You can probably list a lot of smart financial habits off the top of your head—like living below your means, saving 10 to 15% of your income, and investing early and often. You’re already doing all of these things, right? No?
So here’s the problem: Knowing what you should do doesn’t always translate into action. In fact, all that financial advice can be overwhelming, especially when we feel like we’re lagging behind.
Here’s how to fight that feeling and jumpstart your progress.
1. If You Can’t Stick to a Strict Budget
There’s no doubt that tracking expenses—from entertainment to food and transportation—can be tedious. If you’re struggling, focus on just three numbers for a while: what you earn, spend, and have left over. Make sure the first is higher than the second, and the third goes toward saving and investing.
Once you’re ready, Certified Financial Planner Christopher Kimball recommends aiming for the 70/30 ratio: Contribute 10% of your income to charity, 10% to an emergency fund, 10% toward retirement, and live on the remaining 70%.
You can always upgrade to a more prescriptive strategy, but this ensures you’re taking care of your top priorities in the meantime.
2. If the Thought of Retiring With $1 Million Makes You Dizzy
Given the median retirement balance for U.S. families is just $5,000, it’s no wonder the traditional advice of saving $1 million for retirement feels unattainable for many of us. The solution? Instead of obsessing over a seemingly unreachable goal, set achievable mini-milestones.
Financial planner Ryan Frailich of Deliberate Finances says the first one should be to bank one year’s salary—in a 401K, IRA, or brokerage account—by 32 (assuming you plan to retire in your 60s). “This helps ensure you’re building a base that will compound for 30 years to come, rather than trying to make up the difference when you’re approaching retirement,” he says.
(If you’re older than 32, and aren’t there yet, sock away as much as you can for retirement to make up for lost time—advisors generally recommend aiming to contribute 15% of your annual income.)
3. If You’re Staring Down a Huge Pile of Debt
Like retirement savings, successfully paying off big debt often hinges on creating bite-size goals—starting with tallying your balances and picking a payment strategy: Focusing first on debt with the highest interest rate can save you the most money over time, but knocking out smaller balances can help you gain momentum.
Next, find ways to free up extra cash to funnel toward your debt. Because minimum payments are designed to keep you in the hole for a long time, Frailich suggests working up to doubling or tripling them to make faster progress.
4. If Money’s Too Tight to Save for Emergencies
We’ve all heard that a healthy emergency fund is the cornerstone of financial health. It helps us avoid racking up more debt, or, worse, borrowing from our investments when an unexpected bill hits. At the same time, saving three to six months’ worth of expenses when money’s already tight is no easy feat.
How about this? Eliminate just one expense per week. Packing your lunch for a couple days may save $10 one week. The next, you can save $30 by scouting a happy hour deal instead of paying full price for after-work food and drinks. It all adds up. Then, put that money into savings before you’re tempted to spend it on something else.
The small savings will add up, plus this exercise can help you find more costs to cut than you thought you had—and realize it’s not that painful, either. “Lifestyles adjust to whatever money is available,” says Kimball.