What Happened When I Saved 10% of Earnings

I decided not too long ago to see what would happen if I saved 10% of my income and stashed it away in my savings account. My goal was to simply save 10% of my earnings to see just how easy it could be if I chose to be consistent with this new habit.

What happened next was nothing short of amazing. When I was socking away 10% of my earnings rather than budgeting that amount for expenses, and instead I budgeted only the remaining 90%, I learned that it could absolutely be done. I taught myself to pay all of my monthly expenses on only 90% of the total earned, and that included what was set aside for continuing to pay down debt.

Did you ever notice that if you have a week to complete a project, it will take you about a week to complete? If you take that same project and bump up the completion date to three days, in most cases, it will take about three days to complete.

In the same way, we budget based on the total amount that we are earning month after month. We get used to what we’re earning, and even if we get a raise, we eventually get used to that increase in earnings and continue to do the same budgeting with 100% of our earnings.

When you attempt to shave 10% off of the top of your earnings and dump it into the savings account where it’s not earmarked for any spending, you will find ways to make that 90% stretch and work. I found that I wasn’t even reducing the amounts that I had budgeted in certain categories. Instead, I was getting used to doing the same with a little less, and the lesson learned was that I was likely being wasteful with at least some of that 10% that is now going right into a growing savings account.

What’s more, I am not even earmarking this as part of an emergency fund plan. Instead, I’m focusing on this savings being there in case I might have a month where the remaining 90% isn’t enough.

The crazy thing is that once I got used to budgeting 90% of my earnings, I haven’t had to tap into that 10% that went to the savings. This has led me to a few conclusions. One is that if we are serious about saving up for a certain goal, it can be done as long as we set the stage to make it happen. Secondly, if it’s possible to shave 10% off of the top of earnings to stash away in savings, is it possible to save even more to see what the limit could be when it comes to consistently saving?

Finally, what would happen if we applied percentages to other goals besides savings? What if we promised ourselves to shave off another 10% and apply it towards the debt that is currently in the crosshairs to be eliminated? Would we be able to pay off debts that much faster while still growing a healthy savings at the same time?

Now of course, your mileage may vary. For some, shaving off 10% of earnings for savings and more for quicker debt reduction and elimination may not be something that is able to be done at this time. For others, they may find that they can shave off even more for savings and even more for aggressively attacking debt. Still others may choose to switch things up and start with a higher percentage towards debt and slightly increase the percentage towards savings as the debts are paid down and paid off.

It really doesn’t matter which strategy is most comfortable for you as long as you are willing to see if you could have some success with consistently setting aside a percentage to attain a particular financial goal.

Let your imagination run wild. See what other categories you can tackle with a percentage strategy. How about saving for a vacation? How about saving for a replacement vehicle? How about saving for another purchase that you’ve been putting off? The possibilities are plenty, and this could end up being an interesting experiment with very positive results.