Savings

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

It's true. If you put the money in savings, then budget off the remaining balance, you won't miss the money. It's also a great idea to automatically add any raises to your savings account. There really is no reason to start spending more money just because you are earning more.

Of course, in my opinion it also better to live BELOW your means rather than at or above it. There is nothing wrong and everything right with being frugal.