Handy Andy’s Lessons: 3 Methods to Save Money from Your Salary

I often hear that people can’t save money because they have none. For many people, this likely isn’t true. Instead, they likely don’t have the proper systems to save money. It’s not hard to learn these methods, but it can be tough to implement, and that’s why I am here to try to show you the way!

Click to jump to a section:

  1. Pay yourself first
  2. Treat savings as an expense
  3. Trick yourself into saving

Americans Lack Savings

Did you know that nearly 70% of Americans have less than $1,000 in their savings account? Check out this chart from Statista if you don’t believe me.

chart showing most Americans have very little savings

Do you know how sad this makes me? I don’t think you need to have a ton of money in your savings account, but an emergency fund and money for short-term purchases need to be put into a savings account where you can access that money quickly when needed.

If you can’t access your emergency fund immediately, then what is the point of having it?

Now you can at least put that money in a high-yield savings account to try to max out the return while it just sits there but remember, the goal of this money isn’t to grow. You just want to protect yourself if a major life changing event happens like a medical emergency or job loss.

Regardless if you’re saving for an emergency fund or simply looking to implement some methods to squeeze out a little extra cash for investing, these three tips can all be used to help get you closer to your goals!

1. Pay Yourself First

Everyone says this but nobody actually does it. Do you know what “Pay Yourself First” actually means?

If you get paid through direct deposit then this is extremely simple. You can either go to your employer and add a second bank account to transfer money to or set up automatic transfers to a different account from your main bank account. Let me explain better with real-life examples:

Let’s pretend that you make $1,500 after taxes every two weeks. If you’re currently not saving at all, maybe start with something small, like 5%, which would be $75 biweekly.

Where to Save?

First, you must decide where you want the money to go – maybe a savings account, IRA, brokerage account, 529, etc. All these accounts have an account number and a routing number that you can get simply by logging into your respective account’s website.

The primary difference between these accounts is whether they are pre- or post-tax. Pre-tax accounts such as an employer-sponsored 401K must be set up through your employer. Post-tax accounts such as high-yield savings and Roth IRAs can be set up independently. You can choose how and when to deposit funds into these accounts.

Automate It

Let’s pretend you’re trying to build up an emergency fund in an Ally high-yield savings account. How can we go about automating this process?

  • Option 1 is to talk to your HR/payroll folks about changing the direct deposit to put 5% into a different account. This is my most preferred way because it is done automatically. That $75 will automatically go into your Ally account when you’re paid and now you will get $1,425 in your normal bank account. 
  • Option 2 is to set up a recurring transfer of $75 from your regular bank account every two weeks on the day you get paid.

These options are centered around automating your saving process. If you rely on yourself to remember and be willing to save in the future, you are likely to fail. Take the future decision to save out of your hands by automating the process.

The key is you will never actually see that money in your normal checking account. I have found that this is the most effective way for me personally when I am trying to save money because rather than planning around having $1500 every 2 weeks, my mindset would automatically shift to only having $1425 every 2 weeks. 

Overall, I think that the “Pay Yourself First” strategy is the best one, but that doesn’t mean it’s the only option!

2. Treat Your Savings as an Expense

Another way to save money from your salary is to treat it as a line item in your budget. I think that this is also a great option as long as you can actually stick to it, and therein lies the problem.

When you treat the savings as an expense, you can add it as a line item to The Doctor Budget tool, and then every time you transfer money to your savings, you take 3 seconds and code that as ‘savings,’ and then you’re good to go. 

There are a few pros and cons to this vs. the “Pay Yourself First” method that I think are worth noting:


  • You get that “emotional high” of crossing a good thing off a list. It feels amazing to cross something off a To-Do list; investing is no different. Yes, you are calling it an expense, but you know you’re saving money for your future!
  • You have more control over your transfer. For instance, if something pops up in the first half of the month and you have higher expenses, you can skip that $75 transfer and then double in the second half of the month and contribute $150.


  • You might be inclined to skip a transfer as I mentioned above but instead of doubling later on, you just will never contribute that money. 
  • It takes a little bit more time to transfer the money because it’s not 100% automatic like the “Pay Yourself First” option.

Personally, I think that the cons outweigh the pros in this situation when compared to the “Pay Yourself First” strategy. This method misses out on the automation provided by paying yourself first.

I used to try to save money this way, and I was the type of person that would blow my entire budget without saving a penny. It was impossible for me to have the self-discipline to set aside money. If I had $75 at the end of the month, I would go out and blow it on something else.

Now, a large part of that was me not having a good money mindset and not being focused on my future, but also part of that was my plan. If I had paid myself first, I would’ve been able to trick myself into saving money rather than giving my weak-minded self the ability to pick how I spend my “savings.”

Budget Calendar

If you’re going to go with this option, I think that the best thing that you can do to make sure that you stay on track is to use a budget calendar.

I love budget calendars because all you’re really doing is planning your monthly expenses to ensure that you have enough money set aside.

A budget calendar simply lays out your income and fixed expenses for the month PRIOR to them occurring, therefore letting you plan. I personally use one all the time and they’re actually really easy to create and implement.

As you can see in the picture below, it’s a simple layout but can be a complete lifesaver.

budget calendar

If this intrigues you, I have a step-by-step guide on creating a budget calendar so you can implement one into your daily life. A budget calendar is really just a great process for anyone to use regardless of how you’re saving money, so it’s worth checking out.

The key is that you actually need to stick to using the budget calendar. When it gets to the time of the month to pay off expenses, you HAVE to transfer the money to your savings at that point in time.

That’s my personal experience, and I’m guessing that most people are very similar to me in that way.

3. Trick Yourself into Saving

This method is a last resort if the other methods don’t appeal to you. Download an app like Stash or Acorns that will round up to the dollar on every purchase that you make and invest it for you.

Essentially, if you purchase something for $3.20, Acorns (and Stash) can round up that purchase so it costs $4, and they put that extra $.80 into an account you can invest in.

It’s nice because every single time that you spend money, you’re also going to be saving money…unless you only buy in exactly whole dollars, lol. But at the same time, that means that for you to save money, you have to spend money.

I think this can be a great way to get people to save money without putting any extra effort in, and then you can also have it automatically invested. 

Looking back at last month, my wife and I had 66 transactions. If they were all rounded up, we would have saved $24.88. Though this isn’t huge, every little bit helps. Especially when this method requires no input from you directly.

Is it a perfect plan? No. But can it be effective? Absolutely.

If you want to implement this method in your life, check out my post comparing Stash and Acorns.

Closing Thoughts

At the end of the day, any of these three methods can be highly effective as long as you understand your mindset and implement a strategy that will give you the best chance for success. 

I frequently talk about the importance of knowing yourself when you’re investing. For example, if you believe you have a higher risk tolerance than you actually do, you can end up in bad situations. Like buying into a volatile stock, only to sell out when it takes a dip, leading to losses.

The same goes for saving. We all like to think we are incredibly disciplined and will consistently make the right decisions to succeed. However, we are all human. We make rash decisions and are too focused on the short term. The best thing you can do is take decision-making out of the process as much as possible.

My advice is to think about yourself and understand the likelihood that you will stick to your plan. Do yourself a favor and Pay Yourself First, and you’re going to be much happier for it. And maybe, consider downloading Stash or Acorns as a secondary way to ensure you’re saving!

Who said that only one answer is right to saving money?

You will eventually become an all-star saver where you get addicted to saving money, and it becomes clockwork. All you need to do is be prepared and plan for the future so you know how to act.

The worst thing you can do is delay because all investments, even the super small ones, add up dramatically over time!

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