The decision

This chapter asks you to decide something. It comes late because at the start it would have sounded like "you should save more", which you've known for years. By now you've seen why the leftover plan fails for almost everyone. You've seen that a surprise in the month is normal, and that a higher income gets absorbed like everything else. You've seen that small amounts are worth having, and that savers mostly rely on arrangements and not on discipline. You also know the setting up takes twenty minutes. So here's the decision.

On payday, before anything else, a fixed amount goes to savings. I live on the rest.

Here's what it involves.

A separate pot. It's named, it has no card, and it's preferably with a different provider.

A standing order on payday. It's for a fixed amount with no end date, and it's set low enough to stay put.

The balance as the month's money. You spend what's left after the transfer freely and without guilt.

A written sentence about what the cushion is for. Check it before any withdrawal.

Half of every rise. When your pay goes up or a regular payment ends, raise the standing order the same week.

Never cancel, only redirect. When a pot is full or a debt is cleared, the payment goes to the next purpose.

Plans of the "when this, then that" kind make a decision like this more likely to hold. Peter Gollwitzer and Paschal Sheeran pooled 94 tests of such plans and found that they made people a good deal more likely to follow through. Most of this method doesn't need them, because the standing order doesn't depend on your remembering anything. The plans are for the few moments when you could undo it.

When I'm tempted to move money back from the pot, then I'll read my sentence first and wait a day.

When I get a pay rise, then I'll raise the standing order by half of it before the end of that week.

When the month runs short, then I'll lower next month's transfer and leave the pot alone.

The first of these matters most. A day's delay is usually enough. Real emergencies are still emergencies tomorrow, and most impulses aren't.

Here's what to expect, and I'll be careful, because I can't promise you an outcome. The first payday brings a small pang, and the first month may feel a little tight. By the third month you'll probably have stopped noticing. The pot will grow by exactly the amount you chose, every month, and it won't depend on how careful you've been. At some point in the first year something will break, and you'll pay for it from the pot and not from a card. When that happens you'll feel the difference, and I expect it'll convince you more than anything in this book has. After a year you'll have twelve transfers' worth, less whatever the cushion has absorbed, and you'll have raised the amount once or twice.

I can't promise you'll become wealthy, or that a small cushion will protect you from a large misfortune. It won't. What I'd expect to change is that your savings figure starts moving for the first time in years, and that ordinary breakdowns stop turning into debts. The twenty-seventh will look much the same as it always has, except that the saving for that month will already have been done.