initially notice.
Rise above the rest and take control of your financial future. I know you can do it, do you?