I want to save half my income

[Anonymous]

Is this plan a good way to see if I can do it, or at least see how close to that I can get? I get paid every two weeks (26 paychecks per year), and have about 20k in savings. Here's my plan:

At the start of August, pay all monthly bills. (rent, cell, cable - health ins. is taken directly from my paycheck).
Then take out in cash all the money that remains from one paycheck. So if my paycheck is $1750, I'd pay $1450 in bills at the start of the month, and then live off $300.

Is there anything I'm not thinking of? I piss away a LOT of money on eating out. So I'd like to start getting better about bringing breakfast to work instead of going into a shop to bring it to the office. Same with lunch. I'd be happy with all the money I was saving enough that it'd make up for the sadness of not eating out all the time (which I love to do).

[Anonymous]

Anonymous wrote:Is this plan a good way to see if I can do it, or at least see how close to that I can get? I get paid every two weeks (26 paychecks per year), and have about 20k in savings. Here's my plan:

At the start of August, pay all monthly bills. (rent, cell, cable - health ins. is taken directly from my paycheck).
Then take out in cash all the money that remains from one paycheck. So if my paycheck is $1750, I'd pay $1450 in bills at the start of the month, and then live off $300.

Is there anything I'm not thinking of? I piss away a LOT of money on eating out. So I'd like to start getting better about bringing breakfast to work instead of going into a shop to bring it to the office. Same with lunch. I'd be happy with all the money I was saving enough that it'd make up for the sadness of not eating out all the time (which I love to do).

emergencies and unplanned expenses always crop up. Just had to pay $1300 for crown on tooth. Put a dent in the savings plan.

[Anonymous]

Try it. Worst thing that happens is that you find out you can't.

[Anonymous]

Just try it. We don't know if you have kids, a spouse, childcare, health issues, etc. just save whatever you can.

[Anonymous]

"want" vs "must" is the difference.

Often people don't have the discipline to do so.

And what are you going to do with the other paycheck? Invest?

[Anonymous]

Anonymous wrote:"want" vs "must" is the difference.

Often people don't have the discipline to do so.

And what are you going to do with the other paycheck? Invest?

I haven't gotten there yet. Right now I have the $20k I've saved up in a savings account. I just log into my bank every so often and move money out of my checking account. But I have no SYSTEM for how much I move, or when I move it, or what to do with the money in the savings account. If there's a system, I can follow it. But when there's not, I'm all willy-nilly. As I am now.

[Anonymous]

Ah. Setup automatic transfers, OP. That way the money isn't there to spend in the first place!

[Anonymous]

Anonymous wrote:Ah. Setup automatic transfers, OP. That way the money isn't there to spend in the first place!

This. I'm a big advocate of having Bills and Emergencies money on a completely different debit card than the Groceries and Going Out money. It really simplifies your budgeting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ah. Setup automatic transfers, OP. That way the money isn't there to spend in the first place!

This. I'm a big advocate of having Bills and Emergencies money on a completely different debit card than the Groceries and Going Out money. It really simplifies your budgeting.

Right now I have one checking account and one savings account that are connected to each other. That is one more account than I am comfortable having. So I am definitely hesitant to go opening a third account. My bills have to be paid out of my checking account. And my ATM card is connected to the checking account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ah. Setup automatic transfers, OP. That way the money isn't there to spend in the first place!

This. I'm a big advocate of having Bills and Emergencies money on a completely different debit card than the Groceries and Going Out money. It really simplifies your budgeting.

Right now I have one checking account and one savings account that are connected to each other. That is one more account than I am comfortable having. So I am definitely hesitant to go opening a third account. My bills have to be paid out of my checking account. And my ATM card is connected to the checking account.

To each his own. I have about 12 different online savings accounts for budgeting purposes. They aren't tied to an ATM card, so I can't access the money readily.

[Anonymous]

OP, you may be able to allocate your paycheck so it's deposited into two different accounts - checking and savings. My company's payroll system allows for this, and I have about $100 from every paycheck deposited into a separate savings account that we are using to just save for a big vacation. No transfer needed, it just goes in automatically when I get paid.

Also, if you get a raise, save your raise - just send the increase to your savings account as well. If you finish making installment payments on something (car, credit card), put that money in savings.

Good luck.

[Anonymous]

I also have multiple savings accounts for different purposes - emergency savings, short term savings for extra repairs & vaca costs, one for saving for a new car. My bank doesn't care, and on-line I can easily see (and label) all of them.

In any event, one way I do forced savings is to have all my reimbursements (essentially, any check I receive) put into my short term savings account. So reimbursements from work for cell phone and transportation, and from my health insurance company if I pay out of pocket and submit for reimbursement, and from my company's cafeteria plan. Since I set aside the max for childcare & medical in that, I can save about 10K/year this way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ah. Setup automatic transfers, OP. That way the money isn't there to spend in the first place!

This. I'm a big advocate of having Bills and Emergencies money on a completely different debit card than the Groceries and Going Out money. It really simplifies your budgeting.

Right now I have one checking account and one savings account that are connected to each other. That is one more account than I am comfortable having. So I am definitely hesitant to go opening a third account. My bills have to be paid out of my checking account. And my ATM card is connected to the checking account.

Why is more than one account uncomfortable? I have several, plus investment accounts, and there's no downside.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ah. Setup automatic transfers, OP. That way the money isn't there to spend in the first place!

This. I'm a big advocate of having Bills and Emergencies money on a completely different debit card than the Groceries and Going Out money. It really simplifies your budgeting.

Right now I have one checking account and one savings account that are connected to each other. That is one more account than I am comfortable having. So I am definitely hesitant to go opening a third account. My bills have to be paid out of my checking account. And my ATM card is connected to the checking account.

Why is more than one account uncomfortable? I have several, plus investment accounts, and there's no downside.

Because I've got a lot of learning disabilities and one of the things I do to work around them is to keep things as simple as possible. The less to keep track of the better. The fewer things to remember, the better. I'm not an impulsive shopper, and have no problem at all with being told something like "each time you get a paycheck, immediately move $700 of that to the savings account" or whatever. That's one instruction, it's simple, I understand when to do it, I understand how to do it. If I had several savings accounts I'd be forever screwing up which one is for which purpose.

[Anonymous]

Another solution is to use old-fashioned cash as a way to help you slow down spending and speed up savings. Have your paycheck auto-deposited, and then take out cash needed for your budget purposes (other than listed Must-pay bills). Just spend those piles, when they are out, they are out. Debit and credit cards make spending too easy. And wait a day on any impulse-like purchase. 99 percent of the time you won't buy it the next day.