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My favorite money-saving tip that takes only 5-minutes but can save you hundreds (or thousands)

Updated: Mar 2, 2023

Warren Buffett, one of the world’s most successful investors has been quoted saying, “Do not save what is left after spending, but spend what is left after saving.” With a net worth over $100 billion, I think the man was onto something.



Now, I’m not saying you’re likely to grow your net worth to over $100 billion by saving in various cash buckets, that’s where investing comes in, but learning how to save regularly and without tapping into it for reasons outside the purpose of the account (Emergency savings are for emergencies – not to cover expenses from a shopping spree that pushed you to exceed your budget!) is where you’ll start to gain some real traction with building your cash cushions, whatever they’re for; emergency savings, home down payment, fertility treatments, travel, etc.


One of my favorite tips to paying yourself first, and saving before you have a chance to spend it, is to split your paycheck between your checking and saving(s) accounts. Exactly as it sounds, this means that a specific dollar amount, selected by you, goes into a separate bank account than the rest of your pay.

I love this method of saving because not only does it allow you to save a regular and consistent amount, but naturally it helps you spend less. Less in your checking account = less to spend, and while that might take a couple weeks to get used to, you’ll be surprised how easily you can adjust, especially knowing you’re paying yourself first.


How to do it:

Depending on how your company’s payroll is setup, all you need to do is either reach out to HR and ask for the form to fill out to accomplish what I explain below, or if you have ability to login to your company system and make updates to your pay, such as withholdings or bank account information, it’s likely you’ll be able to split your paycheck there, as well.

As an example, below is a screenshot of how my pay is setup through Gusto. I’ve established my paycheck to be split between our Primary Checking account and our Project Savings account. Gusto allows for nicknames to be assigned to different bank accounts so that it shows up on my paystub easily distinguishable from the other(s), as multiple splits can be established here. This means I could split my pay between checking (the account we pay our bills from), project savings (for house projects we are saving for), emergency savings (my husband is saving in this account with a paycheck split he established!), and other fun goals, such as travel or a new car.

You can select any dollar amount you want, and some payroll systems give you the ability to select a percentage. This is especially helpful if your pay is variable, or fluctuates from paycheck to paycheck.

Start with $50 per pay period and, if you're paid bi-weekly or 26 times per year, that's $1,300 you can save without having to do anything other than setup this paycheck split. Easy-peasy, wouldn't you say?

This is probably the most hands-off, effective way to save on a recurring basis for whatever savings goal you're trying to achieve, which makes it my most favorite savings tip to share.


What do you think?

Going to get this setup tomorrow? Let me know in the comments if you're going to set this up, or if you have any questions.


Cheering you on! ☕♥️

Marie


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1 Comment


Manuel Álvarez
Manuel Álvarez
Mar 27, 2023

Hi Marie, this is great. Are there any real benefits to doing it this way versus scheduling periodic transfers to those savings accounts from your checking account on your pay date?

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