Start by saving a penny a day. Get over your refusal to create a new account, and make a savings account if you don’t have one.
Baby steps are about developing habits, not about effecting change. A baby step is a habit that’s a seed. You plant that seed by establishing the habit. And your habit is moving money to savings every day.
Or you can do every paycheck if you like. It makes more sense operationally if your money comes in paychecks.
But don’t underestimate the power of doing it daily as part of programming your subconscious.
The fact that it’s one cent makes the amount not matter or affect your current budget. This allows you to cultivate the habit without having to deal with all the temptation that a pile of money creates, not the sacrifices required to actually move that money into savings.
See how long you can go putting 1¢ per day — manually, in your banking app — into the savings account, before the urge to save more starts to arise.
You need to train your subconscious to see saving money as a satisfying way to spend it. To see having $5 of savings as so delicious that it’s worth “spending” $5 on. “Spending” in the sense it’s no longer there ready to spend.
The other thing, the other mental aspect of this, is to assign a job to that savings. Don’t just “save some money”. Save it for something specific.
A buffer is a good thing to save for. A buffer means a reduction in anxiety. It can be a big buffer or a small one. It should be earmarked for something specific that you need, and the purpose is to allow you live without fear of losing that thing you need.
In my case, I keep a $100 buffer that allows me to charge my car. I drive an EV for Uber, and if my bank account is empty I’m screwed in terms of making money because I can’t charge the car and earn.
So to retain the ability to earn money when my checking account is empty, I have a separate bank account that always has $100 in it.
It’s not much. It’s not designed to cover all my expenses. It’s designed to charge my car three times, which in turn allows me to make about $500 by driving Uber. It’s designed to keep my earning system active.
Examples of other hypothetical buffers and their purposes (imaginary; I don’t have these)
$5,000 to cover two months’ mortgage
$200 to cover two weeks’ worth of groceries
$100 to cover three weeks of bus fare to and from work to ensure one more paycheck before one’s dead in the water
$500,000 to cover all living expenses from age 62 to age 90 (this kind of buffer is also called a “retirement”)
Also, you can save for experiences, for investments, etc:
$3,000 for a trip to Cancun
$4,000 for a down payment on a car
$500 for massage therapy licensing fees (you save this up while taking night classes for massage)
Basically, for me at least, it works better to have a specific goal to save for. In my experience a “general fund” that I save into — without a clear vision of what the money’s for — tends to get eaten up by emergencies.
Emergencies seem like magic appearing at exactly the moment you finally have some money saved up, but I think it’s a subconscious thing. You only see things you can interact with, and when you have more cash you can interact with more things. Suddenly an unavoidable catastrophe becomes one that can be avoided for … exactly the balance of your savings account.
To add to this, there are a lot of phone apps to help track the job of all this money without opening accounts. YNAB is the one I’ve used for a decade or more. Super useful.
Start by saving a penny a day. Get over your refusal to create a new account, and make a savings account if you don’t have one.
Baby steps are about developing habits, not about effecting change. A baby step is a habit that’s a seed. You plant that seed by establishing the habit. And your habit is moving money to savings every day.
Or you can do every paycheck if you like. It makes more sense operationally if your money comes in paychecks.
But don’t underestimate the power of doing it daily as part of programming your subconscious.
The fact that it’s one cent makes the amount not matter or affect your current budget. This allows you to cultivate the habit without having to deal with all the temptation that a pile of money creates, not the sacrifices required to actually move that money into savings.
See how long you can go putting 1¢ per day — manually, in your banking app — into the savings account, before the urge to save more starts to arise.
You need to train your subconscious to see saving money as a satisfying way to spend it. To see having $5 of savings as so delicious that it’s worth “spending” $5 on. “Spending” in the sense it’s no longer there ready to spend.
The other thing, the other mental aspect of this, is to assign a job to that savings. Don’t just “save some money”. Save it for something specific.
A buffer is a good thing to save for. A buffer means a reduction in anxiety. It can be a big buffer or a small one. It should be earmarked for something specific that you need, and the purpose is to allow you live without fear of losing that thing you need.
In my case, I keep a $100 buffer that allows me to charge my car. I drive an EV for Uber, and if my bank account is empty I’m screwed in terms of making money because I can’t charge the car and earn.
So to retain the ability to earn money when my checking account is empty, I have a separate bank account that always has $100 in it.
It’s not much. It’s not designed to cover all my expenses. It’s designed to charge my car three times, which in turn allows me to make about $500 by driving Uber. It’s designed to keep my earning system active.
Examples of other hypothetical buffers and their purposes (imaginary; I don’t have these)
Also, you can save for experiences, for investments, etc:
Basically, for me at least, it works better to have a specific goal to save for. In my experience a “general fund” that I save into — without a clear vision of what the money’s for — tends to get eaten up by emergencies.
Emergencies seem like magic appearing at exactly the moment you finally have some money saved up, but I think it’s a subconscious thing. You only see things you can interact with, and when you have more cash you can interact with more things. Suddenly an unavoidable catastrophe becomes one that can be avoided for … exactly the balance of your savings account.
To add to this, there are a lot of phone apps to help track the job of all this money without opening accounts. YNAB is the one I’ve used for a decade or more. Super useful.