These are the 4 steps I took to save my first $1 million

Personal capital: pcap.rocks/mspham Have you told yourself that you need to save more, but have trouble doing so? In this video, I'm going to help you set up the right system to start saving more. Fidelity recommends having the equivalent of your salary saved by the time that you're 30, four times your salary saved by 40, six times your salary saved by 50 and eight times your salary saved by 60. If you want to retire early, you will need to save 25 to 33 times your annual living expenses. The first step to saving better is to establish a goal to work towards, which will motivate you to prioritize your savings. In the FIRE community, this is often described as your "Why for FI" where FI, or F.I., stands for Financial Independence. Why are you pursuing this goal? There’s a well-established tool that you can use to plan and achieve your goals, which go by the mnemonic SMART. SMART stands for Specific, Measurable, Attainable, Relevant, and Time-Sensitive. Your goal needs to be specific and identify what you want to accomplish and what actions you will take to get there. The more detailed and specific that you can make your goal, the more likely you will achieve it. Next, It needs to be measurable. With money goals, that’s easy to measure since you can track how much money you have saved up over a certain period of time. For A, Achievable, you want to make sure you set a goal that is doable. If it’s too far-fetched, you will get discouraged and give up. For R, you need a goal that is relevant. Make sure your money goal aligns with your life values. Don’t set goals based on what others are doing. Everyone’s on a different journey. Once you figure out your priorities, it will make saving money so much easier. And make sure you write down your goal and post it somewhere that you can see every day. The mere act of writing it out has a powerful effect on driving you towards that goal. When you are tempted to buy something that is a want and not a need, ask yourself if the purchase will help you achieve your goal. You want to get into the habit of running through with any discretionary purchases to make sure that they align with your life values and priorities. The second step is to automate everything so that there is less friction between you and saving. When you automate your savings, you are spending a few minutes to set up your retirement and saving accounts to automatically received funds transferred from your checking account, or where you receive your paycheck. By making saving automatic, you don't have to contend with all the ways that you can be tempted to spend your money. It’s a simple, but powerful way to build your savings so you don't have to manually move money across accounts with each paycheck. Manually moving money takes willpower, something that can be hard to overcome when there are so many ways that you can impulsively spend your money today or so many other fun things to do (like check Facebook or watch Tik Tok videos) than to set up a retirement account or transfer money between your checking account and your saving account. One study found that when employers automatically enrolled their employees in a 401(k) (while still allowing them to opt-out), the employee's contribution rate went up. When you consider the fact that some people weren't even contributing up to the amount that their employers were matching (which is like getting 100% return on your money with no risk), this automation stuff is pretty powerful. You can automate your 401k, your savings account, and Roth IRA accounts to pull money from your paycheck on a specific day of each month, like the day that you receive your paycheck. This is also known as “paying yourself first” before you use any of that paycheck money to pay your bills. By doing this, you are prioritizing your savings. Of course, you want to leave enough money in your checking account to pay for bills, but you will be less tempted to spend money on discretionary things since you can’t see those funds in your account. The important thing is to start, however small, and make it a habit. Next, you want to track your goal. Humans are motivated by feedback. You need to be able to see how you are doing to stay motivated. My favorite free app to track my money and investments is Personal Capital. I really like Personal Capital’s dashboard, which allows you to visually see the growth of your net worth and track your progress. Lastly, saving is easier when you earn more. You need to find a way to make more money, and as you make more money, you want to increase the amount that is automatically withdrawn and deposited into your savings or investment accounts. Ask for a raise or promotion. Look for other jobs to stay competitive and use competing job offers to negotiate a higher salary. Pick up a side hustle, or rent out a room in your house. Music: www.bensound.com Images: www.unsplash.com