The Best Money-Saving Idea EVER (According to Me)

There are a lot of money saving ideas out there, but I’ve got the best money-saving idea ever.

Ready for it?

Open a high-yield savings account and deposit at least 10% of your income to it automatically every single time you so much as make a dime.

That’s it. Really.

I know, I’m queen of the obvious, but at least I’m doing it on purpose this time.

You see, ask most people for ways to save money, and they’ll respond with things like cut your cable, ask for discounts, or skip the daily latte. (And I’m guilty of saying things like that too.)

While those tried-and-true suggestions are helpful in reducing spending, they don’t necessarily have anything to do with saving money for the purposes of building a solid financial foundation. Worse, they sometimes cause people to focus on the wrong thing.

Focus on what you want to achieve, not on what you want to be doing less of.

Ok, so maybe you’re reducing spending so that you’ll have more money available for debt repayment. That’s great, as long as you automatically and immediately put that money toward your debts. Realistically, most people don’t do that.

Instead, we think that since we’re doing without cable now, it won’t hurt to go out to dinner this once. And then another time, and another… Or an emergency happens, and we don’t have the money. We end up further in debt, only now we don’t have cable. (Yeah, I’m speaking from personal experience here — except I never cared about cable in the first place.)

But when you have a fully-funded emergency fund (on top of your retirement fund) and plenty of spending money to do and buy things, some interesting things happen.

You don’t make choices out of fear or desperation that turn out to be not so good (and that end up costing you money.) You find yourself in a position of strength. You’re better prepared. You have less stress. (And you’re able to get some good deals too on the things you buy.)

Literally putting money into savings right off the top yields amazing results. That’s why I think it truly is the best money-saving idea ever.

(I know, 10% on top of retirement may sound like a complete pipe dream to many people, but it doesn’t have to be. I’ll write more on that at a later date.)


  • Basically I agree with you. I hope to see you elaborate “on top of retirement.” For some, if they max out their 401 and IRA opportunities they are already saving a considerable percentage of their income.

    While I didn’t learn the concept until late in life, I am approaching 20% total savings consistently. In fact the first rule my children learned is always save 20%.

  • I don’t think its as obvious as you think. Lots of people just don’t know any better.

    Step 1 is get out of debt, step two is spend less than you make, step three is get the extra money you have to make additional money for you.

    Lots of people don’t make it all the way to step three.

    Great post

  • I actually put 10% of my salary in 401k and then another 10% goes into a credit union savings account. I won’t say that I don’t dip into it now & again, but it has saved me in some emergency situations. Also, if I have a trip coming up and I think I might be a little short, I would rather grab $150 out of that account than start charging up my credit cards.

  • LeanLifeCoach, by “on top of retirement” I meant on top of putting away 10-15% for retirement each year, not necessarily putting as much away as legally allowed in a 401k and/or IRA.

    David, thanks, although I think making it to any of those steps is a good thing.

    Kate, it’s definitely good to have a cushion like that.

  • Ahh the good ol’ days of earning 4% in my ING account…that was the life!

  • Writer’s Coin, yup, those were the days. Of course, these are the days of low mortgage rates, so there is that too.