What EVERYONE Needs To Do With Their Money ASAP

What's up you guys, it's Graham here.

So I want to begin this video on a very serious note. As many businesses and cities begin to shut down, cease operations, close schools, cut hours, and inevitably begin laying off workers, it's really more important than ever right now that you put your health and safety first, and the health and safety of everyone else around you. To make sure you keep your hands washed, you stay inside, and you don't put anyone at risk.

And secondly, what is most likely going to be going along with that is a lot of financial difficulty for a lot of people who don't know where else to turn. So even though we want to believe that now's a great time to buy and everything is on sale – we're getting such good deals – that will not be the case if you lose your job, burn through your emergency fund while everything is shut down, and then have nothing left to fall back on.

And that is something I feel really needs to be addressed in this video, especially as a financial channel here on YouTube. I feel like it's not only my responsibility to talk about the best places to invest your money but also how to protect it and make sure you put yourself in the best financial position possible to come out of this okay, with food on the table and a shelter over your head. Because honestly, at the end of the day, your own well-being and safety, and the safety of those around you, is the most important – way more than investment returns or even smashing the like button for the YouTube algorithm.

So with that in mind, here's what you could be doing with your money right now: how to best protect it from market fluctuations, and the best ways that you can help stay afloat during a time of massive economic unknowns.

And we're gonna begin with this right here: first, I would say the most important thing you could do right now, beyond anything else, is to buy more toilet paper. Just kidding! The best thing you could really be doing right now is to reduce your spending. This is something that I've been saying non-stop here in the channel throughout the last three years, regardless of what happens with the stock market or with your job, but especially now this is more important than ever.

That's because the more money you save right now, the more money you're gonna have left over, which means less money that you'll need to make to keep up with your overhead. And the more money that you'll hopefully have left over to invest with. So if you're brand new to this and want to know exactly what you need to do step-by-step from start to finish, here's what I recommend: first, you should immediately go and sign up for one of these budgeting software's like mint.com or personalcapital.com.

You could also use a paid program like You Need A Budget. It's basically a website like if you took mint.com and personalcapital.com, combined them, put them on steroids, and then left you with the looming feeling that despite how much money you're saving, you could still probably save a little bit more money. That's pretty much how it feels to use You Need A Budget.

Anyway, no matter what personal finance budget tracker you want to use, this is pretty much gonna be your Holy Grail for the next few months. And this is where things start getting real. That is because, second, you're gonna link all of your accounts and then review all of your spending throughout the last 60 days.

Some people may need to open a bottle of wine as they go and do this because I guarantee it's gonna be a lot more than what you would expect. Seriously, a lot of us are gonna have a whole bunch of small unnecessary expenses that just fell through the cracks, so being able to go and look through these expenses is going to help you identify what those are. And then you could put them in one of these two categories.

Part one is going to be your mandatory spending. This is going to be the bare minimum amount that you will need to live on, regardless of what else happens. This could be your housing payment, your health insurance payments, your minimum food budget, and so on. These are meant to be the charges that are non-negotiable that you have to pay every single month and you can't possibly live without – like homemade iced coffee.

Then next, part two is going to be your discretionary spending. This is everything you want to have but don't necessarily need to have. Like do you need to go and spend $100 a month for HBO Sports? Do you have to spend $100 a week eating out at restaurants? Do you have to go buy shoes every day? Do you have to go and smash the like button for the YouTube algorithm? Which the answer to that is actually yes, you do need to do that! No. My recommendation is that you go through the last 60 days and then itemize every single thing you didn't absolutely need to buy, and then you're gonna do the unthinkable – and you're gonna add up how much that was.

So here's a challenge for you: I'm going to be watching the comments, and if you post how much you think you spent in discretionary spending over the last two months, I'm gonna go ahead and give it a heart. Then go and add up how much you actually spent and then respond back to your own comment. Here's the thing: I nearly guarantee you're gonna end up saving a few hundred dollars a month just from this single experiment if you actually go and do it.

So if you want to save a few hundred dollars a month, that is a very easy, low-effort way for you to do that. Next, part three, I want you to be able to cut back on all non-essential discretionary spending that you know you could live without. To me, it's a little like going on a personal finance diet, except this is a diet that's gonna help get you in better shape financially. Yes, see what I did there?

Now just like with any diet, the key to this is consistency. And even though being housebound with a whole bunch of stuff closing down around you is probably gonna help save you some money in the short term, it's unlikely to lead to a long-lasting change. So I would say the best way to go and implement this is to immediately cut back on any subscription services you don't absolutely need, and then monitor your spending daily on mint.com, personalcapital.com, or You Need A Budget to make sure you're staying on track.

It's almost like logging exercises in a gym, except instead of going and curling weights, you're bulking up your bank accounts. Then part four, you want to save the difference. Doing this is all about identifying what you don't absolutely need, cutting back on what doesn't matter, and then saving the difference for where it matters the most. The last two months of your spending is going to reveal a lot about your unconscious spending habits, and the first phase of being able to save more money during turbulent times is to recognize those charges and then cut back as much as you possibly can.

Then we can go on to the second point of the video, which I'm going to do right over here, right now. Second, it's really important that you save the difference. Once you've cut back on all your unnecessary expenses, you're gonna want to do something with all of that money that you have left over. So here's what I recommend: the first most important use of your money right now is to build up your emergency fund. This is gonna be your insurance policy in the event you lose your job, can't afford to keep up with your mandatory expenses, don't want to sell your investments at a loss, and need something to fall back on.

Well, this is it! Wait until your emergency fund should last you between three and six months. Although, if you work in an industry that's highly affected by what's going on right now, that I cannot mention here on YouTube for risk of getting demonetized, then I would recommend you beef up your emergency fund a little bit more – maybe closer to nine months, if at all possible.

Now, in terms of where to put your emergency fund, you're gonna want to put it somewhere safe, somewhere liquid, and preferably somewhere that pays you just a little bit of interest, and for that, we have the almighty high-interest savings account.

No, I have tried pretty much every single high-interest savings account in existence: from PNC Bank, Discover, Amex, Wealthfront, Robinhood, Ally Bank... what else? HSBC, there are so many to list. And even though this place doesn't offer the highest interest rate out there, for me, this has by far been the best in terms of customer service, and that would be Ally Bank.

Here's the thing: there are a lot of different banks out there that you could go to, but in terms of customer service and actually reaching a live human being on the phone, no place that I have ever used has beat Ally Bank. I've even had seven figures in cash sitting in other banks doing their whole private banking experience, and their customer service is worse than what I get at Ally Bank with let's say ten thousand in the account.

So even though you might end up making a little bit less in interest, the whole experience of Ally Bank, in my opinion, more than makes up for it. No, even though a lot of these rates are probably gonna end up going down soon, at the very least, you could rest assured that your money is gonna stay safe and it's not going to be prone to any fluctuations in market price, and you're also gonna make a little bit of interest during the time that you have your money sitting there.

The second, in addition to this, if you want a slightly better return and don't need access to your money immediately, you can also look into a CD, which stands for Certificate of Deposit. It's basically just a savings account with a fixed date of withdrawal. Most CDs that you'll see have terms of one to five years, which means you'll lock up your money for that length of time.

So if you're the type where you know you're not gonna be needing that money for a specified length of time, then this could actually be a pretty good option. Plus, some CDs actually offer you some pretty flexible terms. Like Ally Bank offers you an 11-month CD with no penalties in the event you need to withdraw your money soon. This could be a fantastic option for anyone who wants to protect themselves from lowering interest rates, who also wants to lock their money in right now at a rate that's guaranteed not to change.

Like I just loaded up on a whole bunch of these penalty-free 11-month CDs at 1.75% for my emergency fund, and all I did is just stagger them in rates of $25,000 each. So for anyone else who wants to do this, I mean this could be a pretty good option. But again, I’ll typically only recommend this if you're pretty confident you're not going to need the money within the next year. Because otherwise, if you take the money out sooner, you'll have to pay a small fee.

Really, the entire point of this step is just to keep your money easily accessible, liquid, and stable at a time where you might need it the most. This is not meant to be money that you invest in the markets; this is not meant to be money where you're trying to maximize the return of every single dollar. But just consider this like an insurance policy where it's there for you if you really need it.

And to better help losses, this is something else I recommend you could be doing to protect your money, and that would be this right here: third, you'll need to do your best to keep your job, take on side hustles, and to continue working if at all possible. Right now, I really believe that you should do everything you can to go above and beyond with your work, maintain the best relationship you can with your boss and with your coworkers, and make yourself as indispensable as possible.

I don't think it's unreasonable to think that there might be a lot of layoffs should this continue to get worse, businesses shut down, and employers can't meet payroll. So if that happens, you really want to make sure you've solidified your position within the company as best as you could. That is also the time to take on additional work if you can, just to give yourself a little bit more of a buffer in the event that prices go down, things get worse, and you need more money to fall back on.

Even for myself, looking back, I do regret not having worked even harder from 2009 to 2013 and taking on a few more clients just so I could have made a little bit more money and taken advantage of lower prices. Obviously, hindsight is 20/20, but having gone through that experience really gives me such a wide perspective that money earned at a time like this is really, really valuable.

And even though we don't know when things will recover, having more money available during a time like this is never a bad thing. I've even gone on Facebook and started seeing friends driving for Uber Eats and Grubhub, and they're making a ton of money right now doing food delivery. So if you have an interest right now, just doubling down in your work – whatever money you are in right now is gonna be worth a lot more in the future because, in a way, having more money come in is gonna be just as helpful in protecting the money you currently have.

And also, I just want to throw this in here: if you currently have any high-interest rate debt, like credit card debt, now is the time to pay that off so you don't accrue even more interest and make the situation worse than it needs to be. What a dump! So this here's my thinking: going and paying down a 20% interest credit card is the exact same as you making 20% on your money.

So paying down any high-interest rate debt like this is going to be a phenomenal use of any extra money you have coming in. And even in the event you pay down the card but then you end up needing some money in the future, you could always put your spending back on the card if you absolutely need to – as crunchy as that is for me to ever say. But at least this way you're reducing your debt, you're reducing your overhead, you're saving a lot of money in interest payments, and in the worst possible case scenario, you still have those credit lines available to you if you absolutely need it.

And if you don't ever end up needing it, then at least you've saved a lot of money on high interest by paying it off as soon as possible. And fourth, because the stock market is acting as unpredictable and wild as Jessica from Love is Blind, and because we don't know exactly how long this is gonna last and how much of this panic and fear is priced into the market, once you've made sure that you're safe, your loved ones are safe, you've kept your job, you have an emergency fund, and you maximize how much money you're making and saving, then you should begin consistently investing back into the markets.

So here's the thing: I realize that if the market goes down over the next few weeks, people are gonna come and tell me, "What Graham, the market's way down, you were wrong! You should stick with real estate, stop giving stock market advice, you were wrong!" And hey, you know what? There's honestly a good chance that will happen.

But I gotta say from experience, if I say this and the market goes up, then you have a whole bunch of comments from people saying, "WOW, Graham called it, he was totally right! We shouldn't be trying to time the markets; we should just buy and consistently because all of a sudden the market went up 9% today, he was right!"

So all I'm getting at is this: no one knows what the stock market is gonna be doing. No one knows how much panic and fear is already priced in; no one knows if the market is gonna suddenly go up 10% tomorrow or down 10% tomorrow. We can all make a guess on what we think is gonna happen, but really, at the end of the day, it's just a guess.

So I would really say our best chance at making money long-term over the next three to ten years is just to consistently buy into the market, regardless of what you hear on the news headlines. And that's it! Some days you're certainly gonna lose money, and other days are certainly gonna make money, but long-term you should come out okay.

And that will really be the point where you're gonna be happy that you invested, you're gonna be happy that you double down on your work, you're gonna be happy that you cut back on everything you didn't need to spend money on, and you're also gonna be happy that you put your safety first.

The first would be a Roth IRA, and this allows you to contribute $6,000 per year within the account, and any money you earn within the account is going to be completely tax-free by the age of 59 and a half. Now the reason I like this so much is because in a way, it could almost double as your emergency fund. That's because any contributions made to this account can be withdrawn at any time without any penalty.

So if you invest $6,000 within the account and then you realize a few months later you need that money to pay for something, well no problem! You can withdraw it from the account. However, the downside is that once you take your money out of the account, there are stringent stipulations in place about whether or not you can put the money back in the account, and you're only allowed to withdraw your contributions from the account, not your profit.

So if you invest $6,000 in the account and then it turns into $8,000, well that extra $2,000 in profit needs to stay within the account; otherwise, you pay a 10% penalty and are responsible for paying taxes on it, which no one likes and is not fun at all.

So really, consider this a great option to double your emergency fund and to be able to invest at the same time. Second, you should also look into contributing to a 401k account as well. This is another retirement account that you invest pre-tax money into, and then you begin paying taxes on the money once you begin withdrawing it from the account at the age of 59 and a half.

This is also another great way to save on taxes because, for example, if you contribute $500 a month to a 401k, you're gonna be taxed as though you made $500 less in your paycheck. This saves you a lot of money up front, allowing you more money left over to go and invest with.

Now from my perspective, the 401k makes a lot of sense if your employer offers what's called a 401k match. This is when they will match your contribution dollar for dollar, up to a certain amount. The rule of thumb when doing this is that you should always do it, no matter what. Just take the 401k match; at minimum, you should always invest whatever you need to do to get the 401k match, and never $1 less.

Because really, when it comes down to it, when they're matching you dollar for dollar, that's like you're just doubling your money for pretty much no risk whatsoever! So you may as well just do it.

And third, with all of the health concerns recently, you should really be looking into investing and opening up what's called an HSA, which stands for Health Savings Account. This is really one of the best-known secrets out there, even though it's not really a secret; it's just not a lot of people talk about it. When it comes to this, there are some qualifications that you must follow, and for that, I recommend just a quick Google search to determine whether or not you're gonna be eligible.

But assuming you qualify for an HSA, you're gonna be able to contribute up to $3,500 per year, completely tax-free, into this account. Now this account is used to pay for any out-of-pocket medical expenses or charges that you might incur. And if you don't use it one year, that's totally fine – it rolls over again to the next year.

Now this is really great because, in my opinion, it really makes it one of the best tax-advantaged accounts in the world. Because first, you don't get taxed with any money you contribute to the account, so that becomes tax-free. And second, you don't get taxed on any of the money you spend on health-related expenses, so that also becomes completely tax-free.

It's basically like you're getting completely tax-free money that you're never gonna have to pay taxes on when you use it towards medical expenses, which inevitably, at some point or another, we're all going to have medical costs. So again, this is pretty much no reason for you not to go and do something like this, and I highly recommend it.

As far as what you should be investing in to protect your money within these accounts, here are a few ideas: One is obviously going to be cash. This is basically going to be the money you have sitting on the sidelines to take advantage of any buying opportunities that might come up. I'm not gonna be one of these fear-mongering people telling you to go all cash and then wait for the bottom because really, no one knows when that is.

But I do think it's a smart, conservative move to keep some cash tucked away on the sidelines just in case you might need it. Second, I'm also going to be recommending the typical index funds. Now, for anyone who is not aware, what an index fund is, it's basically a portfolio of certain investments that you could buy into, and then you own a small fractional percentage of everything.

Historically, an investment like this over the last 100 years, through all the ups and downs, has given about a 7.5% return adjusted for inflation, with dividends reinvested. This is the reason why Warren Buffett suggested that the majority of investors out there just place 10% of their income in cash and the other 90% in a low-cost S&P 500 index fund like this one. Long-term, it's going to remain a lot more stable than going and picking individual stocks.

Third, you could also mix in a bond index fund as well within your portfolio, like this one: Vivid Flex. This should see a lot less volatility than stocks, it should remain fairly stable, and you'll be able to get a slightly higher yield than you'll see in a high-interest savings account.

And fourth, I'm sure some people want me to throw gold into the mix in this one, so I'll mention gold. Typically, this is used as a hedge against inflation and a store of value during economic uncertainty, like what we're seeing today. However, I might get some flak for saying this, but I'm just not a fan of investing in gold long-term.

But I believe if you really want a hedge against any sort of crazy post-apocalyptic scenario, you're probably best off with like ammo, pharmaceuticals, canned food, tobacco, alcohol, stuff like this. It's probably gonna be way more useful. And fifth, I'm just gonna say it again because it is really more important than ever right now that you keep an emergency fund in cash at all times.

To me, this is really just as important to your own well-being in terms of keeping a roof over your head, keeping fed, keeping your family safe, keeping yourself safe, and everything else that goes along with that. Even though when the economy is going great, people think the emergency fund is just a waste of time, that you don't really need to do it, it's times like these where your emergency fund is really like your insurance policy for anything that might come up.

That's why I really believe the best way to protect your money right now is to, first of all, stay safe, stay employed, do your best to double down and make as much money as possible, cut back on any unnecessary spending, and of course, save the difference as much as possible. So that way, you come out ahead of this on the other end completely unscathed and completely safe.

So with that said, you guys, thank you so much for watching. I really appreciate it. If you guys have not already subscribed, make sure to subscribe, hit the notification bell, hit the like button. Make sure to add me on Instagram; I post there pretty much daily. So if you want to be a part of it there, feel free to add me there as well.

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