One of the ways to determine how much you can repay toward your debt is to consider your Personal Savings Rate, or PSR. The way to figure out your PSR is to take a look at what you do not consume at the end of the month and divide it into your personal income. The resulting percentage reflects your Personal Savings Rate. In the United States, the average PSR typically hovers around the 4% mark, but given the current economic troubles has reached as high as 6% recently. By increasing your PSR, you can not only weather extended periods of economic strain, but you are better positioned to repay consumer debt.

To increase your PSR percentage, you can do a number of things. One approach would be to spend just 80% of what you normally spend on a monthly basis on discretionary living expenses. For example, if you normally spend $1,000 on entertainment and other enjoyable experiences, then you would try to make do with spending just $800. That could mean cutting out some activities or settling for no-name groceries. In addition, increasing your PSR will allow you to save enough money now to lead an abundant lifestyle at a later date, such as retirement or during the next economic downturn. In addition to reducing your living expenses, you can take any or all of the following steps:

Start By Making a Focused Effort

The easiest starting point is starting a separate savings account. Beginning with a nominal amount, say $50 of every pay check, will increase the chances of success and allow you to adapt rather easily. With time, you can increase the amount, but starting small will allow you make the necessary adjustments to your budget. More importantly, simply setting up a separate savings account allows you to mentally prepare for becoming better off financially.

Create a Budget

Putting a budget down in writing will help sustain the reduced spending in the long-term. As noted earlier, spending just 80% of your income can probably be achieved rather easily, but without an actual budget, the following months will be a lot more difficult. Creating a budget will allow you find simpler ways to live off of just 80% of your normal spending. Hint: a great place to find extra funds will be in those discretionary areas like dining out and entertainment.

Be Disciplined

Remember to practice discipline and persistence. When you decide to start improving your finances, you will find that you need to commit to it for the long-term. Plan on never reverting back to your old spending habits and you will find that your Personal Savings Rate will improve rather easily.

Remember Patience

You will need to practice patience when it comes to improving your personal savings rate. Results may take time, but they will surely appear. By practicing patience, you will find that the results will actually appear quicker than you originally thought. A best practice is to ignore the savings statements when they come in the mail until a full year or two (or more) have passed.

Don’t Forget Flexibility

Keep your flexible and open spending habits to the minimum. Now that you are on a budget, you cannot go out and buy the latest products in the market especially if you do not need them.

Monitor Progress

As with any plan, you will want to monitor your monthly spending. This might mean tallying up all expenses at the end of every day, week, or month. Or, it could mean matching your credit and savings balances to a repayment plan or some sort.

Make Adjustments

Lastly, you will want to leave room for adjustments. Every plan in life needs to incorporate flexibility if it is to succeed. If you find yourself behind plan, rely on flexibility to get yourself back on track. Flexibility is essential when it comes to maintaining a successful budget.

In summary, an increase in you PSR can guarantee long-term happiness and a minimized stress load when life throws those unexpected curve balls. Building a plan and keeping at it will afford you better control over your finances and as you start to celebrate small successes, you will never look back.