Securing Your Future: Maximizing the 20% Savings

by JoAnna Billete, CPA

Introduction
Saving isn’t just about hitting a target—it’s about creating opportunities for financial security and freedom. In this article, we explore how to maximize the 20% savings portion of your budget. From automating savings to tackling debt, we’ll share actionable strategies, tools, and mindset shifts to help you build a future that excites you.

Why the 20% Savings Rule Is Your Financial Superpower

The 20% rule isn’t just a guideline—it’s the cornerstone of financial success. Here’s what it can help you achieve:

Emergency Fund: Be prepared for unexpected expenses like car repairs or medical bills.
Faster Debt Payoff: Save on interest by crushing high-interest debts sooner.
Future Investments: Think retirement funds, real estate, or a dream business.
Guilt-Free Treats: Yes, savings can include treating yourself responsibly!

Pro Tip: Automate your savings. Set up direct transfers to a high-yield savings account to grow your money while you focus on other goals.

Visualizing the 50/30/20 Breakdown

To see how the 20% savings fits into your budget, here’s a breakdown of the 50/30/20 rule:

Category	Percentage	Examples
Needs	50%	Rent, groceries, insurance
Wants	30%	Dining out, hobbies, streaming
Savings	20%	Emergency fund, investments

Watch the Episode

Prefer to dive deeper through video? Watch this episode of Deep Dives, where we explore how to maximize your 20% savings and secure your financial future:

📺 Watch on YouTube

Tackling High-Interest Debt

High-interest debt, like credit cards, can drain your finances. Prioritize paying it off as part of your 20% allocation.

Strategies to Try:

Debt Avalanche: Pay off high-interest debts first for long-term savings.
Debt Snowball: Start with the smallest debts for quick wins to boost motivation.

Real-Life Example:
Mike had a $10,000 credit card balance with a 25% APR. By using the avalanche method, he saved $1,500 in interest compared to minimum payments.

Pro Tip: Automating extra payments to your debt can help you stay consistent and avoid missing opportunities to save on interest.

Top Tools to Make Saving Effortless

Budgeting Apps:
- YNAB (You Need a Budget): A supportive community and detailed tracking features.
- SoFi: Includes “vaults” for saving toward specific goals like a wedding or vacation.
High-Yield Savings Accounts: Earn more with competitive interest rates to grow your money faster.
Spreadsheets: For those who prefer manual tracking and full customization.

Pro Tip: Experiment with different tools until you find the one that fits your style.

Mindset Matters: Rewriting Your Money Script

Saving isn’t just about what you do—it’s about how you think. Your “money script,” or subconscious beliefs about money, plays a big role in your financial decisions.

Discovering Your Money Script:

Reflect on your earliest money memories—what did you learn from your family or culture?
Identify limiting beliefs, like “money is always tight.”
Challenge these beliefs and focus on abundance and long-term possibilities.

Quick Activity: Journal about your money fears and aspirations. Are they based on facts or assumptions?

Shifting from Sacrifice to Empowerment

Saving shouldn’t feel like deprivation. Reframe your mindset to focus on what you’re gaining:

Financial Security: A safety net for emergencies.
Freedom: The ability to pursue dreams or retire early.
Confidence: Pride in building good habits and achieving goals.

Example Shift:
Instead of saying, “I can’t buy that,” tell yourself, “I’m saving for something even better.”

Clear Goals Keep You Motivated

Specific goals make savings purposeful. Whether it’s a dream vacation or early retirement, having a clear destination keeps you on track.

Celebrate Small Wins:
Reward yourself for milestones, like hitting your first $1,000 in savings. Choose rewards that align with your goals to maintain progress.

Listen to the Episode

Prefer to listen on the go? Tune in to the full episode:

🎧 Listen on Spotify

Final Thoughts

Maximizing your 20% savings is about more than numbers—it’s about building a system that empowers you to achieve your goals. By automating savings, tackling debt, and shifting your mindset, you’ll create a future that excites you.

What are you saving for right now? Share your goals in the comments below—we’d love to cheer you on!