An Easy Way to Increase Your Savings Rate to 50%
I recently came up with a quick and easy way to increase my savings rate and put any new possible expenses under the radar. Now, I am sure this isn't an original idea, I haven't read anything about it. It is a very basic idea. Save the same amount as your are spending. e.g. I buy a cheeseburger for 2 bucks. I save 2 bucks. I am not quite sure where I am going to draw the line. Will this include bills? I think to start, I will say no. Not only will this increase my savings rate, but I will have to evaluate if I can truly afford it a bit more aggresively. For small expenses, it will be easy. But what about the 400 dollar Roomba? Can I afford to save 400 bucks at the same time and be out $800?
This savings technique was born after reading a Mr. Money Moustache article where he wrote something like, "if you can't afford to replace it, you can't afford to buy it in the first place". In my mind, I thought, okay, so everything costs twice as much. 99% of purchases will be easy and wont' grow my savings that much, but, man, a new laptop would set me back (or is it forward....). I am going to give this a try and update the post after a month or two. I will be able to see what my average savings rate was before and after this expirement. While I don't think this going to revolutionize my spending habits, I am convinced that it won't hurt. Every dollar counts....