The Problem with Saving Money

As you know, I'm an advocate for saving money and I think it's highly important I even have tons of content out on just that topic alone

But as my channel grows more and more, I'm starting to see that there's some extremes when it comes to saving money

Some good, some bad. And as each day goes by, I'm finding these two very different extremes of saving money right in front of me

And to be honest, it's gotten to a point where I really can't stop thinking about this one thing

Saving money can actually hurt you. Hey, what's up? My name is Reggie Bryant and this channel is all about personal finance and personal growth so you can better yourself every single day and live life on your own terms

On this channel, I'll talk about saving money, increasing your income, and getting out of debt, as well as several personal growth topics

And I take this all the way back to my own personal experiences to serve as a motivation to you

Let's get into the video. The problem I'm seeing with saving money right now is the exact same problem I saw when I got my first full-time job

The problem with saving money is an ironic one. It's not secure. And I know it's a very bold statement to make, but I mean it

When you get paid, your money goes through a funnel and taxes are taken away before your money even hits your bank account

And that's assuming that you're working a traditional job just like most of us

But then you have your financial obligations like rent, mortgages, utilities, transportation, heat, water, energy, food

Then you have whatever money is left over and that's money that you haven't already spent on things that you don't need

My point being, how much of that money do you think you can truly hold on to on a consistent basis

Let's be honest here. If you cut expenses out of your budget, if you're extremely frugal, if you do any and everything you can in your power to hold on to every single dollar possible

how much money could you truly save at the very maximum at the end of every month

The reason I'm asking you this question is because that's the exact same question I was asking myself at 21 years old

And I asked myself this question on a daily basis. I mean, I couldn't help but ask myself that question because I felt like the more money I made, the more I had to lose

You know what I mean? Like you know that weird feeling you have when you know you're making progress, but then your brain just decides to go into what if mode

That's what my brain was doing, bro. It went straight in to what if mode and it was saying, what if I lose it all

And stuff like that drove me to continuously ask myself questions like, how can I make more money

How can I save more money? How much can I save at the very most every single month

And that question was nothing but trouble because I messed around and found out

For me, the answer was $1,000 a month. And that was where I pretty much capped out on saving money every month

But if I worked extra hard, like really hard and crushed my soul at work doing overtime, I was able to save $1,500 a month

Just to add context to these numbers, this wasn't exactly a common situation

I was earning over $65,000 a year at the age of 21

And when you consider that against the national household income, especially what it was at that time, you'll see that I was bringing in a little more than what the average family was bringing in per household

So you have a 21-year-old who's doing pretty well as far as money goes, right

So now let's do something and let's chop the taxes off of that $65,000 that I was telling you about earlier

So when you break down $65,000 to two paychecks per month and you take the taxes off of it, you're left with about $1,880 per paycheck, which is $3,760 per month

So keep in mind, as I said before, I was saving $1,000 of that $3,760 per month, which is actually pretty good

That's a little less than a third of my monthly paychecks that I was able to save, so it was about 27% that I was able to actually put away into my bank account

Again, not really a common situation because when you consider the 50-30-20 rule of money, it's recommended that you save 20% of your income

And a lot of people struggle with doing that, and there I was saving 27% of my income

So clearly I was doing well. I was at least doing above average as far as money goes and saving money

But you may not have realized there's two problems with what I just said

For one, I said there's a money funnel where taxes are inevitably taken out and then you have bills

And that operates off the mentality of I'm not in control. And look, the whole point of saving money is being in control. You have to take control

And the way you take that control is by having a set percentage in your mind that you know without a doubt you can save every single month without fail

And depending on how your finances are set up, you decide whether you take that percentage from one paycheck in full or if you do half and half

That's how you pay yourself first. You know what? I wasn't doing that because it felt off

You know what I mean? It felt almost irresponsible for me to pay myself first before paying my bills

It's almost like I had this ridiculous idea that if I were to pay myself first, all my other available money would just decide to vanish in the thin air

Ironically, the opposite is true because when you wait to pay yourself after you've paid your bills

that amount of time that goes by from the beginning and end of the month, who knows what you've been buying in between that time

Fast food, a movie, some snacks, a night out. You might have even treated somebody to a night out

I know what goes on, bro. I had to catch myself. I need to stop saying bro

There's women watching my channel now. But by getting into that habit, you're leaving less and less money for yourself at the end of the month

And I know because before I knew that I could save $1,000 a month, I was only putting away $800 a month and I was sitting there wondering where all the money went

Like I would legitimately get upset because I did not know where the money was going

Your boy was looking sick. All because I thought the harmless trips to cookout or Chick-fil-A, which was $5 here, $10 there, wouldn't make a difference

Hey, I wasn't even a big spender, but what I had to realize was the small insignificant purchases that you make over time can make a difference at the end of the month

And that didn't matter if I was getting fast food from McDonald's, a protein shake from the gym, or a Gatorade at the gas station

It all adds up. And when you come to a realization like that, you realize that there's no one to blame but yourself when it comes to your money

And when you see yourself as the one who is accountable for your own actions, you take more ownership and more control

But I get it. When you grow up with friends and family who says stuff like, oh you can afford it

Come on now boy, that ain't nothing but a dollar, you better go ahead and get that. Hey, I'm from the south, that's just how they talk out there

But that's what influences our way of thinking on a very subconscious level

Same thing with going out with friends. The amount of money that you spend on a night out is insignificant to you at first

It's just $10, $20, $30. That's nothing right? Until it's the end of the month and you're scratching your head trying to figure out where all that money went

Trust me, I know how it is. And since we now know that a small amount can add up very quickly, there's another problem

Like I said before, I was able to save $1,000 a month. That's $12,000 a year

Even on the higher end months when I was able to save $1,500. If I was able to do that consistently throughout the entire year, that would only be $18,000 a year that I saved

Either way you look at it, it took me a full 12 months to save up what only took me 4 and a half months to earn

Not to mention the fact that I was being extremely frugal and I was absolutely relentless when it came to saving money

Meaning I absolutely maximized on how much I could save for myself at the end of every month

So even after cutting costs out of my budget, even after working crazy hours of overtime, saying no to nights out with my friends

and after paying myself first, I was still very limited in terms of how much I could save

The problem with saving money is, the amount of time it takes to save the money doesn't add up to how long the money actually lasts

The problem with saving is, the very recommendation of saving $1,000 to start your emergency fund

or having 3-6 months worth of expenses in your savings are taken as law and it gives us the false implication that what we're doing is actually enough

It's not enough. One of the biggest problems with saving is the fact that we honestly think that what we're saving is enough

Let me ask you something. In what world does $1,000 get you out of an emergency

To me, certain car repairs, certain replacements, they're not emergencies. Like, sure they're urgent, sure they're important, but they're not going to have an immediate impact on your life or your livelihood

and it's not threatening either one of those things either. To me, an emergency is losing your job and not having anything to fall back on

$1,000 won't even cover rent. Facts. What I'm telling you is, $1,000 is nothing in the eyes of an emergency

It's not to say that you shouldn't start off with $1,000. It's not to say that that shouldn't be your first milestone

That's not saying any of that. It's not bad to, even if you just have $1,000 in your savings account, it's not to say that that is bad

What I'm saying is, we do not stop there. You don't stop at $1,000

You don't stop at 3-6 months worth of expenses. You don't stop at $20,000, $30,000, $50,000

I don't care how much you have in there, you don't stop adding

Because while all the numbers I just listed can sound like a lot of money, how long does it take for that money to go away just like that

That's what we need to think about. I want you to understand that emergencies have no remorse or convenience about themselves

That's why they're called emergencies. They are completely unpredictable. Like, you can't predict a medical emergency

You probably won't predict your AC or your water heater going out

Because you're too busy, you have obligations. Your focus could be in several different places

You won't predict your pet getting sick out of nowhere. And even though you may be on top of your car maintenance, anything can happen to your car at any given time

I know someone who was on their way to work and as they were driving, a rock rolled off the top of a mountain and perfectly fell on top of her windshield

While she was driving. On the highway. Do you think that she expected that

She didn't expect that. Her car was in perfect condition. She was on top of her car maintenance

Didn't expect that. Literally, it was a natural disaster. I thought she was making it up until she showed me a picture of it

So, a good lesson is to add on to your savings as much as you possibly can and never stop

But I don't want that to get mixed up with you thinking that saving your money is going to get you wealthy

Because that's the third problem. A lot of us are really out here thinking that saving money is going to get us wealthy

I was one of them. And honestly, it's something that I really had to learn the hard way

And I'll never forget. I was talking to one of my old mentors about my financial goals

What I wanted to do and everything. And all he heard was, save, save, save, save, save

And then I'm going to go and do this. And I'm going to save some more. And save, save, save, save, save

And then I'm going to go get promoted. And then I'm going to save some more

And the whole time, he's just looking at me like, Reggie, you could save every single dollar that you make

It's not going to make you wealthy. And I don't know why, but that really woke me up in that moment

Because I was so fixated on saving every dime that I possibly could

That I didn't realize that I didn't really know much about money. Like at 21, all I really knew how to do well was save money

That was it. So he helped me understand that outside of just saving my money, I also needed to be investing my money

And we're not even just talking about 401Ks. We're talking about outside of work

Because I already had a 401K. But even then, I went down the rabbit hole of understanding that saving my money and investing my money separately was still not going to get me wealthy

Because I was only saving a little bit here and there. And I was only investing a little bit here and there

So that money obviously isn't going to compound at an overly fast rate

And by time, I mean 40 plus years. And by consistency, I mean hundreds of dollars a month

Which means if I wanted that money to grow faster. If I wanted to save more money and on a more frequent basis

That means I had to increase my income somehow, someway. Because the combination of increasing your income and saving your money and investing

That is the combination of getting wealthy. And I know you're probably thinking, well Reggie, not everybody wants to get wealthy

You're doing too much. I mean, I don't really need all that in my life

That's true. That's 100% true. But every single human being on planet earth wants to be safe and secure within their finances

And not a single person can argue with me on that. And I'm here to tell you that just saving your money

Or just saving your money and investing a little bit here and there on the side

That's not secure. If you lose it all today and you have nothing to fall back on

What do you have to stand on? Just your savings. How long is that savings going to last

And you know why I made this video? Because of the year of 2020

That's why I made this video. Families and individuals around the entire world found themselves in a financial situation

And they found themselves digging into their savings. Some had enough, some didn't

Some had some money left over, some didn't. Some people still had their jobs when it was all said and done, some didn't

People were starting to physically take out all their money from banks because they were freaking out

People were withdrawing money from their 401ks early because they were freaking out

Or because they had to use that money to pay for their necessities

And this is my exact point. If you were truly saving enough, we wouldn't have had to do any of that

If the world is individuals, like holistically speaking, if the world was saving properly, we wouldn't have had to go to those drastic measures

And not just people, businesses. Businesses have straight up went bankrupt because of 2020

And this will happen to any and everybody who has that false sense of security in their savings that they think they have enough of

With savings, I encourage everybody to think it's never enough. Keep adding, keep adding

Your emergency funds need to have emergency funds. It might be a bit extreme, but it's necessary

Because if you're doing it any other way, if you're just saving $1,000 or if you're just saving 3-6 months of expenses and then you stop, you're doing it incorrectly

You're doing it with the wrong mindset. That is the problem with saving money

I don't care if you have a low income or a high income

The same issues exist inside of both circumstances. For these reasons, you've got to educate yourself and become cold with your money

For these reasons, I'm building courses and programs to help you with your finances

For these reasons, I'm telling you exactly where I messed up at and how I identified the issue and how I fixed it

Because I have and continue to make financial mistakes. And I think that it's important for me to share every bit of that along the way so that you can grow as I grow

Saving money is extremely important, but a lot of us are doing it incorrectly

And unfortunately, by the time we realize it, it's already too late and we've lost

And that's the lesson that a lot of us have had to learn the hard way

That's the video for today. Thank you so much for watching. My name is Reggie Bryant and this channel is all about personal finance and personal growth so you can control you, control your finances, and control your life

Thank you so much for watching. I'll see you in the next video. Stay cold

Transcribed by https://otter.ai