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How One Little Tip Will Help you Save Money like a Ninja

automate saving for best result

Saving Ninja

This is a guest post from Dee at SmallHouseLife.com.

We all know we’re supposed to pay ourselves first when saving money.  That’s what everybody tells us to put aside whatever money we have allocated for savings, and then disburse the rest according to our budget.

Sounds simple, right?  Maybe some of you are pretty good at it, but personally I have a tendency not to follow through when I have a pile of bills staring me in the face.

I will share with you one simple saving tip that not only forced hubby and I to save big time, but eventually made it possible for us to quit our day jobs and go into business for ourselves.

If you’re employed (or your spouse is), ask the employer to take money directly out of your paycheck and deposit it into a company savings account.  If you’re self-employed, stick with me because there is a plan for you.

You might wonder what’s the difference between this tip and simply paying yourself first?  There is a huge difference between having to take action to create the savings.. as opposed to setting up an automated system that does the saving for you.  With this method you actually have to take action not to save.

Prior to setting up our savings in this manner, my husband and I never could seem to save a substantial amount of money.  Just a few years after putting this plan into place, we’d saved enough to quit our jobs and move to the Texas Hill Country to live our dream.

What if the employer won’t do this, or you’re self employed?

Saving Money Like a Ninja with an employer:

You have a couple of options.  The best one is to see if they will automatically deposit your paycheck into your bank.  Depending on your bank, it can be received as a split tender where the predetermined savings goes into one account and the remainder into another one.

If your bank doesn’t offer that service, then set it up where once the paycheck hits your bank account, the savings is automatically transferred to your savings account.  Every bank I know will do this, so if yours doesn’t, you might want to consider a new one.

What if (by slim chance) your employer won’t do an auto deposit?  This is a bit trickier, because now you have to deposit the check yourself. The most important part is for you not to have to take a step to put the funds into the savings.  Because that’s where it gets too tempting to save a little less ‘just this month.’  So if you have to deposit the check yourself, have it set up with your bank that once the check hits your account, the savings are automatically moved into a separate savings account.

Saving Money Like a Ninja for the self employed:

Depending on your source of income, you’ll either have to deposit the check yourself for the bank to divide. Or, if you work online, every income source I’m aware of will automatically deposit your checks for you.  Once the check(s) are deposited, the system you’ve set up with your bank will automatically separate your savings from your household income.

Now here’s the really fun part.  Once you’ve had this system in place for awhile and you’re feeling pretty good about yourself then increase the savings amount.

When hubby and I implemented this plan, I worked at Neimans (on commission) and my husband waited tables.  We had a modest starter home and one child.. soon to be two.  Needless to say, we did not have much extra cash to set aside for savings. And yet, we had a big dream to leave Houston and our jobs… to forge a simpler life so we could be with our kids more and homeschool them.

We started out just saving a little.  I honestly don’t remember how much, but what I do remember is that every time we were comfortable with the remaining income, we would increase our savings.  Maybe $25.. another time $100..just depending on how brave we felt.  Towards the end, we were receiving just $400. per month from my check and we lived on that plus my husbands tips.  All the rest went into savings!

We absolutely could not have done it without the savings going directly into an account we didn’t ‘see.’  I encourage you to try it.  Even for ninety days. My guess is that you will be very pleasantly surprised.

Bonus Tip: I firmly believe that we need to be clear on our ‘why.’  What is the point of the savings anyway?  Is it to finally have some financial security?  Buy a home? Pay cash for a car?  The clearer our ‘why’ is, the easier it is to stay the course.

You’ll find Dee at SmallHouseLife.com enjoying downsizing to a small home while having fun writing about the small house lifestyle.

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{ 32 comments… add one }
  • Carrie March 21, 2012, 6:01 am

    I totally agree with this. It works like a charm for us. We also have our mortgage set up to take out a certain dollar amount extra every month. It automatically comes out and we’re none the wiser.

    • Dee@ Small House Life March 21, 2012, 7:53 am

      Hi Carrie!

      Well that’s a brilliant idea I’ve never thought of..

      I’m assuming you direct the mortgage co. to apply the extra payment to principle?


      • retirebyforty March 21, 2012, 3:56 pm

        I’m doing the extra payment on the mortgage automatically too. That way we don’t have to think about it.

  • Modest Money March 21, 2012, 6:20 am

    Very good tip Dee, especially the part of gradually increasing the amount that automatically get redirected to your savings. I have something like this setup, but I’ll have to remember to increase the amount once I go back to working a day job.

  • Well Heeled Blog March 21, 2012, 7:22 am

    Thank you for introducing me to Dee! I’ve been a little obsessed with small houses / living lately… can’t wait to get over to her blog.

    • Dee@ Small House Life March 21, 2012, 7:57 am

      A couple of years ago my husband and I had just completed our big dream home, when we thought, what the heck are we doing? We looked at our assets and realized that if we downsized our home, we could have so much MORE in life.

      Downsizing also fit perfectly with our ‘no waste’ mentality.

      When you say you’re obsessed with ‘small houses’ do you mean the tiny houses? ..or small as in downsizing to ‘smaller’


      • retirebyforty March 21, 2012, 3:57 pm

        We downsized 5 years ago to a smaller place, but the mortgage was bigger. 🙁
        The location is much better, but that probably wasn’t the wisest decision.

      • Well Heeled Blog March 21, 2012, 7:06 pm

        I don’t know what qualifies as “tiny”, but I’d like a house of 1,000-1,500 sq. ft. when I buy. I don’t mind have a 2-bedroom house (would love to have 2 baths too, including a master en suite), but I think there are way more 3-bedroom houses out there than 2 bedrooms.

        • Dee@ Small House Life March 22, 2012, 6:54 am

          “tiny” is whatever works for you.. but I’m always interested if when pp say “small” they’re thinking of the “tiny houses” (like Tumbleweed) or if it’s like you’re saying.. what works for you is approx 1000-1500..

          Cause right now my husband and I are considering our ‘final’ (hah, but we’re builders so who knows!).. anyway, our final house downsize.. and it’s looking to be about 1600-1800 sq. ft.

  • Broke Professionals March 21, 2012, 9:26 am

    Haha, I like anything about ninjas 🙂 My husband and I have always been good savers, but we tend to save after the fact than before (although investing is the exception – we pull that directly out of our paychecks at the beginning of each month, not the end).

  • Michelle March 21, 2012, 10:16 am

    This is something we need to work on. We don’t have anything that directly comes out of our paychecks right now.

    • Dee@ Small House Life March 21, 2012, 11:38 am

      When I left Neimans Michelle, everyone was dumbfounded that my husband and I were quitting our jobs to pursue our dreams. They knew my husband was a waiter and they just couldn’t figure it out.

      This automatic savings method was THE only way we succeeded.

      I highly encourage you to start even if it’s $25. bucks.. $10 dollars.. anything just to get the habit in motion, and later you can add to it.

      dee 🙂

      • retirebyforty March 21, 2012, 3:58 pm

        I automate the 401k contribution, but I manage the rest myself. Automating saving is good, but I like to be hands on. 🙂

  • Steve March 21, 2012, 10:38 am

    My wife and I bought our first house last Fall and it feels like we’re not saving money any more. But we’re still contributing to our 403(b) and 401(k), respectively, so we’re still saving a quite adequate percentage of our income. It just doesn’t feel like it!

    • Dee@ Small House Life March 22, 2012, 7:13 am

      I feel your pain Steve!

      Sometimes owning a house can feel like a money pit. I mean every time I go to Home Depot to buy plants I end up spending at least $100.

      And then you have empty spaces and blank walls to fill.. etc.

      That’s why I am SO into simplifying.. Like I love to cook, but people are always amazed with how few pots, pans, gadgets I have.

      Is it possible for you to downsize to a smaller home when you’re at the 2 yr. mark (so you won’t have to pay taxes on profit)?

      • Steve March 22, 2012, 8:33 am

        We bought a house that is the right size for us, and with the various friction costs of moving, we don’t plan to do it any time soon. Hopefully the purchases (e.g. appliances) and fixes (not just painting, but we also put on a new roof and had electrical and plumbing work done) are behind us now.

        It’s just funny because last summer I was struggling with finding things to spend our money on. I know that sounds silly. But we already travel to the limit of my vacation time and we had a kid, so there wasn’t much else I could think of. Well, I guess we came up with something!

  • Dollar D @ The Dollar Disciple March 21, 2012, 1:10 pm

    I’m kind of in the opposite camp. I get big kick out of moving money manually towards my savings and investing. We have a buffer of one month’s salary in checking which makes it easy to transfer all the funds to all the different places on the first of the month.

    We do use automated savings for a lot of our savings goals and it’s great! We are about to go on vacation to europe using money that we saved over 2 years. Autopilot is powerful!

    • Dee@ Small House Life March 21, 2012, 2:56 pm

      Absolutely, for those who have the discipline to carry thru every month.. then this method isn’t necessary.

      Good for you! dee

  • CultOfMoney March 21, 2012, 3:37 pm

    This is the method that I use for my employer retirement account. A certain % comes out each paycheck, and I never see it. It’s like depositing into the future. I think in general the automated finances are important. Thanks for the post!

  • Michelle March 21, 2012, 4:33 pm

    My brilliant husband is already doing something like this. Who knew? He’s a ninja! He set up a staging account that automatically takes out half our mortgage payment, so we can budget the month more easily. I like your bonus tip as well. Goals are so important. Right now, we are just getting out of debt, but one day we will need to prioritize our wish list and start saving for the things we want before we buy them (novel idea, right?!)

    • Dee@ Small House Life March 22, 2012, 6:59 am

      Your husband is a ninja! LOL

      The cool thing about getting out of debt is that it tends to snowball.. Once you pay off a $400. monthly bill for example, you can use the $400. to pay off something else and before you know it, you’re free!

      Hey, why wait to make that wish list? It’s SO much more fun to have one now! Plus it gives you time to really think about what you wish for.. 🙂


  • krantcents March 21, 2012, 5:48 pm

    I started doing this in 1973, probably before 99% of you were born! It works very well. I started it to have the funds for the annual payments for my first house such as property taxes and insurance.

  • SB @ One Cent At A Time March 21, 2012, 6:13 pm

    Automatically…is my automatic way as well. I have different investment account with installment investment plan, the money gets deposited their every month out of my checking account. We get to enjoy with rest of it left behind.

  • MoneyCone March 22, 2012, 9:32 am

    The same reason why putting an extra on your mortgage works. You could wait till you have a windfall to pay for your house, but you’ll probably never do it! Make it automatic.

  • SavvyFinancialLatina March 22, 2012, 4:07 pm

    Thanks for the tip!!!

  • Cherleen @ My Personal Finance Journey March 22, 2012, 5:18 pm

    I have several accounts and each of them have special purpose — retirement, emergency, downpayment for the house, college tuition for the kids, etc. They are all linked to my personal account and everything is automatically transferred to each account at the end of the month. Whatever is left on my personal account is the budget for the month.

    • Dee@ Small Houses March 27, 2012, 4:36 am

      Wow Cherleen.. You are disciplined girl!

      I’ll have to go check out your site because I’m very curious what your ‘destination’ is?

      dee 🙂

  • When I was employed full-time, we had a portion of the check deposited in savings, and a portion deposited in checking. After a few pay periods, I forgot that I was “missing” the money from my check that went into savings, so this strategy absolutely worked.

    Now, I am self-employed, but I have one client who deposits the money straight to my account. I think I will change my banking info and have them deposit it straight to my savings instead. Thanks for the tip!

  • Dee@ Small Houses March 27, 2012, 4:41 am


    Yeah, that’s exactly what we had our son do.. He makes a bunch of money on the Internet from different accounts but then come tax time, he scrambled. (Not saying you do) …But we had him split off one “client per se” and that income goes into a separate account for taxes.

    It’s just all about setting ourselves up for success, right?

    dee 🙂

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