One Percent at a Time

One of the goals of Savvy Living is to: Save 20% and spend the rest with abandon.

Keeping in mind that the average savings rate in the U.S. shifts from 3.7% - 4.9% getting to that 20% goal may feel like an overwhelming task... but it can be achieved! The trick is to get there 1% at a time.First of all, if you're only saving 1% - 3% of your salary, congratulate yourself for saving anything at all. At least you're in the habit of saving. Now, it's time to take it to the next level.Start, by taking a look at your last paycheck and calculating how much 1% equates to. For example, if your paycheck is $2,000, 1% of that paycheck is just $20.Now ask yourself, if you set up an automatic transfer of $20 from your checking account to your savings account each payday, will you really miss that money? If you can still put gas in your car and food on the table, set up the transaction right now.The next step is to put a note in your calendar for two months from now to see if you can bump up your savings amount by another 1%. In fact, make it a habit to check in every other month to see if you can increase your savings amount.Initially, your contributions will feel small, but you will have the opportunity to build on success and your savings will grow.Don't wait for the magical day that you can start saving 20% all at once. That day is not going to come. There will always be something to distract you from your goal... especially when that goal is to start saving $400 all at once.Even if it takes you 2 -4 years to get to that 20% goal, you will get there... and have had 2-4 year’s worth of savings built up along the way.