But while it’s entirely understandable how so many people found themselves in this position, the cold hard truth is that it is seriously dangerous and in urgent need of remedying.

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The first question you might have is why $1000 as a savings goal? Why not $5000 or $10,000? Or why not go bigger and have the goal of an emergency fund that covers three months of living expenses and salary?

And the answer to this is simple: if you want to develop a healthy habit, you need to start small and with a goal that’s actually achievable. No one – or at least very few people – show up to run the Melbourne Marathon without having spent months or years training to be able to run such long distances. The people who do have the confidence (read: delusion) to wing it with no preparation, invariably fail.

In an ideal world, sure, all of us would be saving at least 20 per cent of our paychecks each week. If you’re earning the median salary of $74,100, that would see you putting aside $14,820 each year.

Again, if you can and are doing that, amazing. But again, with so many people paying more on rent or mortgages, groceries, utilities, transport and other daily expenses than ever before, that option simply isn’t on the table.

The problem with knowing this is that it can lead to you feeling overwhelmed, frustrated and wondering what’s the point in trying. Which once again brings me to the point of starting small and with a goal that’s actually achievable.

Yes, $1000 is an arbitrary figure in theory. But it requires just $20.40 to be stashed away each week if you spread it out across an entire year, or $40.80 a fortnight if you can smash it out in six months.

And here’s the thing about starting small: once you start to see results, it becomes addictive. This is especially true when it comes to our financial goals and habits. When you have only $100 or $215 to your name, stopping yourself from spending it can feel pointless. After all, it’s a relatively small amount in the grand scheme of things.

But by purposefully setting aside a small portion each time you’re paid and vowing you’re not going to touch it, this mindset tends to change.

This brings us to the question of where to save your money. Personally, I’m a big fan of setting up a savings account that is separate from your everyday spending account and setting up an automatic transfer for the day you get paid.

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That way, the money is taken out before you even have the chance to spend it, and you quickly learn to budget without it – especially if it’s a small amount like $20 or $40 a week. Choosing a high-interest savings account can be great, but it’s worth checking the fine print with your bank (some have minimum monthly contribution requirements, while others may penalise you if you need to withdraw the savings before a certain amount of time has passed).

If you’re thinking you simply do not have a spare $20 per week to find, it’s worth forensically going through your spending habits. Almost always, there are big and small splurges that add up.

And at $20 a week, this looks like buying lunch once less a week, or skipping four takeaway coffees. At $40, it’s borrowing that book you wanted to read from the local library instead of buying it brand new.

I’m not giving these examples to shame people for their habits, either. Instead, it’s a reminder that small and seemingly inane purchases really do add up.

Yes, $1000 might not be the dream buffer. But if your car breaks down, your fridge breaks, or you wake up with a toothache, it’s an amount that sure will help. If it helps foster new habits that last all year, that’s even better.

Victoria Devine is an award-winning retired financial adviser, a bestselling author and host of Australia’s No.1 finance podcast, She’s on the Money. She is also founder and director of Zella Money.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their personal circumstances before making any financial decisions.

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