I’m a Financial Expert: 7 Ways I Save Differently Than My Friends and Relatives
Written by
Cindy Lamothe
Edited by
Amber Barkley
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Have you ever wondered how financial experts go about saving compared to the average person? What kind of money hacks they use to build up their wealth?
GOBankingRates spoke with Abid Salahi, finance expert and co-founder of FinlyWealth, and Melanie Musson, finance expert with Insurance Providers, to learn more about how they save differently from their friends and family.
For one, they save more, said Musson. “We spend our time telling others to save, and the advice starts to stick in our own lives. We save more than the average person because we make saving a priority.”
Read below for more ways they save differently. Also, find out some overlooked strategies for saving money.
We Take Advantage of CD Ladders for Emergency Savings
Certificates of deposit (CDs) aren’t always decent savings options, said Musson. “Sometimes, it’s just as good to keep savings in high-yield savings, but with higher interest rates, a CD ladder keeps emergency assets available on a rotating schedule.”
To create a CD ladder, invest in several CDs with varying term lengths — for example, one year, two years, three years, etc. — and, each time a CD matures, reinvest it in the longest term. This allows you to take advantage of the higher interest rates many longer-term CDs offer, but with better liquidity, in case you need the funds. You can choose to have terms that mature every few months to allow for the greatest access.
We Save for Retirement
“Everyone knows they should be saving for retirement,” said Musson, “but the majority of people aren’t saving enough.”
As a financial expert, she follows her own advice and prioritizes her future.
We Prioritize High-Yield Investments Over Traditional Savings Accounts
“My savings approach stands apart from my friends and family in several significant ways,” said Salahi. “I prioritize high-yield investments over traditional savings accounts. While my relatives keep their money in standard savings accounts earning 0.01% interest, I maintain only a two-month emergency fund in cash.”
He said the rest goes into Series I Savings Bonds, which yield 5.27%. “This strategy earned me an additional $2,750 in interest last year compared to a traditional savings account.”
We Have Savvy Credit Card Strategies
“My credit card strategy sets me apart, too,” said Salahi. “I studied the spending patterns of 100 friends and family members through my work at Finly Credit Cards Finder.”
He found that most people use one or two credit cards. “I strategically use five different cards, each optimized for specific spending categories.”
He said this approach has earned him $4,200 in cash back last year, while the average person in his circle earned only $340.
We Automate Everything but Review Manually
Another difference, according to Salahi, is that he automates everything but reviews manually.
“My sister spends hours each month manually paying bills and moving money to savings,” he explained. “I’ve automated 95% of my financial life but spend 30 minutes every Sunday reviewing transactions and adjusting strategies.”
He said this saved him 96 hours last year while catching $890 in billing errors that his automated systems flagged for review.
We Think Differently About Savings Rates
“Most of my friends follow the standard ‘save 20% of income’ rule. Instead, I use a variable savings rate tied to market conditions,” Salahi said. “When markets drop 10% or more, I increase my savings rate by 5%. This strategy helped me buy more investments at lower prices during the 2022 market downturn, leading to a 31% better return than my fixed-rate saving peers.”
We Have a Different Approach to Windfalls
“The biggest difference might be my approach to windfalls,” said Salahi. “When my cousin received a $5,000 bonus, she immediately spent it on a vacation.”
When he receives extra money, he splits it using his 40-30-30 rule: 40% to long-term investments, 30% to short-term savings goals and 30% to current lifestyle improvements.
“This system helped me build a $127,000 investment portfolio by the age of 35,” he said.
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