Hey, How'd your safety net setup go? Good. Alright, just as a reminder, if you haven't created your budget, or you haven't set up your safety net account, stop this video and go back to complete those two modules. This weak step is completely dependent on having those two done. But don't worry, once you've gotten those done, you can still access this week's class so that you can move forward. No problem, it's important to work at your own pace.

All right, by now you've gotten real with yourself and gotten clear on your monthly budget, and you've set up your little safety net account. With these two very important steps completed, you're well on your way to building up that financial stability you've been looking for. In just a few short months, you're going to not only get the hang of your new routine, you'll start to See that these two organizational tools have helped take that money that you already make and stretch it further. Now, this is where you get to play a little bit. Once you've gotten to the place where you're seeing a bit of surplus leftover in your safety net account, after you've transferred your monthly budget allotment on the first of the month to your checking account, okay, you can do one of two things. You can either leave it in there and watch your pile of money grow in that little linked savings account.

Or you can make a little interest on it while it sits quietly and split it into specific categories. All right. The reason I would choose the second option, and why I'll be showing you how to do it in just a second is having that big unclaimed pile of cash can be a problem. It's why the safety net account technique works in the first place. Right? All right.

So picture, plate of food, our eyes tend to be Bigger than our stomachs, right? If you have a full plate, you're most likely going to eat what's in front of you until you're full? I do. But you can trick yourself into eating less by eating off of a full salad or side plate instead of a full sized entree plate, your eyes still see a full plate, your tummy satisfied with an appropriate portion of food, and you'll have leftovers to last at least another meal. So when when, right, the same principle goes for money. Okay?

So when you have that pile of money, it's hard to figure out how to spend or save appropriately. A lot of people will see a pile of money and think I paid my bills this month. I've got some leftover so I'm going to go spend it and then there's no money left when it comes time to pay bills. And then the next month, you're always behind the eight ball because the money hasn't been properly portioned out right. So this next step will help you learn how to properly portion that money. So You'll always have money to cover your monthly expenses, while also having money to set aside for specific things without having to jeopardize what you have spent this time building.

Right. Sounds good. Alright, let's get started. For this part, I want you to look into opening a high yield savings account with a bank that offers the option to split your accounts into several different ones must also be able to link to your checking account so that you can transfer funds easily to each account. That high yield is going to give you more interest for that money that's sitting there. For instance, I have an online high yield account with synchrony bank, they have one of the higher interest rates on savings, and it's really easy to set up.

So be sure to do your research to find the best bank for you and your needs. But if you want you can click on the link below and it'll take you right to synchrony bank if you want to check them out. Once you've set up your account, it's time to figure out your savings categories. You're gonna want to create separate accounts under this umbrella of your main high yield account for your different savings categories. They can be things like an emergency account, travel account, fun, money, taxes, whatever you want. This way, if you want to go on a trip, you can deplete that specific account, and then your other accounts stay untouched and growing really nicely.

Only use what you need when you need it. Once you're all set up with your separate accounts, decide what percentage of your surplus money will go into each account. Okay, so if you were to break down 100% of your surplus money at the end of every month into four accounts like emergency house, travel, whatever it is, you're probably going to want to choose 25% for each for each of the categories, whatever percentage that you want, baby On priority if you have more than those accounts. So say you have eight separate accounts, but you want 50% to go into the house downpayment fund to build up faster, you can put 5% into your fun money account for that once in a while fun indulgence. Got it. On the first of the month, you'll be doing your usual monthly budget transfer from your linked savings account to your linked checking account.

If you have any surplus over and above the money you transferred for your monthly allotment, then you're going to transfer this surplus into your separate external savings account based on the percentage that you've allotted for each. So let's say you have $1,000 leftover on the first of the month after transferring your monthly budget. Then take that and split that up into your separate high yield savings category accounts. You may or may not have a surplus every month, however every time you do, it's a great way to portion it out so that you can start to amass savings for all the different things you eventually want to do or buy or pay off. All right, typically, you want to leave your external high yield savings account alone, so that it can grow. However, there are always going to be unforeseen expenses.

And that's what these types of accounts are good for. Right? So let's say you need to pay for a plane ticket, transfer that money from your travel savings to your checking account. So it doesn't affect your monthly budget allotment or any other of your savings accounts. The holidays coming up, transfer funds from your home fund or your miscellaneous savings account. And then that way it's going to cover your gift shopping and leave your monthly budget alone, while the other accounts stay nice and plump.

Well, this isn't gonna happen overnight. After a few cycles, you're not only going to get the hang of your new stuff. systems, but you're also going to love sticking to your budget so that you can watch your savings grow over time. And the more you stay on your monthly budget, the more you're going to save, you'll have a little padding right? So have fun setting up your external high yield accounts this week, and I will see you next week with the final module. You're almost there.