3 Strategies to Save an Extra $1,000 a Month

You could be saving hundreds, maybe even thousands of extra dollars per month. And it doesn't even have to be that hard. In this video, I'm going to show you the three saving strategies you should be focusing on. That is, three things that will actually make a difference. That's why I call it the CEO approach to saving money. Let me walk you through exactly what to do for each strategy so you can save more than you ever have before, starting with the first money saving strategy, cut costs. Now, I know this might seem obvious, and I know a lot of you think I'm going to come over here and tell you to cut back on your lattes, but that's not my approach. The best way to save money is by focusing on the things you really don't care about or don't use. And this way the change is likely to be more permanent. So before we head into how to cut costs, there's one important thing you need to take care of first. Don't skip this part. If you're going to make a significant lifestyle change to cut your costs, you need to have a clear idea of why you're doing it and what is your end goal going to look like. A lot of people fail because they just start saving for the sake of saving. They don't actually know what they get out of it. And so a month from now, two months from now, they lose motivation. They just don't care enough. So ask yourself, what is the goal here? Are you saving for a cushy retirement? How much are you saving money for a vacation? Where are you going to go? What? What airline seat you're going to sit on? What are you going to eat while you're watching the sunset? Maybe it's a down payment for a house. If so, what's that house going to look like and feel like? Whatever it is, make sure this is something you're excited about. Most people, candidly are not excited about saving for retirement. That's not a big motivator. But you can start off by saying, hey, I want to save for something that's important to me, and I want to be more aggressive and cutting back so that I can have a comfortable retirement again. Don't just try to save for the sake of it. You'll probably fail. Now that you have a clear motivator for saving a big why I'm going to show you how to save hundreds of dollars every month in this section. The first philosophy that I want you to really internalize is that most people try to cut back on everything they try to cut back 5% on their cable, 5% on their cell phone, 5% on broccoli, and it's just a dismal, miserable way to live. And worse, it doesn't even really change anything. You can cut back 5% on carrots. It's going to make zero difference in your financial life. My philosophy instead is to focus on the big wins. So let's first start with the biggest two expenses that anyone has. Housing and cars. The problem is it's kind of hard to cut back on those. But let me show you the math so you know how this affects you. As a guideline, your total housing costs. That includes your rent or mortgage, your interest, insurance, taxes, how much it costs to get balsa wood from Home Depot. All of it should be no more than 28% of your gross income. Now, when I say 28%, in high cost of living cities like New York, Louisiana. San Francisco, it can be very difficult to stick to that number. Okay, you. You can up that number. Maybe you go to 32, maybe even 33%. But the higher you go, the more risk you're taking on. This is why a lot of people feel they never have any extra money. It's not that they're spending too much at the grocery store or at Target. It's that they're spending too much on housing and they don't even realize it. And of course, if you're spending 34, 36, 38%, you risk being overwhelmed if something goes wrong, like an unexpected car repair or job loss. So what can you do? Well, if you're really aggressive, you could take on a roommate. You could move to a further out, cheaper place. There's lots of different options. Unfortunately, housing is just really expensive right now. The other area where people consistently overspend is their car. And this drives me nuts. You can see the calculations in chapter nine of my book. But in general, the best thing you can do with your car, financially speaking, is to buy one that you can clearly afford. Clearly meaning all costs. Parking tickets, gas, repairs, and keep it for a long time. I've kept my car for 19 years. I can afford a new one, but I kept it. And every year I pay very little in it. Now, when you're deciding if you can afford a car, make sure that you calculate tco, or total cost of ownership. As an example, my car payment used to be $350 a month. But when I factored in all the other expenses, parking tickets, maintenance, insurance, registration, I paid over $1,000 a month. Think about that. That is why? People get surprised with their housing and with their cars, all they look at as a monthly payment. But they don't look at all the phantom costs associated with it. Now that you've understood the two biggest expenses, let's talk about discretionary expenses. These are areas that are a little bit easier to cut back on than your housing and your cars. What I want you to do is pick two areas where you are spending the most money and then target cutting back by 50% over six months. Now, why six months? Because it's very difficult to make an overnight change that sticks. This makes the change more sustainable over six months, which means you'll actually stick with your goal. Here's what it would look like. Let's say you keep track of your expenses and you discover that you're short $1,000 a month. This, by the way, happens a lot more than you think. You identify all the big wins and you realize, ooh, one of your biggest discretionary expenses is eating out. This is also very common. So let's say you're spending $500 a month eating out. Here's what it would look like to slowly cut down on that category over six months. The first month you cut back by 25 bucks. The next month another 25 bucks. Now, over six months, there might be the case that one month you go back up, you spend more. That's okay. Mistakes are going to happen. Don't worry too much about it. Over six months, it's a really nice gradual decline and that allows you to get comfortable making this big lifestyle change. It's not a race. But within six months you're able to cut your eating out spending in half. Now apply that same spending to a second big win and we are talking about hundreds of dollars of savings every single month. That is money you can redirect to debt to spend on guilt free spending to invest. You can do anything you want with that money. But you notice that slow and gradual and sustainable. Now that you've learned how to cut costs in a sustainable way, let's move on to money saving strategy number two. Earn more. Very few people know how to actually increase their earnings. And that's why you notice people obsessing over taxes and hoarding all their money and clipping coupons which will take 10 hours but save them 10 cents. Why? Because most of us forget that there's a limit to how much we can cut, but no limit to how much we can earn. That is why I always recommend that the people who follow my material look for ways to additionally earn More money could be on the side or in their current job. Let me give you a few ways. First off, you can negotiate a raise if you already have a job. This is a no brainer, but it takes careful planning. You don't just kick down your boss's door and say, give me more money. That's not how it works. Before asking for a raise, you need to establish what it takes to be a top performer by setting expectations with your boss and then you need to actually exceed those expectations. So six months before your review, use this email script to set up a meeting with your boss. In this script, you're basically going to tell them, hey, I'd love to do an exceptional job and I'd like to meet with you for a few minutes to see how I can be a top performer. Now, any boss is going to love this message because of course they want top performers working for them. And you're basically saying, tell me how to be amazing at my job. In that first meeting with your boss, you want to break down your role into the main areas and explain how you're performing in each of them. You want to get their input on what it takes to be a top performer. Don't let them off the hook. If they're like, you need to show up on time and deliver on your deliverables, you go, okay, that's great. Specifically, what do I need to do? Try to get it a number. Oh, I need to increase sales by 3.2%. Oh, I need to improve opt in conversion from 13% to 13.8%. Try to get as specific as you can. Then you say, look, I love these goals. This helps me understand what will make your life easier by me becoming a top performer. If I'm able to deliver on all these things, I'd love to discuss a compensation adjustment, but let's talk about that when the time comes. Okay? Always send your boss an email with a recap of the meeting notes and then you need to actually deliver. Start tracking everything you do at work. Make sure you're recording the results, quantify them, and along the way, I'd recommend every week or certainly every other week, send a note written record, say, hey, here's what we discussed. Here's how I'm trending. This one's a bit of a problem, but I'm working on it. This one's exceeding expectations. I'm looking forward to talking more now. If you want a raise, you can see you actually need to be a top performer. You're not going to get a raise. Just for breathing oxygen. Everybody does that. What you're doing is putting in the real work that sets you apart from all of your co workers. And once you are consistently delivering these great results and communicating that mention to your boss you'd like to discuss compensation at a meeting next month. Pro tip here. Role play your job negotiation with a couple of friends who have experience with so you can get feedback on your performance. I've done this extensively in my dream job program. People come in, they role play, negotiate with me. A lot of them are very timid. So do you think maybe I could ask for possibly a raise? It doesn't even have to be that much. It doesn't even have to be more than 25 cents. I'll take a dime. Just give me a dime over 10 years. Please, please, anything. I'll take anything. Don't you do that. If I find out any of my readers, anybody on YouTube did that after watching my material, we're in big trouble. Okay? Don't do it. There's a way to go in confidently, respectfully, and you have to remember that 80% of the work is done before you ever set foot in that room. Make your meeting successful by coming prepared with your current salary. Competitive salaries from sites like glassdoor, payscale and salary.com, your list of accomplishments with specific numbers. Okay. And be ready to discuss fair compensation. If you want to negotiate a raise, click the no stress negotiation link in the description. It will take you to our program on salary negotiation that includes the exact scripts you can use to earn thousands of dollars more. Plus videos on exactly how to have these meetings. Many of my students have used this program to earn $5,000, $10,000, even $20,000 raises. Often with a single conversation. Like my student Tiffany, who negotiated a 10% raise and extra vacation and medical benefits. Now, I understand it can be intimidating to negotiate for a raise. But if you prepare with all these techniques, you'll be confident going into your meeting. Another way to increase your income is to find a better paying job. Now, you may discover that your company simply does not offer a higher salary. Okay, no reason to get mad. It's just business. So what do you do? You start looking for another position. And during that hiring process, you have to remember you'll have more leverage then to than you will ever have now. According to research by Zippia, those who switched jobs had a 14.8% average increase in their salary, compared to only a 5.8% average increase in pay for those who stayed at the same job. Now, am I recommending that everybody become a job hopper. No, I actually think that's really bad for your career. However, there are times where you max out and you go, hey, I still want to work more, exceed expectations and get paid more. And if that's the case for you, you may want to consider switching jobs. For example, one of my students, Robert, went from a job making $52,000 a year to landing a new job where he makes more than $100,000. That's almost double his previous salary. If you want to find a new job this year, click the link in the description that will take you to our dream job program. And finally, you can make money on the side. Once you've internalized the idea that you can earn more, you will discover a huge surprise. You already possess skills that other people would pay for and most of us have never even realized it yet. It could be doing Excel analysis. I just paid somebody 150 bucks to do a quick Excel analysis for me via PayPal. People will pay you for that. Maybe you know how to train a dog to shake your hand. Somebody will pay for that. I don't know why, but somebody will. There's tons of things you're already naturally good at that people would happily pay you for now. Many of my students started earning more by creating a side business while working full time jobs. And they slowly built that business to give them the lifestyle they wanted. One of my students named Graham, he built a side business into a full time career. Because of this, he was able to spend six weeks in the south of France with his wife and two daughters. He didn't have to work during that six week vacation because he set the business up to run while he was out of office. If you are interested in making money on the side, but you aren't sure where to start, click the find your first profitable business idea link in the description. We're talking about the CEO strategy. You've gone through the cut cost part of it. You've gone through the earn more part of it. Now let's talk about money saving strategy. Optimize your spending. This strategy might actually be the fastest way to instantly save thousands of dollars per year in this area. The first thing I want you to do is try to negotiate your monthly bill, your rent if possible, and your debt payoff. Why now? I want to start with rent because it is so inconceivable to people that you can negotiate your rent. When I lived in an apartment in Manhattan, my rent went up and down and over the course of staying there for 11 years. I negotiated rent down four times. Please don't tell me rent only goes up because the people who say this, number one, they don't actually look at the price of rent around them. And number two, they never ask. They go, rent only goes up for me. I go, when was the last time you actually negotiated? They go, huh? Negotiate. You can negotiate. Yes. That's the point of this freaking video. If you can negotiate your rent and save $100 a month and you live there for two years, that's thousands of dollars saved. That money can be invested, it can pay off debt, shave off years of debt, payment. There's so much you can do. Now the key here is you need to know your comps. So. So I was always keeping an eye on how much are apartments in my neighborhood going for. I would track it. You can do the same thing. Now remember, your landlord is not going to simply lower your rent because you're a nice person. Maybe, probably not. They're going to lower it for one reason, because they have to. Rents are determined by the market. So if you're looking around and you see that rents have gone down 3%. Wow, that's really interesting. If they try to raise your rent, you go, you know what? I'd actually prefer for it to go down and you have a nice time and you can go through the negotiation process and maybe you get your rent lowered or maybe it stays flat. Hey, maybe they raise it anyway. But you have options at that point. You can move away, you can pay it, you can find another place. There's lots of options. Right now as you are watching this video, rents across the country have gone down. That's the median rent has gone down. And in certain areas like Austin, Texas in gone down double digit percentages. It's very important for you to know that there are cities where it's competitive, there are lots of supply coming online and that means you have the option to negotiate your rent. In New York, when they lowered my rent, you know what they did? They would give me one month free or two months free. Okay? They didn't want to show on paper that rent was going down, so they would slip it in the back door. What do I care? As a tenant, that's totally fine. My rent effectively went down. Now I've had lots of people negotiate their rent. Some negotiated a month, a month and a half, two months free. Others got a $200 reduction on their monthly rent payment. One of my students, Samir, negotiated his monthly rent by offering to sign a long term extended lease. His landlord Agreed. That saved Samir $3,500 per year. What's the point? The point is that unless you ask, you will never get a lower monthly bill. And this is true for a lot of your monthly fees. A lot of companies offer you introductory rates, or they lower your monthly fees if you ask because they don't want to lose you as a customer. A lot of these companies spend hundreds or even thousands of dollars to acquire you as a customer. You should take advantage of that, leverage that. Here are some bills you can try to renegotiate. Your cell phone bill, your car insurance, cable and Internet, bank fees, insurance policies, and your annual credit card fees. By the way, if you're carrying credit card debt, the next thing I want you to try is to renegotiate your credit card apr. Now, I'm not saying it's going to work always, but when it does, it can be huge. Lowering your APR can save you hundreds, even thousands of dollars in interest payments. So here's what you do. You call up your credit card company and you use this script. Hi, I'm going to be paying off more of my credit card. I'd like a lower apr. Um, why? I've decided to be aggressive. Blah, blah, blah. I'd like a lower apr. Other cards are offering me rates at half a wage. You're charging. Hmm, can't do it. Blah, blah, blah, blah, blah. No, that won't work. I'd really like it. Hmm. Wow. My computer's magically allowing me to offer you a deal. Boom. Now, sometimes it works and sometimes it doesn't. Okay. Every day, I get emails from people who have used the scripts from my book. And some of them get it and some of them don't. If they don't give it to you, that's okay. This is a dance. Sometimes you get it, sometimes you don't. But unless you ask, you'll never know. One of my readers, Charlotte, practiced the script she called her credit card she got. Her APR dropped from 18% to 11%. At her amount of debt, that meant thousands of dollars in savings for her. Another reader, Lila, saved 15 to $25,000 in interest alone. She negotiated her car loans, student loans, and home loans to do this. So if you can negotiate your debt, particularly if you have a lot of debt, that can save you a huge amount. The key here is, is taking control of your finances. Rent, cable bills, Internet, all of it. Instead of simply letting someone tell you how much you owe, you go, fine, I'm going to take control and I'm going to Try my best to negotiate. It probably won't work for everything, but if it works for just a couple of them, it's worth it. Now that you've done the hard work of negotiating your monthly bills, it's time to have some fun. Credit card points. Let's talk about them. They give you thousands of dollars worth of perks. For example, points for free flights, high end hotel stays, cash back, private promotions, car rental insurance, trip cancellation insurance, purchase protection, automatic warranty doubling, and concierge services, although frankly their concierge is mostly suck. Make sure you use your credit card points and the perks. And one of the things you can do is call up your credit card and say, hey, what perks are available through this credit card? For example, my amex Platinum covers New York Times subscription, so I switched the bill over to that credit card. Now, some of your credit card points or perks might expire, some of them might not. But I want you to really think about those again. Do not let perks determine how much you spend on your credit card. That would be extremely stupid. This is like the people I speak to and they go, yeah, you know, I have $17,000 of credit card debt and I keep spending money on it. I go, why are you doing that? They go, so I can get points. Don't you ever spend a dollar to get a penny in points? Don't do it. But if you're debt free, if you're using credit cards wisely, as I describe in chapter one of my book, then you might as well take advantage of the perks. For example, get the extra flight upgrade. Get the hotel that allows you to stay there. It's a nice place. I recently traveled to Europe and India, paid for all those trips with points that probably saved me about $40,000. So we've covered the O part of the CEO strategy. You've optimized your spending by renegotiating your bills and you're taking advantage of the perks as long as you are spending on your credit card wisely. If you follow the CEO approach to save money, you're going to build up your emergency savings, you're going to save for a dream vacation, and you can finally buy something that you've really been wanting to for a long time, guilt free. I'm confident you'll start saving more money than you ever have before. 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