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  • Everyone's heard of the tired old adage

  • of paying yourself first.

  • But that saying lacks a lot of useful details.

  • How do you actually pay yourself first?

  • So today, I'll lead you through some changes you can make

  • to improve your saving strategy.

  • [Your Money and Your Mind with Wendy De La Rosa]

  • First and foremost, you should focus on only one goal at a time.

  • Typically, we think about having multiple savings goals

  • for multiple things.

  • We have an emergency savings fund,

  • a vacation fund, a wedding fund,

  • a car fund ...

  • But one great study compared people's savings progress

  • when they had one savings goal compared to five savings goals.

  • And it turns out that when participants had just one savings goal,

  • they saved more than when they had five.

  • The research showed that if you made progress

  • in just one of your savings accounts,

  • you'd think you've made progress across all of them.

  • Like multitasking at work,

  • splitting your attention across multiple savings goals

  • just isn't efficient.

  • Now, that's not to say

  • that this will be your only savings goal;

  • you'll have many more throughout your life.

  • But I want you to think about the one thing that you want to focus on

  • over the next six months to a year.

  • Start with your emergency savings fund,

  • even if it's 500 dollars or 600 dollars, the average cost of a car repair,

  • and then go from there.

  • Now that you have a primary savings goal in mind,

  • let's focus on helping you increase the amount that you save.

  • Your main savings strategy should be

  • to switch from having to remember to save a small amount every month

  • to saving a percentage of your income automatically,

  • any time you receive income.

  • Now, some people advise saving 10, 15 or 20 percent of your income,

  • but that's not important.

  • You know your financial situation.

  • You know how much you can manage to save.

  • The real trick is to find a provider

  • that lets you set up an automatic savings plan

  • and not to have to think about it ever again.

  • The "set it and forget it" approach

  • is shown to help you save more.

  • Researchers believe that passive systems like this are successful,

  • because they work with our tendency towards inertia.

  • You don't have to manually initiate each subsequent transfer,

  • and you won't be tempted to hold back a bit

  • every time you make a savings transfer.

  • I want you to take the time right now to find a provider.

  • Go to your app store, download the app

  • and set up your automatic savings plan.

  • If you make these two small changes --

  • focus on just one savings goal at a time

  • and automate your savings --

  • you should find success,

  • even if you don't think you're saving that much money.

  • And it's easier than it may seem.

  • So there you have it.

  • We have demystified the old adage of paying yourself first.

Transcriber:

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A2 TED fund saving goal save focus

A simple 2-step plan for saving more money | Your Money and Your Mind

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    林宜悉 posted on 2021/03/03
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