Just 1% — Save Money And Never Dip Into Your Savings Ever Again
There’s an old adage that if you want to get ahead in life, you should save 10% of your income. Well, what if 10% of your income is too much for you to save? You save 10% of your income for a few months, you run out of money, and have to dip into your savings to pay a bill or buy groceries.
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The trick to saving money is not using will power. If you’re saving 10% of you income, you may need that 10% to pay a bill or buy groceries. Which means you’ll start dipping into your savings at some point.
Instead of saving 10%, sock away 1% of your total monthly income
Let’s see what that looks like. Let’s say you bring home $3,000 a month. This means you’ll be saving $300 if you save 10%. For some people who have a mortgage, a family, and other monthly expenses, that $300 may be too much to save. At some point, you will feel the need to dip into your savings.
If you’re making $3,000 a month, but you’re only putting 1% of your money into savings, that’s just $30. It’s a minuscule amount, but trying to save more money than you could afford will always bring your savings to $0. If you’re saving just $30 a month, and not even look at your savings account, that account can grow untouched for years.
Until you can live on less or get out (and stay out) of debt, it will be hard to save money. If you can find more money, you can save a portion of it.
Let’s say you have a credit card that you pay $75 a month as a minimum payment. If you paid off that credit card, you could set that amount into savings. If you maintain the mindset that it’s still an “expense”, all you do is put that $75 into your savings account. Now you can save $105 a month.
If you do this with all of your credit cards, you may be able to save $300 a month if you maintain the mindset that the money you paid towards your credit card (which are paid off) is still an expense, but it needs to be paid to savings.
Look For Ways To Make More Money
If you’re thinking about doing overtime, think again. Instead, look for a side hustle. You may have skills, talents, and abilities that can get you paid. Do the research on what it is you need to do to make more money.
For example, let’s say you start writing a book. No, better yet, an eBook. You write a 150-page eBook. You create a social media fan page for the book before you are ready to publish the book on a website. The page gets 100,000 fans. You charge $20 for the eBook. Just 2% of your social media fan page buys the eBook. You make $40,000 off of the eBook. You could actually save half of that and use the rest for whatever you want.
There are plenty of money-making ideas that don’t get utilized, but people don’t try them out due to fear.
I once bought two vending machines and had them making money for about 2 years before the store owner told me they didn’t want them up in their store anymore. I put them in storage and they ended up getting stolen because the storage unit had no security. For those two years I had the machines in that store, I made extra money doing very little work. All I had to do was restock, service the machines when they malfunctioned, and collect the money. However, that experience taught me some very valuable lessons about the vending machine business. Would I get into the vending machine business ever again? I doubt it but if I had better resources (and employees to do the “heavy lifting”) I probably would.
When You Make A Ton Of Money, You Can Actually Live On Just 1% Of Your Income
The idea of living on 1% of your income seems like a crazy idea. If you are making $10 million a year, living on $100,000 is very doable. If you live in a small town, you could probably live on less than $100K.
“I don’t make $10 million a year, that sounds too far fetched”
When it comes to money, don’t have a closed mind. We live in an era where you can make money right from your computer. If I were you, I would look for ways to at least double my income I currently make at my job. So if you make $50K/year right now, do your research on how to make $50K/year online. If you’re able to do that, you could save 50% of your total income until you decide to quit your job and do your online business full-time or at least until you are able to make $100K/year with your online business.
Until then, focus on saving just 1% of your income.