Financial influencer Humphrey Yang proposes a method to double savings in a single year, cutting through typical “skip the latte” advice. His strategy focuses on tackling major expenses, not minor habits, to accelerate emergency fund growth, vacation savings, or down payment accumulation. This approach is particularly relevant now as many households struggle with inflation and stagnant wage growth.
Step 1: Leverage Negotiation Power with Your Landlord
Yang’s first tactic involves aggressive rent negotiation. He recently secured a discount on a new apartment by offering a longer lease, capitalizing on landlord preference for stability. He also negotiated free rent during winter, a slow rental period.
This works because landlords, like any seller, respond to incentives. In competitive markets, they’ll offer concessions to secure tenants. Similarly, swapping amenities (parking for rent reduction) or simply bargaining can yield savings. Fidelity recommends timing negotiations with lease renewals for maximum leverage.
Step 2: Cut Transportation and Insurance Costs
Insurance and transportation are major budget drains. Yang suggests shopping for better car insurance rates or bundling policies for discounts. Even a simple phone call to competitors can save $300–$500 annually. Consumer Reports data shows 30% of drivers switch insurers to save, averaging $461 per year.
Carpooling or public transit can further reduce costs. These savings aren’t just about money; they’re about time and reducing dependence on volatile expenses like gas prices.
Step 3: Reverse Budgeting: Pay Yourself First
Yang advocates reverse budgeting: prioritizing savings before expenses. If your income is $4,500 and you want to save $500, set that aside immediately. The remaining $4,000 covers bills. This forces discipline.
To make it work, analyze three months of spending. Fluctuations exist, so a wider data set provides a more accurate average. Identifying wasteful spending allows for realistic budgeting.
Step 4: Aim for Aggressive Savings: 20% Is the Baseline
Most advice recommends saving 10%. Yang pushes for 20%. This isn’t just arbitrary; it accelerates wealth accumulation. FRED data shows the US personal savings rate is lower, making 20% ambitious but achievable. Even falling short (15%) is still significant.
The “shoot for the moon” mentality lowers intimidation. Incremental progress compounds over time.
Step 5: Break Down Goals Into Manageable Chunks
Doubling last year’s savings feels impossible if viewed as one large sum. Yang uses an example: saving $7,500 becomes $625 monthly or $156 weekly. Smaller milestones reduce overwhelm. This leverages the psychological power of micro-goals.
Step 6: Create a “Vault” Account for Strict Discipline
Yang’s final step: isolate savings in a separate, difficult-to-access account. Use an unfamiliar password, choose a different bank, and treat it like a locked treasure chest. This minimizes impulsive spending.
The goal isn’t just to save; it’s to protect those savings from casual access.
In conclusion: doubling savings requires confronting major spending categories – housing, transportation, insurance – instead of relying on minor cuts. Yang’s approach isn’t about deprivation; it’s about maximizing efficiency and discipline. The key is to prioritize savings aggressively, break down goals, and create psychological barriers against impulsive spending.
