When Dave and I were first married and each working outside the home, we were fortunate enough to have 2 incomes. Granted, they were both very small incomes; but even still, we felt lucky to both have jobs with steady paychecks. Plus, we were used to living on a college student budget, so even our small incomes seemed like A LOT to us!
At the time we decided we would live on Dave’s income only. We committed to saving my entire paycheck for at least one full year, with the intention to use it for “large purchases” or emergencies.
Every penny I earned was directly deposited into a separate savings account, while Dave’s entire paycheck went into our checking account and paid our mortgage, all our bills, any other expenses, our investments, tithing, etc.
Our savings added up quickly!
I can remember a couple time when I wanted to take money out of our savings account — either to pay for something we didn’t quite have the money to pay for in our checking account, or just to give us a little extra “cushion” for our weekly and monthly expenses.
However, the fact that I would have actually had to go to the bank to transfer that money stopped me each time — it just would have been too much hassle as we didn’t have home internet at the time, and obviously no smart phones or online banking!
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After 1 full year of saving my entire paycheck, we had (what felt like to us) an enormous amount of money in our savings account.
Our plan for that money was to use some of it to replace my very worn-out car from high school and some of it for a few smaller home renovations. We kept the rest in our savings account — and we continued to put every penny of my income into that account.
As you can probably imagine, even with a relatively low-paying job, our savings grew ridiculously quickly with absolutely no thought or effort on our part.
The money AUTOMATICALLY went into our savings account every payday while we continued to live on Dave’s income.
And we never touched it.
Yes, we could have done more fun activities with friends, we could have gone out to eat more often, we could have spent more than $30 on groceries a week (back in the day of amazing coupons!), we could have done more home renovations, we could have traveled more, and we could have enjoyed more “luxury items”… but we didn’t.
We survived on Dave’s fairly small income, and we created the invaluable habit of prioritizing our savings.
We saved first… and made due with whatever money we had left.
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I can remember feeling a little stressed whenever our checking account was low (especially in those first few very low-income years) — counting how many days until Dave’s next paycheck, doing mental math as to if we would have enough to cover the bills, groceries, etc. — all the while, having thousands of dollars just sitting in our savings account.
As I mentioned above, there were a couple times when I knew it would be so easy to just take some of the money out of our savings account to give us a little more breathing room… but I’m so glad we didn’t “cheat”. We basically both decided that using the money in our savings account wasn’t even an option (outside of our larger planned purchases) unless we had a true emergency.
So the money just sat there gathering a little interest and waiting for our planned purchases.
Now, 10 years into our marriage, we still handle our savings in much the same way.
Almost all the money I make goes into our savings account, while Dave’s income goes into our checking account to pay all our daily, weekly, and monthly bills and expenses — including tithing and all our investing. We then use the money in our savings account to pay in-full for all our house projects, landscape renovations, new-to-us vehicles, and large principal-only payments on our mortgage.
Now that we are basically finished with all those bigger house/yard/car expenses (we have a couple more home renovations to tackle eventually — but nothing major) our plan is to use the money in our savings account to pay our children’s school tuition, save up for family vacations, maintain a large emergency fund, and hopefully get a pool in a couple years!
Even though Dave and I both know there is money in the savings account, and even though I could easily transfer money to our checking account in about 10 seconds (either from my phone or computer), I just don’t do it.
I guess after 10 years of saving FIRST, it has become a habit to reserve my income for larger planned purchases (or keep it on hand for emergencies).
NOTE: We don’t actually keep it all in our low-interest savings account now. We have some in money markets and other more “liquid” investments so the money is actually earning more than it would just sitting in our bank account.
Obviously, if our income source or amount drastically changes at some point, we will have to reevaluate how we structure our savings and spending (and probably our entire budget); but for the time being, saving my income and living off Dave’s income seems to be the best, easiest, simplest, most effective way for us to quickly build up our savings account each year.
I realize this exact setup won’t work for every household — the important thing (in my opinion) is putting the savings away FIRST — before you even pay your bills or buy gas and groceries.
Even if it’s not your full paycheck, the habit of putting SOMETHING into your savings account before you spend any other money that month will ultimately help you grow your savings account so much faster than if you wait to “see if you have anything left over at the end of the month”. Because you know as well as I do that there often isn’t very much “left over” at the end of the month!
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I am not a financial expert, I have no formal training in this field, I don’t regularly read books or do extensive research on financial topics, and I don’t follow any “financial gurus”. However, I’ve always been good at saving my money… and I have a feeling most of you would be happy to have little extra money in your savings account.
Right?
Do you save FIRST? If not, try it for a few months… then let me know if it made any difference for you!
Joy says
This is cool and awesome! When I was a kid I was very good in saving money, even when I was still single. Now that I’m a mom and a stay-at-home at that, I make every effort to save. Hope one day we’ll have the financial freedom that seem so elusive.
As always, thanks for sharing helpful tips. Blessings on you and yours! 🙂
Mary Campbell says
I worked way too much in my 20s, 30s, and 40s. Good money and no time or interest for/in shopping. I saved every second paycheck. When I lost my job at 50, I couldn’t find any motivation to get back in the saddle of seventy hour work weeks. And I had enough not to need paid work. I’ve had a great time volunteering and doing lots of things I never had time for–gardening, canning, fostering dogs, quilting.
Andrea says
This is a cool idea — saving every 2nd paycheck. Seems to have worked well for you too!
Shelley Fessinger says
Andrea, We are VERY similar people–from raising our kids, living a simple life (only you are WAY better at this!), finances and priorities! Only I didn’t start living like this until about 10 years ago! And, I am now 49! I bought my kids WAY too many new clothes and I didn’t simplify Christmas/Birthdays when they were your kids ages! And I LOVE how you do that! Even though most of my “child raising” is over…only one senior in high school left at home, I am still always inspired by your tips and comments, etc. I only wish my daughters had the time/interest to follow your blog (they are only 18, 19 and 21) but I hope they raise their families just like you do/have! Not that they won’t eventually appreciate this blog, but they obviously are still in another world–high school (college apps) and college fun! (And, stress! Ha). I hope that whey they start their families, your blog will still be running or I have access to archives for them!
You have a beautiful outlook on life. A beautiful family. And you are just a beautiful soul! You are so fortunate to already be where you are at your young age!!
RE: the Savings–I do the same (I actually think working our finances/budget/savings is FUN!) I take out probably half of my husband’s earnings (we are both attorneys but I quit to raise my girls), and deposit it into our savings account –I call it an Escrow Account. And I budget usually months in advance…For example, if I am saying $xx amount for Christmas or College Application fees ($70 a pop!) or a car, I put that money aside for several months ahead of when we need it and then I pull it out IF I need it at the time. Often times, I don’t need to access this account at all; rather, I use that other half of income from our checking account and then my savings/escrow keeps building. Then, I pay the bills and keep $x amount for our groceries, gas, fun etc. I rarely ever need to draw out from Savings but it’s a nice buffer. After YEARS of doing this, and just like you, I know it’s there with the click of my track pad, I just never do. When things get low, I cut back until the next payday!! 🙂
Andrea says
Thanks so much Shelley!
I’m glad you shared a bit of your story — and honestly, “better late than never” right?? Starting your frugal journey at 39 really isn’t so late either. I know plenty of people who don’t even start thinking about funding their retirement (let alone savings accounts) until they are in the 40’s. So you’re WAY ahead of the game 🙂
Cynthia says
Awesome tip and good job. I’ve done something similar. Since 2003, my salary has more than doubled, but I have never expanded my lifestyle. Every time I got an increase, a bonus, a tax refund, I divided it in 1/2. Half went directly to one money market for savings and emergencies (nest egg), the other half went to my home improvement fund. Like Andrea and Dave, I like to pay for things in cash when I can afford them. Once I had the cash, I renovated my townhouse (aka…The Crap Shack). Then I continued to put that extra money into the same money market but it was now called “Paying off the mortgage”. Last month, I paid off my mortgage 17 years early. So I splurged and now have Netflix so I can watch the Gilmore Girls Revival. LOL. Anyone can do this – it’s all about priorities.
And good job, Andrea. You are an inspiration!
Andrea says
haha — love that! We “splurged” on Netflix too — although we canceled cable which was a lot more than Netflix, so we are still coming out ahead!
Trixie says
I retired at a pretty young age and people seem to think I must either be a financial genious or a lottery winner….. Neither of those. Just have always done what you outline here. I’ve lived on far less than I made (which was NOT a lot… the average public school teacher salary in our state is 1.5x more than my highest salary). But consistantly saving, investing and ENJOYING life while spending less is what it’s all about!
Cynthia says
That is amazing, Trixie! What are you doing during your retirement!
Andrea says
exactly! good for you!
Olga says
You are just one amazing, and by the way very beautiful, young family! May God continue to bless you and your family in every possible way of your life!
I think that most of young couples could benefit from this post. Including myself. 🙂 It’s especially hard to place limits for spending on “nothing” when one has more than enough of easily accessible funds. Separate savings and investment sound like a good idea.
I would love to learn more about different investment plans.
Andrea says
Thanks Olga. We definitely wouldn’t have been able to save as much if we didn’t have separate accounts. As for the investments, just search for (or ask around for) an investment agent in your area. They should be able to answer any questions you have.
Christine from The (mostly) Simple Life says
This is so smart! If you’re used to it from the start it’s not a big adjustment to save so much. I’m thankful that we had such a low income at the beginning of our marriage because we learned to live on very little. Now that we make more, we’re grateful for more wiggle room in our budget while still saving more than most.
Andrea says
Yes, I do think it is A LOT easier if you start out this way — but I also don’t think it’s impossible to retrain yourself to save more (even if you’ve been spending, spending, spending your whole adult life)!
Mary Ann says
We made the choice to save my income when we were first married and it was a great decision! We lived very frugally (and still do) to make it work! Nowadays, the way our income comes in is a little different (several paychecks instead of just one per person) so our goal is to always save the money from one income stream. Earlier this year for about 6 months, I babysat my friend’s 2 children in the mornings before going to my “regular” job. That income went straight to savings and it was so nice to see the numbers rise in our savings account.
Even small amounts of money saved diligently over an extended period of time add up eventually!
Rose says
Love today’s post!!! Sooo true!
Brenda says
One easy way to help with this is to set up a new savings account at a bank/credit union that is across town. Then don’t get a debit card or checks or online banking for this account. This way you are forced to drive out of your way to do anything. Making it difficult to access the money quickly (within minutes) makes it easier to save and “forget” about it! But its still fairly easy to access in a true emergency (drive “all the way” across town to go to the bank, in person, Monday-Friday between 9am and 5pm).
Andrea says
yes, this is a great tips!! thanks for sharing Brenda!