One of my goals for 2022 is to get active with push-ups. To be more specific, I set to do 10 push-ups a day and increase that by 1 extra push-up per month. So for January, I started with 10 a day and I have since increased that to 11 a day for February. For March I will raise that to 12 a day and so on. The idea is to increase things while not shocking the system. I couldn’t just go from 10 push-ups a day in January to 20 in February. For those familiar with the ‘boiling frog syndrome’ , this should make sense.
You can apply the same ‘ladder’ approach to your finances, be it to save money or pay down debt.
Saving money
You can apply this in many different ways. You can start by saving a specific amount of your net pay and increase it by a specific amount or percentage each paycheque thereafter. Or, you can set it so that you are increasing it by 25% per quarter. So if you are starting with $100 saving bi-weekly in Jan, by April 1st, you increase that to $125, then $156 by July and so on. If this proves complicated , you can stick to the easier method of increasing it by a set amount. Alternatively, you can try out a more interesting method, where you increase your contributions based on the month. So starting in Jan with $100, you increase it to $120 in Feb (since Feb is the second month) and by the time you get to December, you will be saving $220.
Paying debt
Paying debt is similar to saving money, but instead of keeping it to yourself, you are paying it back to banks for borrowing their money. Here, too, it is key to set financial goals and fine-tune them as you go. Depending on your debt level, start off by dedicating a certain amount to pay off toward your balance and aim to increase that periodically. This could be done as aggressively as every paycheck , every quarter of however you want to set it. The key is to increase it periodically. Every increase will go a long way towards paying off your balance quicker, while saving on the interest.
Depending on what your financial goals are, start off by writing it down and being clear about what your current situation is and where you want to be. Next, set a timeline. And finally, decided how much you will set aside and how much to increase it by, and how often. It is magical what happens when you are specific, have a specific timeline, and add the power of compounding to it.