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My dad's 'save 10% off the top' rule finally paid off after 5 years | Family Finance Planning - Thought Shares

My dad's 'save 10% off the top' rule finally paid off after 5 years

My dad always told me to put away 10% of every paycheck before I even look at the rest. I thought it was some old-school nonsense (he's been saying it since I got my first job at 16). For years I ignored it, mostly because I was living paycheck to paycheck in my 20s. But last year my car's transmission died, and the repair was $2,800. I had zero savings, so I had to put it on a credit card and it took me 8 months to pay off. That really stung, so I finally tried his method starting in January. I set up an automatic transfer to a separate account every payday, no matter what. Now 10 months in, I've got almost $3,200 saved up without even feeling it. Has anyone else had old parent advice that actually worked way better than you expected?

3 comments

3 Comments

ray3565mo ago

That $3,200 is a solid emergency fund now. The trick really is the automatic part because if you have to think about it, you'll talk yourself out of it. I did something similar but went with 15% and it forced me to actually adjust my spending instead of just hoping I'd have leftovers at the end of the month. Once you get past the first few months, your brain just treats that account like it doesn't exist. The transmission repair is the real kicker though because that's exactly the kind of thing that wipes people out. Your dad was onto something he just had to wait for you to get burned first to believe him.

sandra_bennett595mo ago

Gotta push back here a little. Automating savings is great but it also makes people lazy about actual budgeting. If you automatically save 15% without tracking where the rest goes, you might be bleeding money on fees or subscriptions you forgot about. I've seen folks automate themselves into a false sense of security then freak out when a real emergency hits because they didn't actually adjust their lifestyle. Plus that automatic money can feel untouchable but life doesn't care about your savings schedule. What happens if you need that cash six months before you planned for it?

janah835mo ago

Honestly, I get where you're coming from but for me automating was actually the thing that forced me to look at my budget more carefully? Like when I set up my automatic transfer I realized I had to account for every dollar or I'd end up short on rent. So I did a deep dive on my subscriptions and found like $60 a month going to stuff I forgot about. That got me to cancel a bunch and put that money toward savings too. It's not perfect but for me the automation made budgeting feel less scary, more like a game to see how lean I could get while still saving.