Saving money—it's like trying to take an ice bath at 5am. There are a gazillion reasons why we struggle to save, from not earning enough to simply forgetting. And then, bam! Emergencies hit, or we find ourselves splurging on that "oh-so-essential" gadget. But here's the real kicker: most of us don't give saving the VIP treatment it deserves. We treat it like the last bite of our pizza, only thinking about it after everything else is gone. Spoiler alert: by then, your savings might have turned into a spontaneous shopping spree on Amazon if you didn't already drink it. Oops!
So, here's the lowdown on this savings plan that will change your world. It's perfect for the regular Joe with the predictable W-2 income. We'll keep it real keep it real simple and ditch the fancy finance talk. This is the savings guide you'll want to share over a pizza that you will leave the slice of.
Step 1: Open a Super Cool Savings Account
Okay, first things first—get yourself a savings account that's cooler than the other side of the pillow. The other side of the pillow in this case would be a traditional savings account that you get attached to your checking account that pays you less than 0.01% yield for lending your money.
The reason we emphasize a “High Yield” Savings Account is simple—the higher the yield, the more money you make. High-yield savings accounts pay you some sweet dough just for parking your money with them. It's like your bank is saying, "Thanks for trusting us with your cash; here's a little extra for your trouble." Regular savings accounts, on the other hand, usually pay less than a speck of dust in interest.
Make sure to pick a different bank from your current money hangout for psychological reasons. Number 1, so you’re not spying on the balance regularly. And number 2, to make it undesirable to make a transfer; don’t even get a debit or ATM card for this account, folks. We want it to be more guarded than the secret sauce on your favorite burger. Let's make it a little forgettable too. Forget your login details, or better yet, pretend this account is your 7th grade science teacher.
Here are some cool spots for your secret new savings:
CIT Bank - The highest yield jackpot awaits at CIT Bank.
Ally - My personal go-to for high-yield savings swag is Ally.
SoFi - They even throw in a starting bonus at SoFi. How cool is that?
Step 2: Crunch the Numbers (But Keep It Simple)
Time for a little math party, but don't worry, it's even more simple than 7th grade science. First, decide how much you wanna stash away. Let's say it's a sweet $10,000 which is a good round number that takes some time to accumulate but can be knocked out in a year. So to break down how to break down this common goal for many high earners, simply divide that goal ($10k) by the number of times you get paid in a year. If you're in the bi-weekly club (getting paid every two weeks), that's 26 paychecks a year. So, $10,000 divided by 26 equals around $384.62. That's your golden contribution number every paycheck.
But hey, life's a party, and if you decide to join the savings shindig a couple of months late, tweak that number based on the paychecks left in the year. If you're kickstarting your savings in March, it leaves you with 22 paychecks left for the year. You'd then be looking at a $454.55 per deposit every pay period.
Step 3: Direct Deposit Magic
Let's keep the momentum going with some direct deposit magic. Log into your work's system, where the paycheck fairy works her wonders. This would be like ADP or something equivalent. Update your direct deposit settings to include your new savings goal. And this is important: use a fixed dollar amount, not some tricky percentage. This ensures you hit the bullseye every time. Nothing over and definitely not anything less than your goal.
Most likely your workplace is cool and allows multiple direct deposits. If so, send the $384.62 we calculated in the previous step straight to your new secret savings hiding spot. Make sure this new savings account is first in line to be funded when you make these updates. Yes, it needs to go before your checking account is funded. If set up in reverse, a short check could ruin the savings party. Your last deposit gets the remaining balance instead of dollar amount and we don’t want to allow any chance of messing up this goal. Now, if your job pulls the "single deposit only" card (this is where you side eye), just dump everything into your main checking account and set up automatic transfers from there to your secret savings. Easy peasy!
Step 4: Keep on Hustlin' to save $10k
Now, the fun part—keep doing what you’ve been doing which is going to work. As long as those paychecks keep rolling in, you're on the fast track to hitting your $10k savings goal. Automation is the super power here. No need to micromanage; just set it and forget it. Seriously, forget it! Don't torture yourself by checking your savings every day. And don’t tease yourself by seeing all that money and thinking it’s available to you because it’s not! Well at least not yet. Not until you reach your goal. Don’t pull out prematurely! Stick to the plan and trust the process.
Saving might seem like a superhero sacrifice at first, but here's what you usually only learn from experience: by stashing that cash straight from your paycheck, you naturally cut back on the splurges. You never even seen the extra cash to begin with, so the non-negotiable bills get first dibs, and the extras naturally fall off like the bad habits they probably really are. You won’t even barely notice they are gone!
Extra Tips for Legendary Pursuit Savings $10,000:
1. Emergency Fund pre-req
Hopefully you already have some money set aside just in case. This will prevent you from needing to pull from your goal or stop contributions. If you don’t have money set aside already, this is the perfect strategy for getting that money saved.
2. Become Master of Money:
Level up your money management by using this system of automation in not just your saving and investing, but in your budgeting as well. You can actually automate your entire money management using direct deposits as your secret weapon to remove mistakes that hold you back.
3. Accelerate your wealth creation:
Consider switching out your savings goal for an investing goal. This would replace your high yield savings account with an IRA or a brokerage account or a combination of the two. Investing doesn’t pay a yield for stashing money, but it does have the potential to grow contributions at rates savings accounts can only dream about. You could use the same steps to invest instead of save.
In the Grand Finale
This isn't just about reaching a savings goal; it's about demolishing discomfort in your finances and unlocking the door to a treasure trove of possibilities. Follow these steps, laugh in the face of financial stress, and celebrate the victories—big and small. Your $10,000 isn't just a number; it's the key to unlocking your next epic adventure. These are the steps to save $10k.