Saving more money seems impossible for many of us. We already have so many expenses; where is that extra money going to come from? If you want to make saving a priority, try the “one per cent challenge” to gradually make it happen.
Finance site Afford Anything says we often convince ourselves we can’t afford to save, when that’s not always true. An example: let’s say you plan to visit Grandma for the holidays, but travel is $175 over your budget. Chances are, instead of breaking Grandma’s heart, you find a way to come up with the money. Maybe you take on an extra job, work overtime, cut back, sell some stuff, whatever — the point is, you find a way. Afford Anything explains:
It’s during these moments that you realise: “I really can afford anything. Not everything, but anything. But what if you can avoid these financially stressful situations altogether? What if you save ruthlessly in advance, so that when emergencies crop up, you’re completely chilled out? Every time I advocate this budget hack, someone emails me to say: “I don’t earn enough to start saving. I need every dollar.” Fascinating. You’re telling me that your take-home pay is $2772 per month, and your expenses are exactly $2772 per month? That’s a mathematical impossibility.
Of course, “finding a way” to save an extra two hundred bucks each month is a lot to swallow. To make it easier, they recommend saving just an extra one per cent of your earnings each month. If your after-tax income is $2000 a month, you’ll save $20 in the first month. Find a way to earn that extra $20. Then, next month, increase your savings to two per cent, and so on.
This is similar in nature to the 52-week challenge. But it’s a little more personalised, as it works with your own income. For more detail on Afford Anything’s method, check out their full post.
Take the One Per cent Challenge [Afford Anything]