How To Double Your Savings In 2025

Summary

The video presents three strategies for doubling a savings rate and building invested savings over time: focus on major expenses, automate savings, and give compound growth time to work.

Framework and recommendations

1. Calculate your starting savings rate

   • Add up monthly savings across retirement contributions, emergency-fund deposits, and other money set aside.
   • Divide that amount by gross monthly income—before taxes and payroll deductions—and multiply by 100.
   • The video’s target is a 25% savings rate of gross income.

2. Prioritize large expenses (“don’t major in the minors”)

   • The video identifies housing, transportation, and food as the largest expense categories, citing a 2024 Bureau of Labor Statistics report.
   • Housing averages nearly one-third of income. The hosts suggest aiming for no more than 25% of gross income where feasible. House hacking or getting roommates are offered as ways to reduce costs.
   • Transportation averages 17% of American spending, according to the video. Its “238” car-buying guideline recommends keeping car payments to 8% or less of gross income. Fuel and maintenance bring total transportation costs to roughly 10% or less.
   • The video cites car payments above $750 per month and average financing terms of 68 months as signs of costly vehicle choices. A more modest vehicle could free up an estimated $300–$500 per month for saving and investing.
   • Paying cash for a car is presented as the best option when possible, though the video acknowledges it may not be feasible for everyone.
   • For example, on $4,000 per month of income, a payment equal to 17% would be $680, compared with $320 at 8%—a difference of $360 per month. Making up that difference with $5 coffees would require cutting 72 coffees.
   • The hosts do not dismiss small spending cuts, but recommend addressing large expenses first.

3. Create “forced scarcity” through automatic saving

   • Save before spending by using payroll retirement contributions and automatic transfers to a high-yield savings account or investment accounts such as a Roth IRA.
   • The premise is that spending adjusts to the money left available.
   • The video says the average American saves about 4% of income, citing FRED, compared with the hosts’ recommended 25% gross-income savings rate.
   • It also cites a Scientific American study finding that people were four times more likely to commit to saving $5 a day than $150 a month. Reframing a target—for example, as $17 per day rather than $500 per paycheck—may make it feel more manageable.
   • Increase automated contributions gradually, monthly, quarterly, or annually.

4. Stay consistent and give investments time to compound

   • The Rule of 72 estimates how long it takes an investment to double by dividing 72 by the expected annual return. At a hypothetical 10% annual return, the estimate is 7.2 years.
   • At a hypothetical 8% return, $10,000 would take about 9 years to grow to $20,000 without further contributions.
   • In the video’s example, someone earning $4,000 per month and investing 25% ($1,000 per month) could grow an initial $10,000 to $20,000 in a little over 9 months. Starting with $100,000, the same contributions are projected to bring the balance to $200,000 in just under 5 years.
   • These examples illustrate the combined effect of contributions and compounding. The stated returns are assumptions, not guarantees.

Assets and instruments mentioned

• Retirement accounts, including Roth IRAs
• High-yield savings accounts and emergency-fund cash reserves
• Investments generally; no specific stocks, ETFs, bonds, cryptocurrencies, or commodities are named
• Consumer spending categories: housing, transportation, and food
• Vehicle examples: a Corolla and a Toyota Land Cruiser

Cautions and disclosures

• Housing-cost reductions may not be feasible for everyone, and the video recognizes that location affects housing expenses.
• Paying cash for a car is recommended if possible, but the hosts note it may not be realistic in every situation.
• Investment-return examples are hypothetical; no returns are guaranteed.
• No explicit “not financial advice” disclaimer appears in the supplied subtitles.

Presenters and sources

The presenter is not identified by name in the supplied subtitles. The video is from The Money Guy Show. Sources referenced in the subtitles include the Bureau of Labor Statistics, FRED, and a Scientific American study.