Yahoo Finance Frugal Living YouTuber Kate Kaden: 5 Money-Saving Tips for 2024
A recent poll found that 22% of U.S. adults have zero emergency savings. This is one of the highest percentages of non-savers in the poll’s history.
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Whether you have no savings or just wish you had a little more, there are steps you can take in 2024 to make it happen. YouTuber Kate Kaden is an expert on frugal living who regularly publishes videos designed to help the average person improve their financial wellness.
Here are her five tips for accumulating more savings in 2024.
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Save 10% of Take-Home Pay
Kaden says your first step should be to save 10% of your take-home pay. But don’t only save when you feel good financially. Make your 10% savings goal non-negotiable.
Warren Buffet says the same thing. He advises that you pay yourself first, saying: “Do not save what is left after spending, but spend what is left after saving.”
As of 2024, the average U.S. salary is $63,795. After taxes, you should take home over $4,000 per month — and potentially more, depending on how heavily your state taxes income. That means the average U.S. adult should aim to save around $400 monthly based on Kaden’s recommendation. If you can do that for a year, you’ll end up with $4,800 in savings.
If you want to save more than that in the next 12 months, Kaden says you’ll need a personalized plan to get there. This may mean cutting some expenses or looking for a new side hustle, such as driving for Uber or turning a hobby into a business.
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Stockpile One Month of Expenses
As you begin to save 10% of your take-home pay, Kaden says your first goal should be to stockpile one month of expenses in your checking account. Doing so will help you deal with unexpected expenses without interrupting your savings plan.
The average U.S. household spends around $5,111 per month. That can feel like a lot if you’re just starting to save.
Dave Ramsey has a solution. He advises beginning this process by creating a $1,000 starter emergency fund. Once you reach that milestone, you can then start working toward Kaden’s recommended stockpile of one month’s expenses.
Note that some experts, including Ramsey, say you should eventually try to have three to six months of expenses in an emergency fund. However, every financial situation is unique. It’s OK if it takes some time to get there, as financial wellness is a lifelong pursuit.
Curate a Supportive Network
Kaden’s next tip is to surround yourself with the right kind of people. If you only spend time with friends who go out and waste money every weekend, you’ll be much likelier to do the same.
Instead, focus on relationships with people who share your financial goals. Eventually, you’ll create a social network that reinforces your savings goals, instead of detracting from them.
Research suggests the average American person spends $18,000 per year on nonessential goods and services. It’s really hard to do that while making progress toward your savings goals unless you have an above-average income.
Some nonessential spending is fine. You don’t want to live like a pauper to reach your financial goals. But keep it in check and always remember to pay yourself first. The right social network can make putting your financial health first much easier.
Focus On Solutions
Kaden’s next piece of advice is to start focusing on solutions — not problems. In other words, you need a healthy mindset to stay on track with your financial goals.
Sure, it’s easy to get discouraged when things aren’t going your way financially. But you can’t let bad breaks make you throw in the towel and give up on saving. We all have bad months. If you allow them to change your financial philosophy, it’ll be tough to build wealth.
Kaden recommends reading a book on this subject called “Everything Is Figureoutable” by Marie Forleo. She says it can help you retrain your brain to think more creatively and positively in the face of setbacks. That way, you can continue making progress toward your financial goals no matter what the future brings.
Avoid Debt at All Costs
Kaden’s last tip is to avoid debt at all costs. She shares that opinion with other popular financial experts, including Dave Ramsey.
Debt payments eat into your budget without giving you any present-day value. They’re sort of like monthly payments for past spending that exceeded your means. There’s rarely a good reason to take on that burden.
Despite that, the average American now has $23,317 in non-mortgage debt. This debt comes from various sources, including credit cards, various types of student and auto loans, and personal debt.
Some financial experts recommend paying off all consumer debt before investing or creating a full emergency fund. Doing so will ensure you pay as little interest on the amount you owe as possible, decreasing the overall amount you have to pay off. If you’re looking for more guidance in this area, Kaden recommends reading a book called “The Simple Path to Wealth” by JL Collins.
As you research, note that some financial experts believe certain types of debt are OK. For example, Rich Dad’s Robert Kiyosaki uses debt to finance real estate purchases, which provide him with rental income. However, this is a specific case and doesn’t equate to taking on consumer debt for unnecessary purchases that provide you with no future value.
Saving money is one of the foundations of financial wellness. Do it consistently, and you’ll build wealth over time while also protecting yourself from unexpected expenses that could otherwise disrupt your life.
Kaden’s recommendations for saving more in 2024 are a great place to start your savings journey. But remember, every financial situation is different. Your ideal savings plan may not fit perfectly with Kaden’s advice.
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