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

I often times will hear that people can’t save money because they simply don’t have any.  Well, it’s not necessarily that I think people are lying about this, but I really think that they simply just don’t know how to save money from salary.  It’s not hard to learn but it can be extremely tough to implement, and that’s why I am here to try to show you the way!

Did you know that nearly 70% of Americans have less than $1000 in their savings account?  Seriously.  It’s not a lie.  Checkout this chart from Statista if you don’t believe me:

Do you know how sad this makes me?  You HAVE to have more savings than this for emergency purposes at a minimum.  I don’t think that you need to have a ton of money in your savings account, but an emergency fund and short-term purchases both need to be put into a savings account or something where you can access that money extremely quickly when you need it.

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

Exactly – there isn’t one.

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’re just wanting to protect yourself if a major life changing event happens like a medical emergency or a 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 you get you closer to your goals!

Pay Yourself First

Everyone says this but nobody actually does it.  Do you know what pay yourself first actually means?

It means to pay yourself first.  Plain and simple.  No ifs, ands or buts about it.

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 you can setup 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 2 weeks, or biweekly.  If you’re currently not saving at all, maybe you start with something small, like 5%, which would be $75 on a biweekly basis.

First you need to decide where you want the money to go – maybe a savings account, IRA, brokerage account, 529, etc., but all of those are going to have an account number and a routing number that you can get simply by logging into your respective accounts website. 

Let’s pretend you’re trying to build up an emergency fund with Ally so you are using a high-yield savings account.

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 then it is just 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 setup a reoccurring transfer every two weeks from your normal bank account to Ally for $75. 

Honestly, this option is really just as good as Option 1 in my eyes.  If you get paid every other Thursday, simply just setup your automatic transfer to occur every other Thursday as well, that way it happens right when you get paid and you never actually see that money in your normal account.

And that is the key – 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 just 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!

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 simply add it as a line item to The Doctor Budget 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 and it’s no different with investing.  Yes, you are calling it an expense, but you know that you’re actually just saving money for your future!
  • You have more control over your transfer.  For instance, if something pops up 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 comparing to the ‘Pay Yourself First’ strategy and that’s what scares me a little bit.  I think it would just be too easy to completely skip the transfer altogether.

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 actually set aside money.  If I had $75 at the end of the month, I would just go out and blow it on something else.

Now, a large part of that was me just not having a good money-mindset and not being focused on my future, but also part of that was my plan.  I knew that I was going to blow my money if I had extra so if I had paid myself first then I would’ve been able to essentially trick myself into saving money rather than giving my weak minded self the ability to pick how I spend my ‘savings’ money.

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 that you’re really doing is planning your expenses for the month to make sure that you have enough money set aside.

A budget calendar simply just 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 very simple layout but can be a complete lifesaver.

If this intrigues you at all, I have a step-by-step guide of how to create a budget calendar so you can implement one into your daily life, and honestly 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 and when it gets to that point in the month, you HAVE to transfer the money to your savings at that point in time.  If you don’t, I bet that you won’t ever make it up.

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

But guess what, there’s a third option that you can use as well!

Trick Yourself into Saving

This one is worth using if it’s the only way that you’re going to save your money but it can be a very effective method.  Essentially, I am recommending that 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 what happens is that if you purchase something for $3.20, then Acorns (and Stash) can round up that purchase so it costs $4, and they put that extra $.80 into an account that 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 even dollars lol.  But at the same time, that means that for you to save money, you have to spend money as well.

I think that 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 as well. 

Personally, I know that this isn’t the best plan for me because I take any leftover money at the end of the month and then add it to whatever the most efficient account/use is, but I know that not everyone is like that.

In fact, as I mentioned, I used to not even be like that.  I told the story how I used to just blow any money at the end of the month so at least this would protect me a little bit from that.  On average, my wife and I make about 60-75 transactions each month.  I know that’s a lot lol.  Most of them are buying things one at a time on Amazon since shipping is free (after you pay $120 for prime or whatever) so it’s a bit misleading, but still.

I looked back at the last month and we had 66 transactions and if they were all rounded up, we would’ve saved $24.88 that month.  If our goal was to save $150/month ($75/2 weeks) then we would’ve been way short. 

But on the flip side, if I did this when I graduated from college, I would’ve saved $24.88 more than I did any other way. 

So, is it a perfect plan?  No.  But can it be effective?  Absolutely.

If you find yourself in a similar situation that I describe about myself when I was younger then you should definitely consider using Stash or Acorns.

Now, which one is the best between Stash and Acorns? 

Well, that’s something that can change based on your specific situation, so I’d recommend doing your own research (or you can save yourself some time and read my review on them).

At the end of the day, any of these three methods can be extremely effective as long as you understand your own mindset and are implementing a method that is going to give you the best chance for success. 

I oftentimes will talk about the importance of knowing yourself when you’re investing because if you think you have a strong risk tolerance and you actually don’t then you’re inevitably going to invest in super risky stocks and sell at a low point, right when you should buy more.

The same is with saving.  If you think you have a ton of dedication and are super motivated to make changes in your life but you actually aren’t, then you’re not going to save any money.  And it will likely be months until you actually realize that you’re not saving any money and then you just wasted a ton of time.

My advice is to really think about yourself and understand the likelihood that you’re going to stick to your plan.  Do yourself a favor and just 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 make sure that 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 that you can do is delay because all investments, even the super small ones, add up dramatically over time!

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