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December 17, 2014Written By Paula Pant

Take the One Percent Challenge

cute kitten needs money - click Display Images to see thisPop quiz: You’re buying airline tickets to visit grandma for the holidays. She lives on the other side of the nation, too far away to drive.

You’ve budgeted $400 for holiday travel, but you can’t find airfare for less than $575.

What do you do?

a) Tell grandma she’ll have to spend Christmas alone.

b) Spend it. You’ll claw the money from somewhere else — maybe you’ll cut back on restaurants or skip your spring vacation.

This is just a hunch, but I’m willing to bet that most people pick Option B.

Next question: Your adorable kitten (or puppy) needs an emergency life-saving procedure. It’ll cost $400. You don’t have a dime in savings.

What do you do?

a) Kill the kitten!

b) Spend it. You’ll figure out some way to come up with the money before the end of the month, even if it means mowing lawns, shoveling snow, teaching guitar, picking up freelance work, or selling the junk that’s piled up in your garage.

I’m certain you’ve picked Option B. (In fact, some of you are probably offended that this is even a question. Who would chose Option A?!)

What’s the common thread between these two scenarios? Ruthless prioritization. If something is important enough, you grit your teeth, furrow your eyebrows, and find a way to make it happen. It’s during these moments that you realize: “I really can afford anything. Not everything, but anything.”

But what if you can avoid these financially stressful situations altogether? What if you save ruthlessly in advance, so that when emergencies crop up, you’re completely chilled out?

Yank Your Savings from the Top; Go Wild with the Rest

I’m a massive advocate of the easiest, laziest, more awesome budget hack: Yank your savings from the top and go wild with the rest.

Here’s how it works:

  • You get paid. (Yippee!)
  • You instantly pull your savings from the top. Set up automatic transfers into a combination of savings, investment and retirement accounts.
  • Force yourself to live on whatever is leftover.

No tracking pennies, no scrutinizing receipts. No brainpower whatsoever. (Which is why I like it. Hey-o!)

Health and fitness bloggers advocate various types of diets — paleo, primal, vegan, raw food, wheat belly, whatever — based on the idea that if you’re eating the “right” foods, like vegetables, you don’t need to bother tracking calories. You won’t gain belly fat by binging on broccoli and brussels sprouts, and counting calories is a chore that has low long-term adherence.

minimalist success

In other words: If you want to give yourself the best chance of success, make a plan that’s as easy as possible.

Take a minimalist approach. Swallow — as Tim Ferris says — the “minimum effective dose;” the smallest dose needed to gain results.

This budgeting hack is the equivalent of not counting calories. It’s impossible to overspend if you’ve pulled your savings off the top first.** And since those savings are tucked away somewhere safe, you can run wild with the rest of your money, guilt-free.

It’s the anti-budget: the budget for people who hate budgets.

“But I Can’t Save!” and Other Limiting Beliefs

Every time I advocate this budget hack, someone emails me to say:

“I don’t earn enough to start saving. I need every dollar.”

Fascinating. You’re telling me that your take-home pay is $2,772 per month, and your expenses are exactly $2,772 per month? That’s a mathematical impossibility.

“Actually, it’s a mathematical improbability.”

Whatever.

“I can’t save” is a limiting belief – a false belief you acquire through negative influences. Once you adopt and internalize this belief, it becomes true — until you let go of the belief.

Examples:

  • “I’m bad at running.” (I was the slowest runner in 4th grade. As a result, I continue to believe I’m a terrible runner — and because of this ridiculous limiting belief, I avoid running, creating a self-fulfilling prophecy.)
  • “I’m bad at sports.” (Ditto.)
  • “I’m bad at computers.” (I’m probably good with computers. But I continue to believe I suck because I didn’t learn DOS commands in the 1990’s.)

Likewise, “I can’t save” is a mental block, not a logistical one. If you lack confidence in your ability to be resourceful, committed and creative, you might adopt the belief that you can’t save. This is a psychological barrier, not a mathematical one.

The best way to break this barrier is by proving to yourself that you have this innate ability. And the most effective way to do this is one step at a time — or, in this case, one percent at a time.

Here’s my challenge to you:

Starting today, save an additional one percent of your earnings.

If you normally save nothing, save one percent. If you already save 5 percent of your paycheck, save 6 percent. If you currently save 10 percent, save 11.

“How much is that?”

Lop off the last two digits of your monthly income. If your after-tax income is:

“I don’t know how much I currently save.”

Don’t worry about that. Just save one percent more. Do you know what you earn? Then check out the chart, figure out the value of one percent, and shovel that much more to the side.

Set up an automatic transfer that directly puts that money into a high-interest savings account.

Adjust to this lifestyle for a month. You’ll hardly feel a difference.

Okay, ready for the next step?

During Month #2, increase your savings by another one percent. In Month #3, add an additional one percent. Within a year, you’ll be saving an extra 12 percent of your paycheck.

Take the one percent challenge to save money next year

Taking the plunge from 0 to 12 percent overnight is tough. Taking baby steps — one percent per month — makes it much easier.

“What if I don’t know how much I earn?”

As an entrepreneur, I have no clue what I’ll earn next year. My income fluctuates every month, sometimes quite dramatically.

Don’t worry. Just pick a number.

You can use:

  • The amount you earned last year
  • The amount you think you’ll earn this year
  • Some other number entirely.

Don’t get too caught up in making it perfect — just pick a number and get started. “Done” is better than “perfect.”

So let’s gear up for the One Percent Challenge: the easiest possible way to boost your savings by 12 percent within a year. Are you in? Throw me — and your fellow rebels — a comment below.

Kickstart your savings goals by taking the one percent challenge. You just have to find a way to save one percent each month. Join in with other rebels!
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Posted in: Personal Finance 101Tagged in: how to save more money, one percent challenge, savings challenge

62 Comments
Leave a Comment
  1. Rich

    # December 17, 2014 at 6:08 pm

    Great challenge, and a great process to get there! I’m excited to see the results!

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:25 am

      Thanks Rich! 🙂

      Reply ↓
  2. Laura

    # December 17, 2014 at 6:15 pm

    That’s a great idea! I thought I had a good hold on my finances, but having reviewed them I just realised that while my earnings have gone up, my savings have been static. I wasn’t looking forward to trawling through the budget to figure out where I was bleeding money, but upping my savings by 1% should show me where my stress points are. Cheers!

    Reply ↓
  3. Lucas

    # December 17, 2014 at 6:48 pm

    Hi Paula,

    Nice one. For extra power, do the anti-budget (take your savings off the top) first, then budget with what’s left.

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:22 am

      @Lucas – Heck yes!! 🙂

      Reply ↓
  4. Apples

    # December 17, 2014 at 7:47 pm

    I made a budget for 2015 that includes a 1% increase in savings rate while we are planning for 4% decrease in income. I was feeling pretty proud of us for meeting all of our needs and wants and still managing to increase savings with a smaller income. And now you’re making me want to join this challenge, just when I was getting comfortable! Well we already have January covered; we’ll have to see if we can hustle for some more money to save or cut expenses further throughout the year in order to keep up with this challenge!

    Also, please mention this in posts throughout the year to help us remember!

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:22 am

      @Apples — That’s great! I’ll definitely keep talking about this in posts throughout 2015.

      Reply ↓
  5. Petrish @ Debt Free Martini

    # December 17, 2014 at 10:07 pm

    This is a great challenge. I also think that going up 1 percent will not break a lot of peoples backs. Its amazing how much money that will add up too at the end of the year.

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:21 am

      @Petrish – Exactly. 🙂 Most people won’t “feel” 1 percent, since it’s such a small amount … and the cumulative effect of those savings over time will be substantial.

      Reply ↓
  6. Larry

    # December 17, 2014 at 10:59 pm

    A lot of what you’ve written in this article sounds like a derivative
    of what Dave Ramsey has been saying / writing / teaching for years.

    Not sure your really offering any new insights. But I do like reading your article’s.

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:20 am

      @Larry – Dave Ramsey advises taking seven steps: 1) Create a $1000 emergency fund; 2) Pay off debt using Debt Snowball; 3) Create a 3-6 month emergency fund; 4) Invest 15% in IRA and 401k; 5) Create college fund; 6) Pay off mortgage; 7) Build wealth and give to charity.

      How is the 1 Percent Challenge — a challenge to grow your savings by 1 percent per month — anything at all like Dave’s plan?

      Reply ↓
      • Larry

        # January 8, 2015 at 10:33 pm

        It has the very same approach Dave Ramsey teaches, taking baby steps to gain financial freedom. With your approach being more of a micro baby step which is a good approach.

        Reply ↓
        • Larry

          # January 8, 2015 at 10:52 pm

          Additionally, this paragraph seems to be an offshoot again of what Dave Ramsey teaches; “Live like no one else now so later you can ‘live’ like no one else” and have true financial peace.

          What’s the common thread between these two scenarios? Ruthless prioritization. If something is important enough, you grit your teeth, furrow your eyebrows, and find a way to make it happen. It’s during these moments that you realize: “I really can afford anything. Not everything, but anything.”

          Reply ↓
          • Daniel

            # May 9, 2016 at 8:46 pm

            Dave Ramsey didn’t invent those concepts either. Both Paula and Dave are simply presenting saving and investing concepts in a different package

            Reply ↓
            • David @ VapeHabitat

              # July 23, 2018 at 10:46 am

              My answers are: b, a (sometimes not having money doesn’t mean you kill someone)

              Reply ↓
  7. Sahil

    # December 18, 2014 at 12:52 am

    You have great ideas and you are great at expressing them. I am always excited to read your new blog posts!

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:21 am

      Thank you Sahil!

      Reply ↓
  8. Ladia

    # December 18, 2014 at 3:54 am

    Thanks for kicking me up to increasing my saving rate. This autumn my wife started paying school meals for our three sons instead of me. I should take these money out of my reach immediately and did not, so it is done now thanks your article. My problem is that I do save something but usually there are no savings in long term because of some unexpected bill comes every year. Car repair, annual electricity bill, broken sewage and money are gone. I know that these are exactly reasons why you make these savings but anyway I feel that I should make some equity. In short term I succeed but in long term, my saving ability is rather poor. I should send it more far from my reach. Saving account is not enough.

    Reply ↓
    • Afford Anything

      # December 18, 2014 at 9:28 am

      @Ladia – Please take the One Percent Challenge and keep this community informed about your progress throughout the next year! I think that boosting your savings to 12 percent might really help you escape your current situation. And if you take the challenge, you’ll be at that spot within a year! 🙂

      Reply ↓
  9. Mrs. Frugalwoods

    # December 18, 2014 at 6:33 am

    Nice. Great idea! I don’t budget either. We just approach every month with the attitude that we’ll spend as little as possible and save the majority (our frugal autopilot, if you will). I like your idea of a challenge–fun!

    Also, I actually would pick option A for visiting grandma. And in fact, it’s what we’ve done almost every year: we visit family in January when flights are a fraction of the price. We still get to spend good, quality time with our families, just a few weeks after Christmas. It’s a great solution for us! This year, we’re flying from Boston (where we live) to CA (where my family lives) for $216/person roundtrip (not even a red eye) in January vs. hundreds more the week of Christmas. I know time-shifting the holidays isn’t for everyone, but it’s a great way to save!

    Reply ↓
  10. Shari

    # December 18, 2014 at 7:04 am

    Love this challenge! I’m a freelancer with fluctuating income, and the way I work my additional savings (Roth gets maxed out no matter what) is to just take 10% of every paycheck that comes in and throw it in an interest-earning savings account. It adds up much faster than you’d think! And then when there’s slow months, I’m not nearly as stressed because I’ve got a financial cushion I can pull from.

    Reply ↓
  11. Tonya@Budget and the Beach

    # December 18, 2014 at 9:53 am

    Love this challenge idea and I’m in! I had kind of a bad income year last year but still that’s no excuse not to save whatever I can!

    Reply ↓
  12. Lisa | Happy By

    # December 18, 2014 at 10:03 am

    I always read your posts so eagerly, because they are awesome. And I never have imagined I’d read figures and calculations like this!

    The 1 % tip is amazing! I live in a “developing” country in the Balkans, where common monthly salaries are mostly between $150-$400, with $1000 ranking as “highest payed job”. (You do the math of the 1%).

    So one would think I am crazy to even think about following your advice. However, it works with tips like this. One thing I have to bring out, even if I’m not sure your target readers are from all over the world, is that the little tips on how to make it work, such as “cut the boxed orange juice” or “join Netflix” might not work worldwide (even in the US sometimes, I guess).

    There are people who are not already eating out or have the option of getting lower car insurances, so you might consider compiling a dedicated post/series on more alternative ways to cut back expenses. I am the first one that gets inspired to find out my own ways on what to cut back when I read “join Netflix” while I can’t access it from my country, but I am bringing this up just in case you care about reaching people out there who find it extremely difficult to come up with ideas.

    Thanks for the great content you share!

    Reply ↓
  13. Stefanie @ The Broke and Beautiful Life

    # December 18, 2014 at 11:02 am

    I love the concept of “ruthless prioritization” (one of the reasons I don’t even entertain the idea of owning a pet in the first place, haha).

    Making the savings automatic then challenging yourself to come up with the additional income when necessary is a great way to get people to rise to the occasion.

    Reply ↓
  14. Kristin @ Brokepedia

    # December 18, 2014 at 1:04 pm

    Love the way you put it–why not be ruthless in advance? Yep. Somehow, we always find a way. So why not ‘find a way’ before we have to make terrible decisions? (Like blowing off grandma or killing kittens.) I also like that you provide a practical way to make that happen. Good stuff.

    Reply ↓
  15. Claire

    # December 18, 2014 at 2:10 pm

    Out of curiosity, does anyone know if any of the automatic savings methods (online savings accounts or investment accounts) allow you to set up a progressive increase without manually changing it each month?

    Reply ↓
    • Afford Anything

      # December 20, 2014 at 10:44 am

      @Claire – I’m not aware of any bank or brokerage that will automatically increase your contribution by one percent — although finding one would be awesome. As a quick-and-dirty workaround, I’ve logged into my bank account and manually set up a draft for $X on a particular month, $Y the next month, and so forth. It takes about 10 minutes, and it’s not as simple as an automatic progressive increase, but it still accomplishes the goal of auto-drafting your checking account on a given day.

      Reply ↓
    • The Roamer

      # December 22, 2014 at 4:23 pm

      I know that 401k do sometimes allow that. Though most are yearly increases.

      My company is through Transamerica and you can say you want to save this much by a certain date and then it will increase until it hits that goal

      Reply ↓
  16. Asha

    # December 18, 2014 at 6:32 pm

    This sounds really interesting but.. I am already saving 27%, I wonder if I should try this challenge or if I would be stepping in the realm of punishing myself…I’ll think about it.

    Reply ↓
    • Afford Anything

      # December 20, 2014 at 10:40 am

      @Asha – That’s totally your choice. As you know, I recommend that a person saves at least 20% of their income — and since you’re already saving more than that, you don’t “have” to increase your savings. You’re already in a great spot.

      But if you want to pursue a big goal (like buying a house, paying off your mortgage within the next 5 years, early retirement, world travel, etc.) you’re certainly welcome to save more. Start by asking yourself what goals you hold in the next 5-10 years, and what those goals will cost you. Then you can see whether or not you should be saving more.

      Reply ↓
  17. gabeb1920

    # December 18, 2014 at 6:39 pm

    I love this idea!
    I’ve been struggling with my finances for years and I’m determined to get things in order. I’m going to try the 1% challenge in 2015. I’m starting from nothing but you have to start somewhere. I’ve just set up the debit from my pay today.
    Bring on 2015!

    Reply ↓
    • Afford Anything

      # December 20, 2014 at 10:38 am

      Awesome! I love that you already set up the debit — that’s exactly what you need to do to make sure you stick with it! Making it automatic is the key to success. 🙂

      Reply ↓
  18. Jessica

    # December 18, 2014 at 7:32 pm

    I love this idea! I’ve been so focused on debt reduction that I have neglected trying to save more.

    Reply ↓
    • Afford Anything

      # December 20, 2014 at 10:36 am

      Thanks Jessica! Keep us posted next year about what moves you make to save more, through the Challenge!

      Reply ↓
  19. Colin

    # December 19, 2014 at 10:44 am

    I recently hit 30% of my monthly paycheck going into savings or IRA. That doesn’t include my rental property income or the equity I’m building in my own home. I think I’ll try the challenge and see how little I can live on!

    Reply ↓
    • Afford Anything

      # December 20, 2014 at 10:35 am

      @Colin — Congratulations on hitting the 30% mark! That’s awesome! And welcome to the Challenge. 🙂

      Reply ↓
  20. Shannon @ Financially Blonde

    # December 19, 2014 at 11:44 am

    I love any challenge that forces people to think about savings over anything else. It’s so true that 1% is not really that big of a deal, but it absolutely adds up over time.

    Reply ↓
  21. Jason

    # December 21, 2014 at 6:18 pm

    This is a great challenge. I just started doing this by transferring all of my paychecks to my savings account and only putting money back for specific bills. This idea of saving an additional 1% is a great idea….definitely going to try it in next couple of months in the coming year.

    Reply ↓
  22. J Neal

    # December 22, 2014 at 7:51 am

    I did this for years, which is why I have a healthy 401k. However, I always had a hard time saving for the more expensive items (over $500) without putting it on a card first. Until I started budgeting. A good budget makes sure you are spending money on the things you actually care about.

    Reply ↓
  23. Mrs. WW

    # December 22, 2014 at 1:56 pm

    Thanks for the challenge. I recently got a raise and was excited to calculate my new savings rate after I put it all toward savings but I was disappointed it wasn’t higher. I guess now’s the time to change that– one percent at a time. Here we go!

    Reply ↓
  24. Rachel

    # December 22, 2014 at 4:34 pm

    This challenge is just what I need right now. I have been a bit complacent about my savings rate since reaching 50%. I’m really excited to see if I can stretch it up to 62% by next December.

    Reply ↓
    • Julie

      # April 21, 2017 at 9:16 am

      You are a saving rock star! Did you hit that goal of 62%?

      Reply ↓
  25. Sally

    # December 23, 2014 at 2:20 pm

    I’m pumped for this upcoming year and my goal is to get to 45% saved of gross income by the end of the year. I’ll work my way up to it, making each month a challenge similar to your plan here.

    Reply ↓
    • Afford Anything

      # December 26, 2014 at 1:46 am

      @Sally — That’s an awesome goal! Welcome to the Challenge 🙂

      Reply ↓
  26. Mac

    # December 24, 2014 at 9:57 pm

    I already save 50% of my income…an additional 1% each month for a year and I would have zero entertainment money left – I couldn’t live like that. I’m all about trying to save and invest more money, but I think I’ve comfortably maxed out my savings rate at my current income. People already think I’m cheap/crazy lol

    One thing I have been doing since the start of this year is not spending $5 bills. I put them in an envelope and every quarter I deposit them in the bank and promptly transfer the amount to my brokerage account. I don’t include that money in my 50% savings rate.

    Reply ↓
    • Afford Anything

      # December 26, 2014 at 2:05 am

      @Mac — A 50% savings rate is awesome; once you hit that mark, you’re a rockstar. There’s no need to kill yourself trying to save too much; over-savings can lead to burnout. I also like your strategy of saving “little amounts” (like $5 bills) and watching these add up over time … they can make a huge impact.

      Reply ↓
  27. Done by Forty

    # December 25, 2014 at 10:43 am

    I’ve definitely advocated that non-budgeting approach to others before. Oddly enough, I really like tracking my spending in my spreadsheet as it provides built-in incentives to save more than my “start of month” goal. Upsides to both approaches though, clearly.

    Reply ↓
    • Afford Anything

      # December 26, 2014 at 2:09 am

      @Done — Absolutely! If you’re a detail-oriented type of person and/or the type of person who LOVES spreadsheets, traditional budgeting works.

      I can’t stand details/spreadsheets/tracking when it comes to my day-to-day expenses, but I love making spreadsheets 2-3 times per year to calculate my net worth. I know that there are online programs that will automatically reflect the value in all your accounts (all in one spot), but I still like logging into every account (manually) while I update the Net Worth spreadsheet — it’s almost a meditation process, a time to actively reflect. (I know; I’m a huge weirdo.)

      Reply ↓
  28. katie

    # December 30, 2014 at 12:19 am

    I already for the last year have saved 65% every month, sometimes 70%. If I follow your plan, at the end of another year that would be 75% to 80% and with current income less than $1400. I would be starving by then. Nice idea but not for people who know how to save and never own credit cards.

    I disagree with your plan wholeheartedly, it is not practical. People should use their extra money to pay off credit cards first and foremost.

    Reply ↓
    • Afford Anything

      # January 2, 2015 at 1:33 pm

      @Katie – If you’re already saving 65-70% of your income, you’re in a good spot. The One Percent Challenge, as the article said, is intended for people who have the limiting belief that they can’t save enough.

      You can use savings to build an emergency fund, repay credit card debt, save for a long-term goal like college savings or retirement, or pay off your house early. That’s the beauty of savings; you can apply this money to whatever goal is keeping you awake at night.

      Reply ↓
  29. Jason @ Phroogal

    # December 30, 2014 at 7:04 am

    You’re right we will always find a way to do what it is we want or need to do. I used the spreadsheet approach, then the app approach and eventually it was ingrained in my mindset and habits. I also learned that I enjoy being a minimalist with things and having minimal things to think about or tools to use has been beneficial for me.

    Reply ↓
    • Afford Anything

      # January 2, 2015 at 1:39 pm

      @Jason — A minimalist mentality is a much better way to boost your savings than a cost-cutting mentality.

      One of the reasons I never liked traditional frugality blogs — the kind that obsess about clipping coupons — is because the tips on these blogs not only devalue your time, they also focus on consumption, consumption, consumption. Sure, you’re consuming for a cheaper price, but at the end of the day, your thoughts are still occupied by buying and spending.

      A minimalist mentality, on the other hand — one that focuses on creating and contributing, rather than consuming — is a much stronger mental practice. I’ve spent the past few years slowly trying to adopt this practice. Less clutter = happier life.

      Reply ↓
  30. Edward

    # December 30, 2014 at 3:01 pm

    Good article! And it’s amazing to hear so many people are saving such a huge chunk of their paycheques. I don’t feel like such a weirdo now. I hit 57% savings this year (over last years’ 49%). *AND* I went on both a European and a Caribbean vacation. If I kill a certain bad habit in 2015, I just may be able to ratchet the savings up a few points higher.

    Reply ↓
    • Afford Anything

      # January 2, 2015 at 1:28 pm

      @Edward — That’s awesome! A 57% savings rate adds up FAST and will carry you far. Nice work!

      Reply ↓
  31. Marcelina

    # January 3, 2015 at 11:04 pm

    I love this challenge but I’ve adapted it slightly. I increased my bi-weekly mortgage payment by 15% starting this month. On top of that I’m already saving 18% of my paycheck (includes 5% employer match). When I no longer have childcare expenses, hoping to bump that savings rate way up, but that’s still a good 6 years out.

    Reply ↓
    • Afford Anything

      # January 5, 2015 at 3:58 pm

      That’s excellent, Marcelina!! That makes me happy. Great job!! 🙂

      Reply ↓
    • Suzi

      # December 28, 2015 at 9:31 am

      I am just loving all your ideas, thank you from Africa

      Reply ↓
  32. EL

    # January 5, 2015 at 11:28 am

    Really simple way to get savings in gear for the long haul. I don’t understand why its so hard to save for some people. Set it up, and forget about it, live off the rest. A 12% annual increase is doable with the 1% challenge. Imagine how much savings year 2 and 3 will bring if you keep it going.

    Reply ↓
  33. Joel Arches

    # January 6, 2015 at 10:08 am

    Thanks for this great tip! The one percent challenge is workable, the longer it takes, the better.

    Reply ↓
  34. Becca

    # January 11, 2015 at 8:39 pm

    I think this is great, and so much more sensible than the “save what’s left at the end of the month” approach. I’ve found if I transfer money to savings immediately (or to my loans, as the case may be), I don’t miss it, but if it’s in my checking account I will somehow manage to spend it all. Funny how that always happens, huh?

    Reply ↓
  35. Richard Burton

    # January 31, 2015 at 10:26 am

    Hey Paula, I’ve been following your Blog for several months now and I’m a massive fan. I have used similar approaches in my life since leaving University… In fact since I had part time jobs in my teens. As a result I bought my first house at 24 (in the UK that’s a big deal, as house prices are crazy). I let it out two years later and bought another house with my now wife 3 years after that. We are now saving between 40 and 50% of our income each month, as we’re looking to up-size our residential property. I keep telling my wife that with each month that passes we can afford a bigger home and it keeps her motivated. It’s not easy, and when we do up-size our mortgage is going to shoot up, and so our savings rate will have to drop (big time). Have you got any tips for this transition. One of my thoughts is to use the rental income I have to support us if we get stuck, but I’m trying to compartmentalise that income stream such that I can buy another rental in years-to-come. I guess I just need to do the numbers,but any insight would be much welcomed.

    Reply ↓
  36. Rose

    # February 16, 2015 at 4:13 pm

    I begun the challenge back in December but I decided to tweak it a little since I work freelance although I do have a steady client because of educational and family commitments my income does fluctuate. I decided to do the 1% but do it with each paycheck I get. My goal is to hopefully hit 20% at the minimum. I’m also actively paying off 16,500 in debt (down from 24,000). So far it’s going great. I used from some of the tips from here and also TDIW to help me reduce my debt and come up with a payment plan and how to fund it to the max.

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