Trying to beef up your savings…and having trouble doing it consistently? There are all sorts of methods and principles, but none’s easier than the 10% Solution. (Not to be confused with Sherlock Holmes and The Seven-Per-Cent Solution…)
Here it is.
Every time you make a charitable donation, deposit the same amount in your savings account.
If your church recommends tithing (and many believe that 10% of your income is a good starting point — thus the name), then an equal amount should be set aside in your long-term fund.
Although my parents stuck just to donations for this ‘rule,’ I enjoy experimenting with it:
Every time you buy a ticket to a concert, the same amount goes into savings. (If you can’t do that, then obviously you shouldn’t be going to the concert!)
Every time you buy tickets for an amusement park, Disneyland, kids museum… ditto.
Does even this seem too extreme? Then start small. For every book, album or video you buy, match it in the savings account. Going to the movies, or subscribing to Netflix every month? Then you should be able to afford to put that same amount away in your savings. Even these small amounts add up faster than you think.
Or base it on food — every meal over $20 counts as a double-dip into savings. Burgers, fried chicken and tacos — they can become the standard, instead. (Or skip a meal, and add the money to the account. If your caboose is substantial, you can afford to miss one for a change.)
Here’s another 10% Solution: for every large-ticket purchase, from couches to refrigerators, 10% of that amount goes into savings. (Negotiate a discount on these items — then use that money to fund your bank account!)
The 10% Solution can also apply to extra money from gifts, extra jobs and windfalls. Wherever the rest of the money goes, 10% comes right off the top into savings. (Direct deposit works wonders. So does a separate ‘secret’ bank account only used for savings.)
It may go slowly, at first. But if you stick to this plan and follow it consistently, you’ll be amazed at how much your savings will grow. And grow. And GROW.
And that’s smart.