QUESTION: How to use the 1% rule for savings?

The 1% rule is one of the mildest and most psychologically comfortable methods for building the healthy habit of regular saving. The essence of the method is not to try to save a third of your salary all at once, but to start with a small percentage that is unnoticeable to your budget. You take your current monthly income as a baseline and save exactly one percent in the first month. This amount is so insignificant for your wallet that you will practically not notice its absence in your usual expenses, while taking the first step toward building financial discipline.

The next stage is a gradual and systematic increase in this indicator. Every one or two months, you increase the savings rate by another one percent. Due to the fact that the increment step is very small, your psyche and usual lifestyle do not experience severe stress. Your body and wallet have time to adapt to the new conditions without a feeling of harsh austerity. After a year of this practice, you will imperceptibly reach a savings level of 10-12 percent of your income, which is already an excellent base for building a reliable financial reserve.

To successfully implement this rule, it is recommended to use modern banking technologies. Set up automatic debiting on the day you receive your salary or any other income. The bank will independently transfer the required percentage to a savings account, eliminating the human factor and the temptation to spend this money on immediate needs. If your income increases or decreases in any given month, the absolute amount of savings will automatically recalculate in accordance with the current percentage, preserving the balance inherent in the method.