When many people are looking to make a change in their lives, they often make a huge change. Some people go from a completely sedentary life to working out for one hour each day. Others may vow to cut their spending budget in half as they try to get out of debt. Still other people may quit their jobs as they try to gain control of their crazy schedule.
We often go all in when we try to make a change in our lives. And honestly, this can be a good thing! Sometimes the best way to make a change is to make a big change.
However, we don’t always need to make a big change, especially when it comes to our finances. Sometimes, changing by just 10% will allow us to achieve all of our financial goals!
For instance, what if we decreased our spending by 10%? What if our income increased by 10%? What if we put 10% more of our income into a retirement fund? What if we got rid of 10% of our fixed expenses?
Could making just a 10% change make our finances 100% better?
Save 10% more of our income
I’m going to defer to the expert on this one. None other than Mr. Money Mustache himself! One of the most popular posts on MMM’s website shows that saving just a little bit more of our income can cause us to be able to retire much earlier.
For instance, let’s say that we increase our savings rate from 20% of our income to 30%. As this chart shows, the amount of time before we can retire drops from 37 years to 28 years!
We knocked 9 years off of our working lifetime just by slightly increasing our savings rate!
If we are currently saving less money, then this effect is compounded even more. Going from a 5% to a 15% savings rate decreases the number of years that we need to work by 30. Since many people have a savings rate that is currently less than 10%, this can be a game changer when it comes to our retirement!
Make 10% more
Besides saving 10% more of our income, it would also be great if we all got a 10% raise at our jobs this year. And hopefully, you find yourself in this situation or even a little bit of a better one!
However, I know that you might not get a 10% raise this year, or even any type of raise at all. And unfortunately, I’ll probably be in the same boat as you. My profession has even seen slight decreases in pay over the past few years!
With this in mind, the only way to guarantee that we will make 10% more this year is to get a side hustle and take advantage of the gig economy. Uber is looking for drivers, your local grocery service is looking for shoppers, and there is a lot of money to be made doing freelance work online.
So … even though we may not get a raise at our main job, it certainly is possible to increase our income by 10%.
I would suggest creating a small list of things that we are uniquely qualified for. Using that list, we can brainstorm or search online for opportunities. Hopefully, these opportunities will allow us to make a little bit of extra money doing something that we enjoy and are good at.
Spend 10% less
Something that I don’t always think about is that spending $1 less isn’t really like making $1 more. Instead, depending on your tax bracket, it is kind of like making $1.25 to 1.50 more. So it’s great to make a little bit more money, but it is even better to spend a little bit less!
With this in mind, my wife and I set a goal in 2019 to spend 10% less of our money.
The way that we are decreasing our spending is by trying to make sure that all (or most) of our spending reflects our priorities. For us, this has been pretty easy to do. All it takes is a few minutes of thought when we are setting up our budget as well as a couple of minutes when we are reflecting on our budget. We’ve found that we definitely aren’t perfect every time we spend money. However, we have also found that most of the spending we do actually lines up with things that we value in life.
We are still going to do a ton of traveling this year, have our kids involved in sports, and even have some great coffee and books to read. The important thing for us is to make sure that we cut back in areas of our life that don’t match our goals, values, or priorities.
It’s just 10%!
So … can we make a 10% change in our finances? Or is there another area of our lives where we could change by just 10%? Even though we only will be making a 10% change, our lives and our relationship with money could become exponentially better!
Where can you make a 10% change in your life? Wherever it is, make sure you think it, write it down, and get started on it today! Let us know what it is in the comments below.
And thanks for reading!
~Nathan
Let’s keep living a great life … with the help of money. So what’s next?
- You can travel for free by using rewards credit cards.
- You can get motivated and get out of debt.
- You can check out the next post or the previous post and continue to learn.
But no matter what you decide to do, let’s leave the ordinary behind and take action today!
