Getting into the habit of saving if you haven’t started is a serious psychological hurdle. To help ease into it, start saving half of any money you can count as “extra.”
As personal finance blog Budgets Are Sexy points out, any money considered “extra” isn’t something you’re likely to miss. If your bills are paid and you’re well fed, the leftovers are likely going to go towards something you don’t necessarily need. The impulse to buy things you want is what keeps you from saving to begin with. However, if you only save half of your extra money, you can scratch that itch a bit while still preparing for the future:
It’s called the ‘Save 50% of all your EXTRA money’ pill, and once you take it you can’t stop. Similar to saving 50% of all your income — which is often cited as ‘not possible’ and ‘why the hell would you want to do that??’ — this one gets you started by concentrating on all the extra money that comes in outside of your regular income. And since it’s all ‘extra,’ you won’t miss it!
Over time, you can grow how much you save and adjust your lifestyle as needed. Maybe you’ll discover that having a solid emergency fund is more worthwhile than going to the movies every week. Or maybe saving in the short term will make it easier for you to adjust your lifestyle to increase your savings later. Either way, if you’re not saving, giving yourself a gateway drug will do you more good than forcing yourself into a savings plan you can’t handle right away.
The Gateway Drug to Extreme Savings [Budgets Are Sexy]