Save Small, Save Often

Ramit drew up a clever graph to explain why you can’t keep your long-term savings goals.

You’re trying too hard.

Instead of eating only dry pasta for a month, try this. After you get your paycheck, immediately put 10 percent in your savings. Do whatever you want with the rest. If ten percent is too high, try five. Maybe next month when you realize you can still buy all the Pokemon cards you need, you can bump it up.

As Ramit points out, extreme changes usually aren’t sustainable. “When I make a change, I almost always make the most incremental change of all and work iteratively from there,” he writes. Merlin Mann says something similar in one of his podcasts, referring to habits as strands of silver thread. The more you do something, the strands multiple and become a stronger rope.

Ergo, it’s more important how much you do something rather than how much you do of it. So if you’re having trouble getting started on a savings plan, save small, and save often. — BEN POPKEN
Set smaller goals: impress friends, get girls, lose weight [I Will Teach You To Be Rich]

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  1. ediebeale says:

    If you can get Bank of America, do, and sign up for keep the change…it rounds your debit charges up to a full dollar and puts the change difference in your savings account (example: I buy a CD for $10.80; it takes 11 bucks out of my checking account, putting 20 cents in my savings). I save 20-30 bucks a month without even trying! They also have free checking with direct deposit…

  2. alicetheowl says:

    I find his comparison to weight loss and diets quite apt, actually. I’ve been making small lifestyle changes, and my last several visits to my doctor have shown that I’m steadily losing a pound every week – even over the holidays.

    This sounds like good advice.

  3. acambras says:

    I agree with alicetheowl. I too have been making small incremental changes in my diet and exercise routines. While the accompanying weight loss is also small and incremental, I feel confident that I will be able to keep it off because I’m slowly making changes that are sustainable in the long term.

    Just like the other day — I was thinking about the positive steps I’ve taken toward better financial health. I made a list and came up with 16 of them — some quite significant. Those changes didn’t happen overnight, though — they’ve happened over the past few years. (And several of them have come about as a direct result of my reading the Consumerist!)

  4. AtomikB says:

    If you have direct deposit, a lot of the time you can divide it between accounts. For example, you can tell it to put the first $800 of your paycheck into checking, and the rest into savings. If your expenses are basically fixed every month, you’ll soon forget all about that remainder, and the savings will pile up.

  5. Papa K says:

    I’ve had an automatic deduction to my ING account for this reason – I never notice the money is gone when I check my account, and it’s nice to see that ING account growing ever steady…

    And also true on the diet – I’ve been making small life style choices and reaping the benefits for the past few months.

  6. RandomHookup says:

    Okay, acambras, you are now assigned to write a post entitled “How Consumerist Changed my Life.”

  7. brilliantmistake says:

    I’ve noticed it’s a lot harder to save now that I’m doing more consulting and less work with a regular paycheck. My yearly income is about the same (although it was a lot lower for a while), but the rate at which it comes in is highly variable- very feast or famine. If it’s been famine for a while, any big check that comes in gets put towards debt/business expenses from the period where cash just wasn’t flowing. It’s getting better, but its taking me longer to adjust and get my financial management under control than I thought, a far cry from when I could sock away a dependable amount every month.

  8. acambras says:

    @Random Hookup

    LOL — really, they didn’t even pay me to say all that stuff! :-)

  9. asherchang says:

    my budget shall always have room for pokemon cards.

  10. grkgus says:

    Last year i made more then 50 grand and did not save anything. Since november until now i saved 8,000 dollars. By doing a 300 dollar a paycheck deduction to my ING direct as well as putting extra money from paycheck to paycheck i have managed to save a lot, well for me at least. Like other have said, when you dont see it in you checking you dont spend it and use only what you have. I NEVER WITHDRAW from savings.