Find something you pay for but do not use

I recently read a great article by Rocco Pendola about a laughable savings strategy proposed in an article at Motley Fool. The strategy proposed by Motley Fool is to stash away 15% of your $50,000 income for 35 years and wind up with over $2.1M. In the article, Rocco accurately breaks down the living expenses and points out the vast challenges of this Foolish strategy.

While I agree that following a plan like the one outlined by Motley Fool is unlikely to be successful, I feel very confident that you can create a habit of savings that can grow beyond your best expectations. And you can start your savings journey pain-free.

If you start something new and find that the habit is painful, you will likely stop. Perhaps you went on a crash diet at some point in your life. Sure, you lost some weight while on a very restrictive diet, but the diet was so restrictive that you couldn’t bear to continue. And then you put the weight back on, and then some.

You will have the same problems maintaining a savings habit if you create your habit through deprivation. It’s much easier to shop on Amazon for some crap you don’t need than to make big sacrifices to save for your future.

Creating a sustainable savings habit is a critical factor in your financial success. If you dream of financial independence, you must save an awful lot. Jumping into the deep end of the savings pool and trying to save 15% of your salary immediately will be very painful, especially if your salary isn’t large. Most of us didn’t start our journeys with large paychecks.

Here are a few ways to start small and create a savings habit that can grow with you.

Find something you pay for but do not use.

If you look closely at what you spend your money on, you likely pay for something you do not use. Maybe it’s a subscription you paid for but no longer use. Some examples are Spotify, Headspace, and Hulu. Find one thing, no matter how small, and cancel the service. Take that money and set it aside for savings.

Maybe it’s only a few dollars per month. The amount doesn’t matter. The act of saving is the key. You have to start somewhere.

Over time, it will become much easier to spot items that you pay for but do not use. Stop paying for these things and divert the money to your savings when you find them.

Divert part of your raises to savings.

You may have a 401(k) at work. Starting a contribution when you get a raise is an excellent time if you are not already contributing to your 401(k). If you get a 3% raise, you can send 1% to the 401(k) and still see more money in your paycheck. That 1% is helping you out, and you never missed it because it never hit your paycheck.

I didn’t know anything about saving for the future when I started my professional career. One of the senior members of the team I worked on suggested that I consider contributing 6% to the 401(k) to get the company match. I had just transitioned from a job in the US Air Force ($13K/year) to a job at IBM ($30K/year). I had a bunch of bad debt baggage, but I listened to my coworker’s advice. I never missed that 6%, and I made considerable progress on my debt thanks to my substantial pay increase.

Each time you get a pay raise, evaluate your needs and divert at least some of the raise to savings. After years of this practice, I was maxing out the 401(k) contribution limit, and not once did I ever miss a penny of the money I was saving.

Divert at least part of the payment to savings if you pay off your debts.

You may be working to clear debt from your life. Reaching a debt-free state is very important, and if you can get there, you will suddenly find that you have some extra money. Do yourself a favor and divert at least some of that money to savings.

When I paid off my last car loan, I decided to divert the money to savings. By this point in my life, I was living within my means and was doing fine without the car payment money. When I diverted the money to savings, nothing in my life changed.

You may need to apply the money you used to pay off debts to ensure that you do not go back into debt. There is nothing wrong with stabilizing your lifestyle. If you can use at least some of the money for savings, you will soon begin to see your net worth grow.


I had no savings and a pile of debt when I started my journey to financial independence. Thanks partly to dumb luck and fortunate choices, I started making small incremental contributions to my savings. The most significant gains happened each year when I received a raise at work. I always set aside at least a portion of the raise for savings. By the end of my 30-year career in IT, I was stashing away 70% of our household earnings. I achieved that accumulation rate through a habit of savings created in tiny increments over a long period of time — all without causing financial pain to my family or me.

Savings is an essential factor in your journey to financial independence. Along the way, you will also need to focus on creating more income and controlling expenses. If you can make incremental improvements to your income and control your spending and lifestyle creep, you will be able to grow your savings rate.

When you start saving small in ways that do not cause pain in your life, you create a sustainable habit that can build over time and create wealth.