"I'll start when I earn more"

If the money runs out every month, the natural conclusion is that there isn't enough of it. With a bit more coming in, there'd be slack, and saving would be easy. So the sensible course seems to be to wait for the pay rise, the promotion, or the end of the car loan in eighteen months.

This belief deserves respect, because for some people it's simply true. If every pound of your income goes on essentials, more income is what you need, and the next chapter is about that. Many people who hold the belief, though, have already had the pay rise, often several of them, and found that nothing changed.

Think back to what you earned five years ago. For most people in steady work it was noticeably less than now. If you'd been told then that you'd be earning today's salary, you'd have assumed that your future self would be saving comfortably. You aren't. The balance on the twenty-seventh looks much as it did then. Each rise was absorbed within a few months. You moved to a slightly better flat and bought a newer phone. You took a nicer holiday and did more of the shopping at the better supermarket. None of these felt like extravagance. They were what someone on your income would normally spend.

This is chapter 3 over a longer span. Spending adjusts to what's available, and under the leftover plan everything you earn is available. A rise produces a slightly more comfortable month, and it doesn't produce any slack.

There's research on why we keep expecting it to. Gal Zauberman and John Lynch ran a series of experiments on how people forecast their future resources. People consistently expected to have more slack in the future than they had now. The effect was stronger for time than for money, but it was there for money too. The future looks roomy from a distance because its particular demands aren't yet visible. You can see today's tyres. The expenses of two years from now can't be seen yet, so that year looks as if it'll have money to spare. When you get there it's as crowded as the present.

The most useful research I know on this problem accepts the bias and works with it. Richard Thaler and Shlomo Benartzi designed a workplace scheme they called Save More Tomorrow. Employees weren't asked to save more now, which they'd have resisted. They were asked to commit in advance to putting part of each future pay rise into their retirement savings. Nothing changed until the next rise arrived. When it did, a share of it went to savings before it ever reached their pay packet. At the first company to try it, 78 per cent of those offered the plan joined. Four fifths of them were still in it four pay rises later. Over forty months their average saving rate went from 3.5 per cent of pay to 13.6 per cent.

That was one company's retirement plan in the United States, and the people who joined had chosen to. I wouldn't promise you the same numbers. The principle carries over, though. Nobody in that scheme ever saw their take-home pay fall, because the extra saving came out of each rise at the moment it was given. It never became part of what they were used to living on, so they didn't miss it.

This gives you two things to take from the chapter. The first is that waiting for a higher income won't solve the problem, because the leftover plan absorbs rises as it absorbs everything else. If you can't save on what you earn now, I'd expect you to be unable to save on ten per cent more, for the same reasons. The second is a technique for later. Once your transfer is running, the easiest time to increase it is when a rise comes in. Put up the standing order by half the increase in the same week. You'll still feel better off, and you won't have to give up anything you've got used to.