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Let’s say at the end of the month you have an extra $267 after expenses and your regular saving. If you spend it all, you may wish you didn’t after the fact. If you save it all, you may feel saving is punishment, and that you never get to have any fun. If you don’t have a regular savings plan, this could get you used to the idea, and hopefully edge you closer to making it part of your life. This is a start, but should not replace the idea of regular savings.
Every paycheck, pick a round number and put that into savings. Let’s say you decide to put $200 of the $267 as additional savings this month. The $67 is to spend any way you decide. Next month, you may have $302 left over. You may decide to save $100, and spend the left over $202. Remember, the $100 is in addition to your regular savings—it’s “extra” so don’t beat yourself up for having fun with the rest.
I have several savings accounts. One for a car, one for travel, etc. When I have “extra” money, I may chose one of these accounts, or my financial freedom account—which eventually ends up in an IRA as the amount grows.
The key is to save first, spend second.