Start with saving; the spending will follow

So by adjusting our monthly automatic transfers (the only way to save, really):

• I increased my retirement savings from $200 to $300 a month (about 5%).

• I boosted our set-aside for irregular expenses from $100 to $200. Plus, by saving all our $5 bills each month, our sneaky saving strategy, we add about $150 to the cushion that covers irregular expenses (6%, overall).

• I kept $500 going toward debt (8%). When that's paid off, this money will go to retirement and long-term savings.

If you consider paying down debt to be saving money (which I do), we're now saving 13% of our gross and setting aside another 6% for irregular expenses. Even better: While these adjustments have made us more cautious about our spending, it doesn't feel like we're on a tightrope -- whereas doing it the other way always did.

The word spreads

In fact, as much as the gals resisted cutting their spending, they loved the notion of saving first. Have a look:

Beth had already discovered the power of saving after she and her husband tried to slash their committed expenses to $4,400 a month, which is about 60% of their monthly gross of $7,300. "We just couldn't do it," she says.

Plus, Beth got depressed. But, being the plucky type, she knew she couldn't just give up. So they slowly ramped up their savings:

• $403 for retirement (5.5%)

• $730 toward debt (10%)

• $280 for irregular expenses (3%)

That helped them be more disciplined about spending: "We eat out less, don't use babysitters as much; we buy more of our groceries in bulk, and just spend less on frivolous things in general," said Beth (who added that the famed West Coast wine, "Two Buck Chuck," is a real budget-saver).

Jill banks her raise

Even Jill, who has said it would be easier to squeeze out her last drop of blood than spend less of her overtaxed income, has realized the magic of saving first. She just switched jobs and got a raise of $10,000. After taxes, her net raise is $5,300 -- all of which she's now putting into savings.

Yes, that means she's saving only about 6% of her gross, but it's way better than nothing, which was last year's savings rate.

More importantly, this first step has helped Jill face the fact that she wants to save more -- so she's willing to spend less: "I've been tracking my spending and trying to cut back with regard to my lifestyle. I'm becoming more conscious," she said.

Small steps, big gains

Before you call People Magazine to tell them about our heartwarming success story, let me just add that Lyndsey-the-brave, who is already putting $600 of her $2,525 take-home pay toward her credit cards, has agreed to save an additional $50 per paycheck. She's now saving 19% of her gross. True, these are just baby steps. But what's amazing to me is that we are all taking them. (Most of us, let's be honest, like to make plans but don't always take action.)

Plus, in my experience, little steps eventually lead to hops, skips and sometimes big leaps. Who knows what we'll tackle next. Maybe that pesky federal budget deficit. The government could use a few good women to get in there and give them some pointers on overspending.

Updated Jan. 16, 2008

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