Boost wealth dramatically by raising your savings rate

Taylor was working long hours at her startup job, believing she needed every dollar to keep up with office life—fancy lunches, weekend brunches, after-work drinks. When a mid-year bonus arrived, she splurged on a new smartphone and a concert ticket. Two months later, she realized she’d still barely saved anything.

Her colleague Erica, in contrast, quietly diverted 30% of her own paycheck into a sub-account each month. As her balance grew, Erica paid off a high-interest credit card, then let the remainder compound in an index fund. When she showed Taylor the chart of her net worth climbing steadily over one year, Taylor was stunned.

After running the numbers, Taylor redrew her budget: 30% straight to saving, no excuses. She automated the transfer so it happened before temptation hit. By year’s end she’d stockpiled over eight months of living expenses. Behavioral economics calls this “commitment devices”—the fewer choices you have at decision time, the more likely you are to stick to your goals. By automating and aiming high, Taylor finally aligned her actions with her ambition.

You’ll map your earnings and expenses, set an ambitious savings percentage, and configure your bank to auto-divert that slice before you can spend it. Each week, glance at your growing balance to reinforce your progress. This kind of automated saving keeps impulse in check and momentum on your side. Give it a try this pay period.