5 Powerful Money Moves You Can Make in One Day

5 Money Moves You Can Make in a Single Day (0:00)

Bo: Building wealth is typically the result of doing the right things with your money over a long period of time. But some of the most powerful money moves you will ever make can take less than a day. You do them once and they keep working for you for years. I am so excited because today we’re walking through five powerful money moves that you can make in a single day, and some of these could be worth tens or even hundreds of thousands of dollars over your lifetime. Make sure you stick around for number five, because it’s one we don’t talk about enough, and it might be the most impactful thing that you do all year.

Money Move #1: Automate Your Finances (0:38)

Bo: The first money move is what separates those who actually build wealth from those who never quite get there. And that move is to automate your finances. When it comes to your money, and really any area of your life, you want to make the good habits as easy as possible and the bad habits as hard as possible. Automating your saving and investing is one of the best ways to do that.

Bo: When your 401(k) contribution happens automatically before you ever see the money in your checking account, you’re eliminating behavior from the equation. The smart, wealth-building action happens without you even having to think about it. And you’re taking away your own ability to mess up what you know is a smart choice. So if you haven’t done this already, here’s what you should automate today: your 401(k) contributions through your employer’s payroll system, your Roth IRA contributions through a monthly transfer from your checking account, and your monthly bills to protect your credit score and eliminate late fees.

Money Move #2: Claim Your Full Employer Match (1:32)

Bo: The next money move you can make today is basically just claiming free money. And yet, a shocking number of people are leaving it on the table. I’m talking about getting your employer match. If your employer offers a 401(k) match and you’re not contributing enough to get it, you are literally turning down part of your compensation. That’s money your employer budgeted for you, and you’re not taking it. According to one report, around one-third of employees don’t contribute enough to their 401(k) to get the full company match. That’s what we in the industry like to call no bueno.

Bo: And here’s why. Let’s say your employer matches 100% of your contributions up to 4% of your salary. If you make $60,000 and you’re only contributing 2%, you’re getting a $1,200 match. But if you bumped your contribution to 4%, you would get a $2,400 match. That’s an extra $1,200 per year for free, just sitting there waiting for you to claim it. And remember, that $1,200 doesn’t just sit in your account. It gets invested and it compounds. At a 9% average annual return, $1,200 invested today has the potential to grow to around $15,000 over 30 years.

Bo: So here’s what you do: log into your HR benefits portal, find your 401(k) contribution rate, compare that with your employer’s matching formula, and if you’re not getting the full match, increase your contribution rate. This might take you 10 minutes, but the payoff can be huge. We put the employer match at Step 2 of the Financial Order of Operations for this reason. It’s one of the highest guaranteed rates of return available to anyone. So don’t miss out on it.

Money Move #3: Increase Your Savings Rate (3:12)

Bo: The next money move you can make today might be the most important one, because it can determine whether you retire with millions or don’t retire at all. And that is to increase your savings rate. According to the Federal Reserve, the median retirement account balance for Americans aged 55 to 64 — the people who are about to retire — is only $185,000. Using the 4% rule, that’s only $7,400 a year in retirement income. That’s clearly not going to go very far, and it’s largely the result of savings rates that were too low for too long.

Bo: The benchmark we recommend is 25% of your gross income saved and invested. If you’re not there yet, that’s okay. You don’t have to go from zero to 25 in one day. But even if you can increase your savings rate by just 1%, it can make a six-figure difference. Let’s say you make $70,000 a year and you bump your savings rate up by 1%. That’s an extra $700 per year joining your army of dollar bills that you’ve already got working for you. Over a 30-year timeline at a 9% average rate of return, that single 1% increase has the potential to grow to nearly $100,000. All from a 1% bump. You likely wouldn’t even notice the difference in your paycheck, but over a lifetime, that 1% could be the difference between retiring comfortably and working a lot longer than you wanted to.

Bo: We’ve actually done the math to show what a 1% increase in your savings rate can do based on your age. You can find that in our free resource, What 1% More Can Do for You. Go check it out.

Money Move #4: Eliminate One Recurring Expense (4:51)

Bo: The next one might be the most satisfying money move on the list: eliminate just one recurring expense. Pull out your bank or credit card statement from last month, find a recurring charge that you could live without, and get rid of it. Maybe this is a subscription or some membership that you barely use. I know it sounds simple, and you might think that one subscription is just small potatoes and it won’t make a big difference. But recurring charges are like little money leaks slowly draining your bank account. And that money could be working for you instead of against you.

Bo: Let’s say you cancel a $50-per-month subscription that you forgot you were even paying for. If you redirect that $50 into an account earning 9% per year, after 30 years you’d have almost $90,000 — all from canceling one thing. According to one survey, the average American spends $219 per month on subscriptions, but they estimate they’re only spending $86. In other words, most people are spending more than double what they think they are on subscriptions.

Bo: So here’s your challenge: spend 15 minutes reviewing all of your recurring charges. Pick at least one to cut. Then take the money you were spending on that thing and redirect it to your investment accounts. Plug the leak and put those dollars to work.

Money Move #5: Move Your Cash to a High-Yield Savings Account (6:11)

Bo: The next money move you can make today is another one that can have a six-figure impact over the long run, and that is to move your cash to a high-yield savings account. If you have cash sitting in a traditional savings account, you’re almost certainly earning close to 0% interest on it. At the time of this recording, the national average savings rate for most savings accounts is around 0.41%. Meanwhile, high-yield savings accounts, or HYSAs, are currently paying in the neighborhood of 4% or higher.

Bo: Let me show you what that difference actually looks like. If you have $20,000 in an emergency fund sitting in a traditional savings account earning 0.41%, you’re making about $82 per year. Take that same $20,000 and put it in a high-yield savings account at 4.5%, and now you’re earning $900 a year. That is over $800 a year difference just for making one decision.

Bo: Now, I want to be clear: a high-yield savings account is not an investment account. It’s where you keep your emergency fund and any other short-term cash that you’ll need to access in the next one to three years. This is not your retirement money. We’re talking about money that needs to stay liquid. And if it’s going to sit there anyway, it should at least be earning you something meaningful.

Bo: Setting up a high-yield savings account takes less than 20 minutes, and you can fund it the same day with a transfer from your bank account. And unlike a CD or a money market fund that has restrictions, high-yield savings accounts let you access your money whenever you need it. So if you’ve got cash sitting in a regular savings account right now, or worse, just sitting in your checking account, move it today. This is one of those rare situations where you can get a meaningful payoff for almost zero effort.

Putting It All Together (7:56)

Bo: Just like the other money moves we’ve talked about today, these can be done quickly, they’re relatively simple to execute, and they can make a big difference over time. So I would encourage you to do all of these today. Small decisions now can make a big difference later. And as always, keep building toward your great big beautiful tomorrow.