How to Build Wealth from Nothing - Step 6

Automate Savings

Up to now, we’ve covered everything needed to build wealth by tackling our liabilities and expenses.  In Part VI of our series on “How to Build Wealth from Nothing” we’ll discuss how to start a savings plan and automate it for success.  We recommend focusing on this step only after the majority of your debts are paid off (with the exception of mortgages or extremely low-interest debts like 0% lifetime APR auto loans for example).  However, we also recommend having at least $1000 in emergency savings at any given time during Part V of debt paydown.  

From Negative to Positive Net Worth

    Once you have the appropriate debts paid down from Step 5, Step 6 is as simple as taking the money you would have applied to your debts and put it into savings.  Recall from Step 4 on spending discipline the best practice of making a spend reduction goal by a percentage at the beginning of every month.  For example, if you spend $3000 per month and you want to make a reduction of 10%, you would set aside $300 at the beginning of that month and then track your over/under spending throughout the month to make sure you were on track.  Then at the end of the month, you would still have $300 in case you have some last-minute expenses or ideally be able to pay down your debts faster and once all of your debts are paid, that money can be saved.  We recommend setting aside the $300 in this example at the beginning of the month into the savings account itself.  You can always transfer it back if need be but it’s proven to be a more effective accountability measure when the money is not within immediate reach for expenses.  


So where does the “automate” come into play in this manual savings example.  There are many tools that can help automate savings for you, but we have designed Harvest Platform to specifically enable this type of savings pattern.  You simply need to login to your Harvest account, set your spend reduction goal, and the platform will automatically set aside funds at the beginning of each month to a digital wallet or savings account of your choice based on your spend reduction goal.

Save at Least 6 Months of Living Expenses

So how much should you be saving before considering investing?  We recommend automating savings up to the point that you can cover at least 6 months of your monthly expenses.  So if your monthly expenses are $3000, it’s best to save at least $18,000 before starting to invest.  While this amount may seem like a lot it is important to have because it gives you protection in the event of unexpected life circumstances such as a job loss or medical emergency and will help you keep out of additional debt should those circumstances arise.


In Step 7 of “How to Build Wealth from Nothing” we’ll cover where to put your money after your savings goals are met.

Harvest helps increase the net worth of the 99% through artificial intelligence and financial automation. To date, Harvest has refunded over $2M in bank fees and interest charges to its members with the ultimate goal of increasing the net worth of everyday Americans by $1 trillion by 2030. Our platform starts with providing immediate relief through bank fee and interest charge refunds, orients a member's financial health with our proprietary PRO Index, and keeps track of net worth over time aided by our suite of financial tools. Check out our 8-step guide on "How to Build Wealth from Nothing" to get started on increasing your net worth.