It’s not easy to join in - it’s certainly not easy to double them in just one year.
But financial adviser turned into social media influencer Humphrey Yang believes this is possible. In the YouTube video, Young told his 1.57 million users that if they want to double their savings last year in 2025, they should ignore standard suggestions on eliminating small pleasures, which won’t generate enough savings to justify the quality of life sacrifice they need.
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“For example, maybe you’ve skipped some Starbucks runs, or you’ve cut your subscriptions, or you’ve even created a budget, but still feel like your savings aren’t growing fast enough,” he said.
Young believes that the real award is not hidden in the little luxury that makes you happy, but in the main expenses of paying for emergency funds that may bring a fairly small amount of adjustments, holiday budgets or under payment buckets.
This is his double your savings in next year’s five-step plan.
Young notes that if someone spends $5 at Starbucks three times a week, reducing that habit to just one week and saving only $520 a year, it is a major lifestyle that pays for just modest growth.
Yang hopes his followers have a bigger goal.
He cited data from the Bureau of Labor Statistics (BLS) that shows that most households have the same main costs – housing, transportation, food and insurance.
He said Young hopes his followers can search for these high-cost categories “because the small changes there can actually lead to more important results,” he said.
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Yang said he recently agreed to sign a long-term lease to get a monthly discount on the new apartment – a landlord willing to pay for the safety of long-term leases. Most importantly, he negotiated a free rent for two weeks because “the rental market in San Francisco is really soft right now.”
“Because not many people want to move and find a new place in the winter of bad weather, this season has become easy, so if you’re looking for a new apartment right now, that’s a strategy.”
He also recommends switching amenities such as parking for lower rents, or just reducing prices like you would in any large purchase, such as a car.
To negotiate rent, Fidelity recommends first doing research and timing correctly, such as when your lease renews.
Insurance and shipping are the other two top BLS spending categories. They can be used as a fist or two to support your savings - but you can hit backwards.
Young told his followers: "Maybe you can buy a better car insurance rate, maybe you can tie your home insurance with car insurance." Usually, if you only call a competitive insurance company, you might find cheap insurance rates annually, ranging from $300 to $500, depending on how many cars or items you have. A lot of people are too lazy or they just don't want to take the time to compare with your offer, but I think your save time is one thing you can do.
In fact, according to the Consumer Reports 2024 Auto Insurance Survey, 30% of people have switched car insurance over the past five years to save money and save a median of $461 a year.
If you can’t lower your premiums, Young recommends carpooling or public transportation once or twice a week.
Next, Yang suggests adopting what he calls the reverse budgeting strategy.
"This is where you put your savings on the first place," Young told his followers. "For example, if you have a monthly income of $4,500 and you want to save $500 a month, put it aside immediately and use the remaining $4,000 for costs like rent, groceries, bills, and shipping."
Yang admits that many people don’t have enough money if their salary is paid out of the first savings they pay. The only way to overcome this deficit, he said, is to analyze your spending habits in the first three months of starting.
Yang told the audience, and Yang told his audience.
Once done, you will see the emergence of target categories that provide the opportunity to comfortably reduce spending and achieve the power of reverse budget.
Young urged his followers to aim to make the tenet of 10% of the universal citations of personal finance experts recommend saving from each salary.
"The reason I like 20% is because Fred said that not only is five times the personal savings rate in the U.S., but it also ensures that you're leaving enough money to grow over time and actually have a comfortable retirement," Fred said. "Because I assume even if I say you should save 20% of the time - let's pretend that's the target - you're probably hitting 15% even if you don't get there, which is still good. It's like shooting for the moon, you're going to land in the stars."
No matter how much you saved last year, it will feel impossible if you take your end goal as a starting point and doubling it in 2025.
Young gives an example of the people who saved $7,500 last year because they felt overwhelmed with the possibility of adding another $7,500 before that - so he suggests parsing the number into 12 manageable slices.
To save a year’s amount, you need to save an extra $625 per month. "This number is still a bit tough," Young said. However, he suggested further allocating it to $156 a week.
"Splitting the large savings target into a smaller chunk because it makes the target look less intimidating," he explained.
Young’s last advice is to keep your savings far from sight in what he calls “vacancy” accounts, so it’s consistent.
“You can only unlock it when you reach the end of the year or reach your savings target when you reach your savings target when you are very critical,” he said.
He recommends using an unfamiliar password to secure it and opening a separate account (not a storage account in an existing account) whose bank is different from the one that protects the funds you use for your leisure spending.
“You really want to think of this account as a locked treasure,” he said.
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This article originally appeared on gobankingrates.com: How to double your savings in the year.