Unlocking the Secret to Effortless Savings: Insights from David Mozeika

Insights

According to Forbes, about 28 percent of Americans have less than $1,000 in savings across emergency funds, non-workplace retirement accounts, or investments. Marketplace reports the typical household savings rate at 3.2 percent, suggesting the average household is at risk of a financial crisis if these small cash reservoirs are wiped out.

These statistics also suggest it’s difficult for the average person to build sizable savings, especially when located in high-cost-of-living regions. And that’s before rising inflation. 

David Mozeika, Co-Founder and CEO of Currence, believes optimizing the direction of their cash flow can help individuals change this trajectory and save more over time. Today, his company helps households accumulate savings faster than the national average. 

During an interview on the Wealth Woman podcast, Mozeika offers some insights to help households achieve effortless savings. Our blog explores how these strategies contribute to savings rate optimization and wealth-building.

Why is it Challenging to Build Significant Savings?

Mozeika believes a less-than-four percent savings rate suggests Americans don’t have a savings rate problem, per se. Rather, it’s challenging for most people to save because their “money is flowing in the wrong direction.” 

But why is that?

Poor Spending Habits

One of the main reasons for this trend is a market saturated with conveniences designed to entice consumer spending. For example, subscription-based services have become the norm because they offer customers added convenience, value, and curation. 

If you’re looking to buy groceries on a cold winter day but would rather stay indoors, you can do so by subscribing to a grocery delivery service. Likewise, if you want to watch your favorite TV show or movie on demand, you can choose from popular streaming services like Netflix or Hulu.

Beyond spending on conveniences, many consumers typically allocate large portions of their budget to vacation experiences, their kids’ activities, or financing cars they probably don’t need. With such spending habits, Mozeika believes anyone would struggle to save money and likens the manual effort of saving money to fighting gravity.

How to Restructure Your Cash Management to Save More

Mozeika believes the default order of operations—where someone earns wages through manual labor, spends that earned money, and then “fights gravity” to save it—makes it difficult to realize sizable savings. By restructuring the flow of that same earned money; cash flows into a savings reservoir before it goes into a spending bucket, it’s much easier to adjust to an automatic savings routine.

According to Mozeika, this approach works with gravity rather than fighting it.

Upon deciding how much you need in your checking account to meet your current budget (i.e., your “spending baseline”), you can automatically save more from your income. 

Doing so helps you develop an unconscious saving habit and accumulate savings faster because you’ll put away any additional cash from future income increases towards saving before you spend it. This behavioral shift allows you to choose how and when you use discretionary income without limiting your lifestyle choices. 

Automated Savings Enables Wealth Building 

By structuring your money management to save before you spend, Mozeika believes you can reach a much higher savings rate than the four percent American average, ultimately creating more opportunities to build wealth. 

For instance, a four percent savings rate means someone making $100,000 annually saves $4,000. If that person maintains that same cash management structure even after receiving a $4,000 raise, their effective savings rate will be eight percent based on the additional $4,000 they put away. Assuming that earned income keeps increasing over several years, that individual will dramatically increase the amount of cash available to invest.

As income increases due to promotions or children transitioning from daycare to full-time school, an automated savings structure captures that difference and creates wiggle room for individuals to plan their futures. 

Through his company, Mozeika’s team helped a couple save $140,000 and pay off $30,000 in credit card debt within 18 months. Although they started saving just $10 at the start, they significantly boosted their savings rate after getting close to an $80,000 increase in income. Now, these individuals can choose whether to invest in a vacation home or put the additional cash flow toward other suitable investments.

Strategies like those David Mozeika describes can help individuals save more, regardless of how much cash they earn monthly. It all starts with knowing how and where to start. 

And that’s where the team of financial advisors at Tomoro comes in.

Financial Advice for Optimized Savings with Tomoro

At Tomoro, we understand that everyone’s situation is different. Whether you’re a high-income earner currently supporting a growing family or have wiggle room to save additional discretionary income, we can help you optimize how much you put toward your desired monthly savings goals. 

Our financial advice is tailored to your unique needs. Our expert financial advisors design simple, powerful cash flow optimization and wealth-building strategies to identify where you can save more income than you currently do. 

Contact us to learn more about saving more, effortlessly.