"No matter how much you make or where it comes from, save 50% of everything."
|Photo Credit Julie de Waroquier|
That right there is the best financial advice I've ever gotten. However, living up to it is harder than it looks. I recently got my first job (part-time, entry-level), and of course, there's the bills.
Me and my husband still live with his mom, and we want to get our own place. We want to get a car. I'm going to college next year (hopefully). These things cost a lot of money, money I'm not going to find in my small paychecks.
We can't take out a loan, and even if we could we don't want to.
So instead, I'm doing the 50% Project. It starts today, with my most recent paycheck. And the goal is simple - save 50% of every penny that enters my wallet. Don't let my expenses exceed my means.
Eventually, I'll have enough to open a savings account. And then accomplish those goals I mentioned above.
So how will the project work? If you want to join in, here's what I'm doing:
- Put away 50% of all income, whether it's from work or gifts.
- Make it as difficult as possible to spend the money you're saving, so you're less likely to spend it. This can be putting it in a locked savings account, or just giving it to a more responsible spouse to keep safe. Safety deposit boxes work well, and old fashioned piggy banks are good too.
- Keep track of how much money is coming in, how much is going out, and where it's going. I do this in a small, portable notebook. I save all my receipts, organized in little envelopes by month.
- Every once in a while I'll post an update here on the blog of what I've managed to save, and a glance at where my money went, and any suggestions I have or lessons I've learned.
- Daily motivating myself by looking at my bank account statement as it grows with every penny saved.
- Doing Christmas for as little money as I can possibly manage. I'm hand-making gifts, writing letters and mailing photos instead of buying gift cards, using leftover cards from previous years, and making Christmas Eve phone calls to the distant but precious family. I'm only buying gifts for 3 people, and I'm keeping it under $20 each.
- Staying accountable - I promised my husband that I'm going to stick to this, and now I'm promising you.
- Stay positive - if I mess up, I'm not going to beat myself up. I'm going to keep moving forward, and so should you.
What do I hope to accomplish with this project?
- A small savings to help me and my husband accomplish our goals.
- Develop self-discipline and better money-managing skills.
- Learn to live minimally.
- Stay out of debt.
- Be financially independent of others (not needing to rely on help from family or welfare).
When will the project end?
For me, I'm going to wait to end the project until I reach my goal of $4,000 in a locked savings account. However, if you're participating in this project, too, you can do it until whenever you feel like. If that's for only 1 month as an experiment, or until you have the $400 for your new PlayStation 4, so be it.
But it's Christmas.
I am very aware that it's December, the hardest month for almost anyone to save. But I also believe that it's the perfect time to test this, to try and stretch the limits of our self-control and practice delayed-gratification. For more information on a minimalist Christmas, I highly suggest this post over at Zen Habits. Christmas doesn't have to cost you.
I wish all of you luck with your own financial journeys, thanks for sticking around to read about mine.