The blog request I receive most often is suggestions on saving money / spending less.
That’s encouraging, since the most common financial ailment I see is people who have the “income rich, savings poor” disease.
The first step to recovery is realizing you have a problem.
So for the next few weeks, I’ll focus on writing simple, easy-to-implement tricks to get on the path of true wealth, which is not how much you make, but how much you have.
Right now, log into your 401k and increase your savings rate by 5%. If you’re contributing 5%, then increase it to 10%. If you’re at 10%, increase it to 15%. And don’t worry if they match or not.
If you’re already maxing out your 401k (good for you!), then log into your bank account and create an automatic transfer from your checking to your savings that’s 5% of your monthly income.
After you increase your savings, let it ride for 3 months. I bet you won’t feel it at all.
If I’m right and you don’t feel it, then bump it up another 5%. Let that ride for 3 months.
Rinse and repeat until you finally start dipping into your emergency fund to make up for all the money you’re saving. (A good problem to have!) Then just dial it back a little.
Once you get there you’ve found your savings sweet spot.