The Savings Strategy That Will Help You Start Putting Way More Cash Away
If there’s one thing us money bloggers love more than money, it’s the chase of the money. And during this chase, we like to get into quite a few shenanigans, which according to the outside world, seem pretty ridiculous.
We do things such as:
- Cutting our cable
- Selling all our crap
- Going on No Spend months
- Moving into tiny homes, trailers, and yurts
- Striving for early retirement at 30 years old
- Paying off every ounce of our debt (*gasp*)
- Taking up dozens of side hustles
- And one of our favorites: Saving 50%-75% of our income
But as sexy as these money solutions are, they’re not always doable for a lot of people, often because of personal preference, or the current financial stage they’re in. So for those who prefer not to go the ~extreme~ routes, I looked for the savings gateway drug that will get us hooked and moving in the right direction. And today’s drug is the one that gets you closer to extreme savings.
It’s called the “Save 50% of all your EXTRA money” pill, and once you take it you can’t stop.
Similar to saving 50% of all your income (which is often cited as “not possible” and “why the hell would you want to do that??”), this savings strategy gets you started by concentrating on all the extra money that comes in, outside of your regular income. This includes things like raises, bonuses, birthday cash, and any other random money you come across in your daily life.
This strategy does a few things:
- Gets the savings ball rolling once and for all.
- Frees up money to spend without feeling bad! (i.e., the other 50% of your extra income that you aren’t saving)
- Let’s you keep your lifestyle the same until you’re ready to push it.
And the beauty is that it’s all “extra,” so you won’t even miss it! The important part is making sure to transfer this 50% of your extra income to a separate place, though, so you can start watching it grow. A while ago, I put away “Challenge Everything” money which ended up saving me $5,484.07 after a year of stashing away cash. In fact, my Challenge Everything savings is a great real-life case study on how this savings gateway drug could work for you. For a year, I worked to cut my down bills, sold my extra stuff, and put away any extra money I found. Here’s the breakdown of the $5k I managed to save:
Cell phone savings: $1,350.96
Cable/internet/phone savings: $785. 69
Car insurance savings: $367.08
Stuff sold: $1,027.67
Change found on ground: $22.67
Random money: $1,930.00
The “extra money” categories in this example are “stuff sold,” “change found on the ground,” and “random money.” For me, random money included gift money, medical reimbursements, tax refunds, and even an out-of-the-blue lawsuit check that found its way to us (thanks, Toyota!). That means my “extra money savings” came out to $2,980.34.
Now in a perfect world, you’d bank all of the cash if you could, but following this 50% rule, I still would have been looking at a very solid $1,490.17, or roughly $125/month. So as you can see, this strategy is a win-win all around, and it gives you a nice “rule” to follow as well. Then when you’re all hooked up and addicted, you increase the dosage and inch closer to the more “extreme” routes of saving 50% or more of your total *income.* Sounds crazy at first, but not after you’ve gotten a sweet taste of savings.
Give it a shot and see how it goes! This is one drug your mom would approve of. And PS: “Saving” can mean investing or paying off debts too, by the way. You should be putting this 50% of your extra money away for whatever main goal you’re shooting for.
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