+72.5K views over 21.5d · ~3.4K/day · 4 observations
Why it worked
The video provides a clear, actionable, and relatable financial strategy that addresses a common pain point: difficulty in saving money. The creator's personal experience and the emphasis on automation make the advice seem achievable and less daunting.
Summary
The creator shares their most practical money-saving tip: to automate savings by dividing expenses into non-flexible and flexible buckets. They explain how they allocate 90% of their excess income to savings and investments, such as stocks, by setting up automatic transfers, which has made saving a natural and worry-free habit.
Structure
1Introduce the concept of a practical money-saving tip.
2Explain the two-bucket system for expenses: non-flexible and flexible.
3Detail the breakdown of a $1,000 monthly income into these buckets.
4Describe the strategy of allocating excess income to savings and investments.
5Explain the role of online banking and auto-deduction in automating savings.
6Share personal experience of consistently buying stocks and the resulting peace of mind.
On-screen text
The most
practical
money saving tip
I have
discovered
Monthly income $1,000
Expenses (non flexible) $600
Expenses (flexible) $400
Expenses (non flexible) $600
Mortgage $300
Utility bills $50
Food $150
Transport $100
Expenses (flexible) $400
Shopping $100
Social life $100
Savings $200
Original caption
We are all spoiled for choice when it comes to resources on finance related information, but choosing which one works the best for our lifestyle is the challenge.
More from @thatfilipinafarmer
More breakout videos from this creator.
Transcript
You have to spend all your money to start saving money. I know it sounds ridiculous, but it has been the most practical and realistic money saving tip that I have encountered a few years ago. And this advice has actually helped me come up with a very systematic way of saving. Let me explain how. In a nutshell, the article has mentioned that we have to see expenses in two buckets. First bucket is the non flexible expenses. Second is the flexible bucket for easy math. I've actually created this table. So it actually works. So let's just say that your monthly take home pay is $1,000. Monthly income $1,000. Expenses (non flexible) $600. Expenses (flexible) $400. So from your non flexible expenses, these are like the whatever happens in your life, you're going to have to pay for it. Like this could be your mortgage, your rent, your utility bills, your food and your transportation. When it comes to the flexible expenses, this is highly dependent on your lifestyle. It will depend on how much do you want to spoil yourself versus saving money. Okay, the flexible uh expenses. This could either be your social life and your shopping because you know, you still want to spoil yourself and your shopping. So the advice on that article is you have to make sure that you spend every dollar of your $1,000, whatever happens. Now let's focus on the flexible expenses because this is where we can actually make the adjustment and this will dictate on how much can we actually save every month. Once I have determined the non flexible expenses in my monthly income, I now had the idea that okay, I actually have this extra money every month. So how do I manage this money right? So at that time, when I discovered the article a few years ago, I was feeling like catch up mode because I felt like I didn't really effectively save in the last few years. So I felt the catch up to like save as much as I can. So what I have done is after I have deducted the non flexible expenses, I have allocated 90% of the excess money as part of my savings. If that works for you, then if it's not realistic, then it's okay as long as you are allocating something in your savings bucket. The best thing about online banking nowadays is that you can auto debit. So you can schedule the bank transfers on a monthly basis. You can either put a deadline or like an ending or you can keep it on going forever for as long as you are receiving a monthly income. So that is what I have done. Every month I have auto deduction from my bank account from my salary account going to my savings in the Philippines, one is in Singapore and then the biggest bulk of it is my stocks portfolio because at that time I wanted to buy stocks as much as I can whenever possible. And as a sales person, because I also get a commission on a quarterly basis, what I have also done is 100% of my commission on a quarterly basis, it only goes to my stocks account. So once that system has been laid down and every month, I didn't have to worry about it because I knew that the system of me saving is already in place. I didn't have to do anything about it. It was automatically saving for me based on the settings that I have in my online banking, right? So the next thing is because majority of my savings was going to my stocks account, I then started to make the habit of every month I have to buy stocks. I just had to decide which stocks to buy because I didn't want that money sitting in my stocks account knowing that like it's just sitting there when it could potentially be earning money. If I buy stocks immediately on a monthly basis, I was automatically depositing accounts in my savings accounts plus my stocks account. And then at the same time, I was also making it a habit to buy stocks on a monthly basis. Eventually I reach in everything just felt natural like I was doing it by default and I did not have to think and worry about like, oh, did I save anything this month? So that has been the most practical and most realistic money advice, money saving tip I have received. So that is how I managed to force myself to save on a monthly basis without having to worry about it or thinking about it. I don't know if this approach will work for you, but for me, it definitely did. And if I go back to working, that is something that I would definitely be looking forward to doing again. If you ever try, let me know and I'd be curious to see how it goes.
