One of time’s tested and true hacks is that to get better at anything, you need to start small. Whether your goal is to save $10,000 or run a 5k, starting in small increments is the only way to attain it. Going from $0 in savings to $1,000 by cutting out everything you normally do each month isn’t sustainable; similarly, you likely can’t jump from the couch to the 5k finish line. But you can start with, say, $100 the first month, and a few laps around your neighborhood.
As I wrote previously, focusing on increasing your savings rate by one percent a year will be easier and more manageable than jumping right to 10 percent, and so on. Consistent small tweaks will get you where you need to go.
How to Improve Your Finances By 1% in 2019
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Ten percent is scary. One percent is manageable. It’s enough to make a difference over time, but small enough that you won’t feel the sting too much year-to-year, assuming you stick to the plan.
But how exactly do you do that? If you’re getting your finances in order in the new year, here are some suggestions to help you improve by one percent, some courtesy of ChooseFi.com:
- Call your credit card company and ask them to waive the annual fee.
- Swap out one bar/restaurant night a month for a cooking night in with friends or some other inexpensive activity.
- Create a baby-sitting club with friends: Each couple can switch off sitter duty of the others’ kids so you can enjoy a cheaper night out.
- Try a booze-free month (good for your health and your wallet).
- Follow Kristin’s 10/10 Rule
- Set up rules on an app like Qapital (say, save one percent of your salary every time direct deposit hits)
- Cut out Amazon, or institute an “Amazon Day,” as M3000P suggests: “To curb my splurging on Amazon, I have a designated day — Thursday — as the only day I can buy. So the rest of the week I throw stuff in the cart but ‘Amazon day’ is the only day I can checkout.”
- Learn a skill you used to pay for (like changing your oil).
- Go through your last credit card statement and see which subscriptions you can cancel.
- “Round out your savings account after every paycheck, just contribute whatever is needed to make the nearest hundred whole (i.e. $178 to $200),” suggests ChooseFi.
- Exercise more. According to a study from Vasilios Kosteas at Cleveland State University, men who exercise frequently earn six percent more on average, while women who exercise frequently earn 10 percent more.
- Index. Your. 401(k). You’ll pay significantly less in fees (and likely benefit from higher returns).
- Shop around for new car insurance. “According to J.D. Power, consumers who switched insurers saved an average of $388 in 2015.”
- Skip the upgrade. Maybe you’re up for a new phone or tablet. Do you really need a new one this year? Consider how much it would inflate your bill each month and keep what you have.
- Abstain from buying new kitchen and bath products until you’ve used up what you have.
- Relatedly, “take a moment to reflect on everything you own. Make it a mental game of trying to make everything you’ve already bought earn their cost. It’ll give you satisfaction and you’ll feel less like you wasted so much money. Additionally you’ll focus less on new things and end up saving money.”
- Ask your boss if it’s possible to work from home one day a week, to save on commuting costs.
- Save every $5 bill you get.
- Stock up on pantry basics, and maybe, finally, get into meal planning.
- Apply $100 extra to the principal amount of your student loan balance.
- Finally open that Roth IRA and put $100 into it.
- Eat more veggies and grains, and less meat. Consider instituting a “meatless Monday.”
- “Gift food or experiences instead of “stuff” and commit to sharing moments, not clutter,” suggests ChooseFi.
And you know some of the more obvious ones: Pick up freelance or a side hustle, cut back on eating out, ask for a raise, etc. There are countless ways to save and earn more money—how will you get to one percent?
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