Taking on the 1% Challenge: Update #1


After neglecting the blog for a couple weeks while in Asia, I am so excited to get back to posting on a weekly basis. I thought it would be a great time to check in on one of the goals I set for myself in March. Because I am still a total newb to the finance arena, I had never actually calculated my savings rate before. Inspired by the many posts from bloggers saving half or more of their income, I decided to calculate how much of my income I was actually saving.

And LOL. Yea I am not saving half. Not even close.

But I was still pleasantly surprised at my savings rate. For someone who used to spend every dollar on margaritas and plane tickets, I was pretty damn impressed with myself for having a savings rate of 29%.

You can go check out all the nitty-gritty details here about how I calculated my savings rate and what I included in the calculation here.

And even though I thought my achievement of 29% was wildly impressive (ahem it’s really not), I decided to take on a baby challenge to try and bump my savings rate up little by little. I am getting close to finishing up Month 2 of Paula Pant’s 1% Challenge (www.affordanything.com) where you increase your savings rate by one little percent each month.


Why the need for baby steps?

Because my income is not high. I make a super average Canadian salary. Let’s be real, it is simply easier to bank thousands of dollars a month when you’re taking home, well…lots of thousands of dollars every month.

That is so awesome for people who are able to save half or more of their income (and some do this on average salaries too!) but that is not me. After my basic living expenses are covered every month, I do have some left over, just not a lot.

Because of that, increasing my savings rate is going to take careful planning.


Why bother increasing your savings rate by so little?

Fabulous question. I could go into the hardcore FIRE details of how even a 1% increase in savings rate will change your road to retirement, and these statements are true and worthy of consideration. But for me, I wanted to do this for a few reasons:

  • Easy wins. We all need easy wins sometimes. Stretch goals are awesome – I have a bunch myself that I fully intend not to hit by the year-end. But doing the 1% challenge was an easy way for me to re-ignite the fire when it comes to my finances and get excited about these monthly accomplishments.
  • Habit building.  Managing money, like most things in life, is about learning the basics and developing sound habits that allow you to achieve what you want to achieve.  This challenge has forced me to re-examine my budget, look closely at where else I can make some cuts, be really intentional about every dollar, and make saving a habit.  And that is an AWESOME thing to do no matter your financial situation.
  • Competing interests. I have about a BAJILLION competing savings interests. This may very well be a generic stage-in-life thing and not unique to me at all, but I apparently need to have a car, a wedding, a house, and a baby in the next three to five years. And retiring sometime before 80 would be nice. An extra $30-40 a month saved now, while it doesn’t feel like much, makes a big difference in two years. Five years. Forty years.


Alas, how did I do?


My goals for the month of March and April were as follows:

March: 30%

April: 31%


And the final result?

March: 29%

April: 33%



If trying to get my finances in order has taught me anything, it’s that I am not good at math. I actually chalk up the failure in March to simply being bad at calculating percentages.

To be fair, these two months were extreme outliers in terms of my income. Planning a 30 or 31% savings rate any other month would have been super easy, but these two months happened to be stashed full of fun financial wins like a healthy tax return, a 3-paycheque month, another big tax credit from the government, and some unexpected side hustle money.

So shouldn’t it have been easier to hit the goal of 30% in March?

Yes, yes. But I had earmarked some of my tax return money for my vacation fund.  I also moved in February and previously didn’t own a single piece of furniture, so February and March were just spendy months and I had planned for that financial reality by allotting a good chunk of that third paycheque in March accordingly. Even so, with a little bit more planning and math-ing, this should have been an easy goal to hit.

And almost as if I knew I failed in March, my competitive streak emerged to overcompensate in April. A 33% savings rate is awesome and I can’t complain about exceeding by April goal by a couple percent.


My glorious two months of extra cash flow have come to an end, and the real test as to whether I can pull this off will come in May.

For the month of May, I am still maintaining my goal of a 32% savings rate and I can’t wait to update you next month and let you know how it’s going!

Are any of you trying to increase your savings rate right now? What is working (or not working for you)?

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