Brendan shares 4 straightforward strategies to help you save $500 a month. Discover how small shifts in savings accounts, credit card habits, and shopping routines can add up to $6,000 in annual savings.
Key Points Discussed:
How to earn a 3%+ interest rate with high-yield savings accounts
Why paying off credit card debt can yield a 20%+ return
How to find hidden expenses with a single credit card statement review
The strategy that saves thousands at Costco, Target, Walmart and Sam’s Club
Transcript:
Hey, thanks for joining me on another Coffee with Waymark. Well, as the title indicates, I am going to show you in hopefully five minutes or less, ways to save yourself $500 per month or $6,000 per year. So let's jump in.
First things first is: when it comes to higher interest rates, it's bad for credit cards, but it's good for checking and savings accounts. I can't tell you how many of my clients have big chunks of money making less than 1% in usually one of the big bank accounts - the Banks of America, the Citibank, the Santander Bank or any of those big banks. They're making less than one percent. There are very easy ways to improve that, whether it's a high yield savings account that's offered at your bank, or a money market fund that you could get through an investment firm like LPL, you can actually bump that up to 3 to 4%. So just for instance, if you had $50,000 making next to nothing, and you put it into a 3% account, that's $1,500 right there. So there's $1,500 of the $6,000 I promised.
Number two, credit cards. So again, as I just mentioned a moment ago, when interest rates go up, that's not a good thing for credit cards.
So, most credit cards these days are now at 20+ percent, which means that if you have a $10,000 credit card balance that you're keeping, that's a $2,000 cost to you. Pay that off by any means possible. I have to be careful, by just about any means possible. And that even goes for taking money out of your investment accounts, your non-retirement accounts, but your investment accounts, because at the end of the day, what you're making the decision on with keeping your money in the investment account and not paying off the 20% credit card is that the money that you're keeping in the investment account is going to need to make more than 20% after taxes to be a better option than just cashing that out, paying the tax on it, and using it to pay off that credit card. So there's another $2,000 right there. So now we're up to $3,500.
Next thing that I want you to do. Take a look at your annual credit credit card statement. What I mean by that is, that every - I shouldn't say every - just about every credit card company has the ability to to download or to view your entire year on one page. And so what you'll see here, all the different things that you may have spent money on, air travel, vehicle, healthcare, services, lodging, merchandise, et cetera. Then, you can click on each one of those to see what you're actually paying money on. And I would be shocked if there weren't subscriptions that you're not using anymore, gym memberships you're not using anymore, streaming services you're not using anymore. I don't want to say guarantee, but I'm pretty sure that when you go through those line item by line items that you'll actually find about $1,000 worth of savings there.
Okay, final thing for you. This is something that caught me many years ago. I hired a budget specialist who looked at all of my expenses line item by line item, and she picked out and called me out on the fact that we spend a lot of money at Costco. Now, of course, I told her that, oh, you know, we can't do anything about that. That's where we buy our groceries. And what she responded to me was she said, you realize what the business model of Costco, Target, Walmart, all of those stores is: you walk in with a list of five things, you walk out with 20. It's the impulse buys that kill you. And I, and she asked me, how often do you go to Costco?
I said, maybe once every couple weeks. That's a lie. It might be a little bit more than every two weeks. But, she said, can you stretch it out to once a month? And in doing so, that changes it from 26 times a year that you're going to be fooled into buying things that you really don't need - the impulse buys that get you in trouble - and then only have 12 chances at falling prey to those strategies that the companies use. And there, I'm sure that you can come up with well over a thousand dollars of savings, if you can stay away from those stores that you have become accustomed to and think that, yeah, there's no way I can reduce my spending at those stores because I'm spending it on non-discretionary items or things that I actually need. When in reality, you're kind of fooling yourself because there are plenty of things that you buy at those stores that you really don't need, but you convince yourself to do so. So there you go. There's, about $6,000 of annual savings, $500 a month. I kept my promise and I think that's all I got for this week. So remember to be well and do good.
Brendan is the Managing Director for Waymark Wealth Management. He has extensive experience in comprehensive wealth management. His focus includes retirement planning, behavioral finance, investment portfolio construction, education funding, insurance & risk management, taxes, charitable giving, and estate planning. Brendan has an ability to take clients' complex visions and distill them down to simple action plans, helping them move from where they are today to where they want to be tomorrow.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
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The opinions voiced in this video are for general information only and are not intended to provide specific advice or recommendations for any individual.
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