Money Hack: The Monthly Checkbook Sweep Print
Tuesday, 10th February 2009 (by J.D.)This article is about Budgeting, Hints and Tips, Money Hacks, Real-Life
At dinner the other night, T.S. told me about a new trick she’s developed to force herself to save money. It used to be that she’d just spend whatever she had in her checkbook. She didn’t spend more than that, so she wasn’t accumulating debt. But like many people, she wasn’t saving either. She spent whatever she had on hand.
Because T.S. wants to save, she’s opened an account at ING Direct. She wants to build a balance so that she can earn interest.
But in order to save, she needs to stop spending. Over the past few months, she’s developed a system that let’s her do that. Here’s how it works:
- When T.S. gets her first paycheck every month, she deposits it into her checking account. She uses this money to pay bills and to fund her lifestyle, as normal.
- When she gets her second paycheck, she does the same thing.
- At the end of the month, just before she receives her next paycheck, she sweeps whatever remains in her checkbook into her savings account.
“I make myself feel like I’m living paycheck-to-paycheck,” T.S. told me. “If I move the money over to savings, I almost forget that I have it. I know it’s there in the back of my head, but it’s not in my checkbook ready to be spent.”
This monthly checkbook sweep might seem too simple to some readers, and it might never work for others. But for T.S., it’s one way to meet her goals.
Because each of has different goals and different mindsets, we each have different approaches to money management. We develop our own tricks — or money hacks — to circumvent our personal weaknesses. The important thing is to keep trying new methods until you find a few that work for you.
Checkbook register photo by lemonjenny.

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February 10th, 2009 at 12:25 pm
I would suggest to sweep the money right after I get my next paycheck instead of right before. That way there is not the possibility of a check or transaction bouncing.
February 10th, 2009 at 12:29 pm
I do the exact same thing!
February 10th, 2009 at 12:33 pm
I do the sweep into my “fun money” savings account. I save over 40% of my income, so my problem is enjoying the money I do have! The sweep earmarks money that I can spend without guilt.
February 10th, 2009 at 12:45 pm
I use a zero-based budget approach, in which I plan where each dollar will go (with general categories such as ‘fun’, ‘mortgage’, ‘groceries’, etc). Several of my categories represent ING savings accounts (tuition acct, utilities acct, etc). Then my savings plan is almost like paying another bill, just a recurring part of my budget.
If there’s anything left at the end of the month, that’s just gravy—I can either send it to one of my other savings accounts or I can choose to spend it, since I’ve already funded my savings accounts at the levels I wanted to in the first place.
February 10th, 2009 at 12:45 pm
I solved the reverse problem in a similar way. I only get paid once a month at the beginning, but I pay my bills at the end of month. I’d have an enormous balance in my checking account for most of the month and inevitably I’d spend more than I should. I opened checking and savings ING accounts. Now I move all the money needed to pay “dedicated” expenses like mortgage and savings to the ING accounts and I can spend what’s in my checking account safely. Bonus - I earn interest on my mortgage payment while it’s hanging out for a few weeks.
February 10th, 2009 at 12:45 pm
Hi J.D,
I am a reader of your Blog for quite some time and I really like your advice but this one specifically seems very useless and obvious. I also think you should write more your own opinion and don’t be afraid that you might not be as loved by your readers. That’s what blogging is about- sometimes I feel like I am listening to my corporate Boss!
Thanks
John
February 10th, 2009 at 12:46 pm
I use a zero-based budget approach, in which I plan where each dollar will go (with general categories such as ‘fun’, ‘mortgage’, ‘groceries’, etc) before the money even hits my account. Several of my categories represent ING savings accounts (tuition acct, utilities acct, etc). The result is that my savings plan is almost like paying another bill, just a recurring part of my budget.
If there’s anything left at the end of the month, that’s just gravy—I can either send it to one of my other savings accounts or I can choose to spend it, since I’ve already funded my savings accounts at the levels I wanted to in the first place.
February 10th, 2009 at 12:57 pm
I get paid every two weeks. The first thing I do when I get paid every week is the sweep of what was left from the last check. It’s working ok for me, and I’m not too worried about bouncing things.
February 10th, 2009 at 1:08 pm
i do something similar to the sweep, but it’s more like a zero-based budget in practice.
i have a set number of things i pay out of each paycheque (bi-weekly). after all those are paid, i use whatever is left to pay for any irregular expense which occured. what is left immediately gets swept into a savings account unofficially designated for things i don’t specifically save up for: clothes, medium-cost household items, etc.
it’s only been a month or so since starting this, but i like that it really forces me to keep within my set food/entertainment/house budgeted amounts because that extra float i had each pay would just get used up on who knows what!
February 10th, 2009 at 1:23 pm
I’ll do the same thing for my wedding savings. Some money automatically goes into the wedding account every paycheck, and then anything left after I receive my next paycheck goes in as well. Everything gets a nice boost, and I’m saving ahead of schedule.
February 10th, 2009 at 1:25 pm
I’ve used the “sweep” method for years, with a minor twist: half into savings, half towards debt. Lately I’ve been focusing more on debt, but over time I earn more in the stock market than I pay in interest. The trick is to not let your debt grow, which I still struggle with on occasion.
February 10th, 2009 at 1:37 pm
I have been doing the same thing for my credit cards - at the end of each paycheck I’d “sweep” the extra $19 or whatever it was and put it toward my debt.
Once my debt has been paid off, it will go toward wedding savings as well.
February 10th, 2009 at 1:45 pm
I’m a fan of paying yourself first and last. At the end of the month I sweep whatever’s left in my chequing account into savings, but I also have automatic deposits set up after every paycheck to put 10% into retirement savings and 10% into non-registered long-term savings. As a result, I save about 30% of my gross income.
February 10th, 2009 at 1:48 pm
J.D., I think it’s great that (your friend?) T.S. is using whatever tools are available to walk on the “path” of getting rich slowly. What is most interesting is that she doesn’t need some fancy gizmo or software to build a solid financial plan. I think this also reinforces your first key belief that “money is more about mind than it is about math” and your seventh key belief “do what works for you”. If it works, use it. If it doesn’t, lose it. Thanks for sharing this story.
February 10th, 2009 at 1:56 pm
I do something similar but more high tech. I have a spreadsheet with all my bills laid out by week, for the next 3 months. I schedule my credit card payments to be the maximum amount I can pay and still leave $200 in checking. I put a fixed amount each month in savings but if my next credit card payment I have more available then the balance on the card, the extra goes to savings as well.
http://bitsmack.com
February 10th, 2009 at 2:01 pm
I should do this in addition to my direct deposit savings… I’m trying to speed up fully funding my emergency savings but that should only take about 6 months at my accelerated rate.
Cara, I like your idea of sweeping it into guilt free fun money, if you have trouble letting yourself spend a little that’s a great way to do it.
February 10th, 2009 at 2:01 pm
I do basically the same thing. I also put 100 dollars into savings automatically twice a month in case there isn’t anything left to sweep to make sure I’m still saving. I do the sweep after my paycheck goes through just in case, like MN Scout says. I got burned really badly by a budgeting snafu, so I started doing it AFTER. Works like a charm.
February 10th, 2009 at 2:07 pm
I do something really similar to this. We have an ING checking account and a checking with our local bank. We have my paychecks direct deposited into ING where it is harder to access and my husbands go to our local chacking. This way we only “see” his checks and pretty much live off that. If we need the other money we can get to it, but if not I divide it off to savings. Such a grat way to trick yourself into living below your means.
February 10th, 2009 at 2:10 pm
Usually the posts here are useful or interesting, but honestly this is a pretty lame hack. I wouldn’t even call it a hack, really.
I know everyone has their own little tricks, but it seems like a dumb idea to me. How much money are you going to lose due to overdrafts?
Are there really people like this who have such loose grips on their spending habits? You have to introduce me to them…
February 10th, 2009 at 2:11 pm
My wife and I try to always pay ourselves first. We set aside monthly amounts to go into investments and savings. We are usually pretty good about staying on course - but of course we’ve strayed from time to time. Nice article.
February 10th, 2009 at 2:11 pm
This is a great tip - and I must confess, I’m always surprised at “tricks” like this because they have been second nature to me ever since I started earning money. Another one I hear mentioned often is that you pay this month’s bills with last month’s income (a buffer). When I heard that, I just thought “Isn’t that how you’re supposed to do it?!”
Love hearing these tips - even if I’m already doing them, they’re great to have them reinforced and really think purposefully about the behavior.
February 10th, 2009 at 2:17 pm
Yes, I do something similar.
I get paid once a month; I allocate a percentage to retirement and a percentage to both long term and short term savings.
At the beginning of each month, I sweep any “leftover” money from the previous month into savings. (As another posted noted, I do this after I get paid, so as not to unexpectedly create an NSF occurence).
I also have begun squirreling away any reimbursements or unexpected income into my ING savings account - it’s amazing how fast it builds up when you’re excited about saving!
February 10th, 2009 at 2:32 pm
For several years, my husband and I have been living on only one of our paychecks. Right now it’s his, and we deposit my entire paycheck toward our down payment fund. But since we’ve now upped our timeline for buying a house, I’m now using this sweep method to get some extra money into that account. If we can cut out some non-necessities, we can live on less than he makes and be that much closer to our goal of a house.
February 10th, 2009 at 2:45 pm
We are saving for a down payment on our first home, and we deposit $200 a month, at the first of the month, automatically, into an ING Orange Savings. There is no excuse to touch this money, unless it’s time to buy (still a while away). We are currently paying off our debt (will be done by the end of the year!) and then hope to deposit hundreds more a month into the account. It’s automatic, so it doesn’t require me taking care of it on a regular basis, and I pay myself FIRST and then take care of everything else. I don’t miss the money, and I am living quite comfortably.
February 10th, 2009 at 2:46 pm
I have a checking account, but I don’t use it. I either pay with cash or credit, which isn’t a problem, since I never carry a balance or spend more than I earn. When I get my paycheck (once a month) I use USAA’s deposit at home service (you can just scan your check) to deposit into my savings account since my company doesn’t do direct deposit. I hold it in that account until my USAA credit card statement is ready, pay off the amount, and then transfer a large chunk to my checking account so I can write a check for my car payment, a portion to my IRA and a portion to a higher-yield savings account I have with HSBC Direct. One thing I try to do is try to keep track on a spreadsheet what I’m spending during the month. If I have an exact idea as to how much I’ve spent and how much I’ll have left over to save, it helps me curb my spending, or at least hold off on it until the next paycheck.
February 10th, 2009 at 2:46 pm
@Michael
That is a pretty bold (and ignorant) statement. If you had read carefully, J.D. even mentioned that this may seem too simple for some readers but also emphasized that each person has different mindsets and approaches when it comes to personal finance. By calling this method lame, you insult the effort of T.S. and anyone else who decides to make an effort to get rich slowly as a result of this post.
February 10th, 2009 at 3:01 pm
This is a good method that might work for some, but I dont see the max benefit in the saving by sweeping what is left over.
What if a person has bad spending habits and it only sweeping 5% of their paycheque each week or month? Does that really curtail the expenses that are being racked up on unnecessary shoes/clothes/dinners??
Personally, I just use my previous 2 months as an average for my current month’s spending budget and try to stay below that. This way I have a more rigid budget that forces me to conform to spending less and saving more.
Again, to each their own and if this helps people out there, then that is all that matters!
February 10th, 2009 at 3:03 pm
Sounds like “Pay yourself last” rather than “Pay yourself first.”
What about sweeping a certain amount out of each paycheck right away before you notice it’s there?
February 10th, 2009 at 3:20 pm
Yeah this wouldn’t/doesn’t work for me (but I’m glad it works for others!). I have to transfer the money to savings right when I get paid for it to work. By the time I am about to get paid again I usually only have 25 dollars or so left in my checking account. For some reason my brain sees money in the checking account as liscense to spend. I need perceived scarcity to kick myself into spend frugally mode.
February 10th, 2009 at 3:45 pm
Great concept and reminder that different methods work well for different people.
But the overall goal is to move money into savings and keep it there. Sometimes I will put all of my paycheck into savings and then just pull from there what is needed to pay my bills online. Other times, when I need more cash on hand, I will put a portion of the check into savings and then use the rest for bills, etc. But I try to put away something with every check so I can learn to live with less money at present so as to create a more secure future.
February 10th, 2009 at 3:58 pm
I do a combonation, I have a set amount everypaycheck that goes towards my ING savings and then whatever I have left over at the end of the two weeks I move over as well. I make the transfer of the left overs on the moring of the day that I get paid. And if you are paying bills on line, you dont really worry about overdrafts. I never write checks anymore and it has been almost 8 years since I had an overdraft charge or a transfer from the CC that serves as my overdraft
February 10th, 2009 at 4:02 pm
Great idea - I really like it!
February 10th, 2009 at 4:07 pm
I give myself $200/month for whatever I want. Lunch out, movies, dinners, mad money, whatever is not directly budgeted comes out of that. If I don’t use all of it, it carries over to the next month. I usually only use about $50 of it if I pack my lunch. Right now I have about $600 waiting for me….
(This is of course in addition to regular savings and IRA stuff.) I find watching that pot of money grow is fascinating and it makes me want to be frugal with it every minute of every day. Whatever works!
February 10th, 2009 at 4:08 pm
I use this trick as well and I have found it *really* helps me control my spending.
I pay my 401k automatically out of my paycheck. I’ve found that the sweep at the end of the month encourages me to pass over some things that would find their way into my “Entertainment $100″ or “Free Spending $40″ or “Clothes $40″; don’t, because I’m thinking about the growing number I’m going to be able to sweep into savings.
It’s a great feeling to move that money after I pay my bills on the 1st of the month to sweep the rest into savings and see how high I got that number.
And for those worried about bounced checks, etc. I keep 500 dollars in my checking and consider that amount 0. So if I have $522 in my account I consider that I have $22. The 500 is a very liquid emergency fund. While it doesn’t gain interest, it prevents issues and also allows me some comfort since my savings account takes 2-3 days to move the money to my checking.
February 10th, 2009 at 4:22 pm
I like to keep a minimum of $500 for random things that come up, and every time I get paid I work out what the minimum I need for the pay period is and then dump the rest into savings (in $125 increments - I’m weird). It works well, I end up saving around 35-50% of our combined income each month.
I used to do the same thing when I had a $10k credit card balance and got so used to it that when I paid it off I just kept doing it for savings.
Not the most ingenious tip I suppose, but it works a treat.
February 10th, 2009 at 4:43 pm
I work out a family budget every month and have a rough idea of how much we need to spend.
There are allocations for discretionary spending and the rest goes into savings account.
I guess this sweeping method works just as well, especially for those who are starting to save.
February 10th, 2009 at 5:15 pm
I used to just get $100 twice a month or so (or whatever amount I was saving) whisked away from my bank account into my ING account. That was easy - I didn’t have to monitor what I had that way.
Now, with my new consolidation loan (!!!!) I have a heap more extra money, so when I get the chance I chunk $300 or so into my savings. And leave it there. My challenge for the coming days is to live off of the pittance that I’ve left for myself in my chequing account… I’ve been getting quite crafty at it.
Its funny because last year I was in the position of having no extra money at paycheque time, and I *had* to live on $50 for two weeks… and I did. So I’ve carried through those survival instincts to my new “savings” mode. ! So far so good!
February 10th, 2009 at 5:41 pm
This has been my system for the past three years and it has been a spectacular success for me. I consider it the cornerstone of my debit-card based saving system. I “pay myself first”, and put only money I have budgeted to spend in my checking account, and then whatever is left of that (actually not at the end of the month, but end of the pay period - every two weeks) I put into savings.
I ran through real numbers, and spent about 8% less over the course of a year than I budgeted. (You can search on my blog if you’re interested in the specifics).
My rule is that I never, withdraw from savings, ever, no matter what. So if my grocery budget came in $5 under budget in April 2006, hey, I still have that $5 saved away.
I have never had an NSF fee in my life. I have written exactly one check other the last three years. Generally I know my checking account balance to the penny. Quite honestly, I don’t understand the seemingly uncontrollable chaos that so many people seem to have where they need all sorts of buffers and cushion money on all of their accounts, and have all sorts of unexpected withdraws from their checking account suddenly and randomly cropping up all over.
February 10th, 2009 at 7:17 pm
I do a similar thing, but I leave myself a buffer.
The first thing I do when I get each paycheck is pay off the few hundred dollars that have accumulated on my credit card since the last time I have paid it off.
For my first paycheck of the month, I sweep off anything over $1,000 dollars. Since I know the second paycheck goes to pay my rent and car insurance, I sweep off anything that’s over $1,0000 + those set amounts.
I like to leave myself a buffer in case something would come up (it takes several days to get that money back from ING Direct).
February 10th, 2009 at 8:06 pm
The problem with this strategy is that this is the “what ever’s left” method of saving. Not sure that you can save enough this way.
February 10th, 2009 at 9:13 pm
Funny you should write this. I’ve been trying to do it in recent months. I actually think it is a more realistic form of savings for someone who is low-income, when they are just getting started saving. There may not be enough in the monthly budget, if there is one, to be able to set aside ten percent or whatever, but sometimes you spend less than you intended, or making a conscious effort to reduce unnecessary spending pays off, and you don’t want that surplus to just disappear.
February 10th, 2009 at 9:47 pm
I don’t understadn why some people are so negative about seemingly simple savings stategies - so what if its not complex enough for you - the great thing about this blog is the wide range of people it caters for. I say good on TS for finding something that works for her and sticking to it.
Like many commenters I have a similar system. Hubby and I get paid on the same day fortnightly. On that day I transfer half of our money into high interest savings accounts that are difficult to withdraw from (we have one account for each of our savings goals), I then transfer the money we will need to pay recurrent bills and groceries into an account that is easy to withdraw from. This leaves us $400 in our account (or $100 each per week for ‘fun’ money. We can spend this on (or save it up for) whatever we choose without guilt or the need to consult each other. The day before our next pay check arrives (two weeks later) I sweep anything left over into our miscellaneous savings account(we have 4 all up - emergency fund, house deposit, end of year holiday & miscellaneous). When it comes to buying something a bit more pricey (like new appliances) we just take the money from there rather than having to tap into savings. I guess it sounds complicated but with online banking its all very simple and I can see the position of all of our 8 accounts at once (4 savings, 2 checking and 2 credit cards) so we always kno exactly where we are at.
February 10th, 2009 at 10:26 pm
I like my method of having money direct deposited into multiple accounts. That way I never concern myself with the money and whatever money I have in my main checking account is mine for the wasting
I’m saving a lot of money this way.
February 10th, 2009 at 10:31 pm
I can see it working for some, but a partial sweep would be a lot smarter than sweeping the whole amount. You don’t want to find out that you made a 20-cent error and gave your bank an excuse to hit you with fees.
February 11th, 2009 at 1:04 am
I am lucky enough to be able to direct deposit my paycheck into multiple accounts. I have a certain amount going into my checking to cover bills. Whatever is left over goes into savings.
February 11th, 2009 at 2:12 am
what a genious idea!!! just what i’v been needing to help me kick start my savings!! thanks JD
February 11th, 2009 at 2:45 am
I’m with Aleks at post 13. I pay myself first and last by the sweep method. Track every penny you earn and spend, so at the end of the month there’s excess. This way, I am saving a total of 20% of net pay.
February 11th, 2009 at 3:39 am
I love the ING account, it is the cornerstone of my “Squirrel accounts” strategy.
I don’t track my balance– I don’t want to know it or think about it. Out of sight, out of mind.
My Squirrel account strategy is outlined here:
http://divorceddadfrugaldad.com/2008/11/12/squirrel-accounts—-do-yourself-a-favor-and-set-one-up.aspx
February 11th, 2009 at 4:51 am
@Frugal Bachelor (No. 38):
Fact is, some of us are uber-organised, and some of us are not. I never know specifically what is in any of my bank accounts, and it would take a considerable amount of effort on my part to do so because I would first need to overcome my disinclination. Much better to work with your personality type than against it.
@Shadox (No. 40):
You’re right that it’s hard to really get miles ahead with this method, but realising that you can save hundreds without even noticing might make you consider that you could save thousands with little more effort (paying yourself first).
February 11th, 2009 at 5:28 am
I do something similar, except for letting checking account money “fund my lifestyle” (my husband and I are adult allowance people, so our lifestyle funding comes out of that).
After all the bills are paid, groceries bought, cars filled with gas, everything else goes into savings. Even though we budget for 100% of our money, usually we end up not using all of the allotted money for groceries and gas.
It really adds up! (Well, in addition to the $800 we put into savings every month at the beginning of the month.)
February 11th, 2009 at 5:37 am
Just reading back over the comments and I’m surprised a lot of people seem to be arguing the value of “sweeping.”
It doesn’t have to be your ONLY method of savings (for us, it’s tertiary… first, TSP contributions come out of the paycheck, then I deposit 800 monthly into savings, thirdly, I do a “sweep” at the end of the month).
It can be a valuable tool to add to your “bag of tricks”!
February 11th, 2009 at 6:24 am
Another thing you can do is just have a certain amount auto-deposited into your savings so you really never see it, never have to think about it, and never have to actively move it. It would be easier that way it seems.
February 11th, 2009 at 6:55 am
I’m a big fan of the sweep, although I call it “paying myself last”. To clarify - this is not the only way I save. I also pay myself first.
I always zero out my account immediately after I get paid. I think it’s crucial for budgeting.
If you don’t zero out your account, you’re essentially living on more than one paycheck at a time, which may not be sustainable.
By paying myself last (in addition to first, of course) I’ve also managed to really start chipping away at my debt.
I don’t understand the negative response for this. I think it only makes sense to take a two-headed approach to savings.
February 11th, 2009 at 7:48 am
Another similar idea which I use is to have an automatic withdrawal from checking into savings on the day I get my paycheck. Some of this money is savings and part is “escrow” for big expenses that come up periodically, but not regularly, such as insurance payments. That way I don’t miss the money — it is almost like it was never there, but I keep saving for my goals and don’t get stuck one month having spent too much and not having enough for the big payment coming due on car insurance, or something like that.
February 11th, 2009 at 8:24 am
I can absolutely NOT trust myself to do this. I have the savings portion of my pay auto-deposited into my ING account. Everything left in the checking account is for expenses or play money.
It is way easier than “sweeping” money, and I don’t have to have the self-discipline to log onto the computer to do it.
(And with kids, house, job, spouse and dogs to care for, the more I have automated the better.)
February 11th, 2009 at 8:43 am
I think this is a great way to begin developing the habit of saving. I have done this myself, but with a twist. I keep a “pad” of money in my checking account that doesn’t show up in my main ledger. (I’m not earning interest on it, but it’s worth it to me to know, if I forgot to enter an expense, I’m not actually going to overdraft.) I would “sweep” the money at the end of the paycheck into that “pad,” and do a transfer to an interest-earning savings account when I had $100 or more built up above my preferred “pad” amount.
One of the things that has made saving easier for me is to use a digital checkbook. I have a checkbook program on my Palm (yes, I’m still using a Palm TX)that lets me set up recurring transactions and multiple accounts. I have all my standard bills set up as recurring transactions, and my savings entries. The program also keeps a running total of my ledgers so I always know how much money I have left.
February 11th, 2009 at 8:51 am
I pay myself first and last. My 401(k) gets pulled before my check gets deposited, then I get the remainder deposited into two checking accounts (one at ING, and one elsewhere). THEN I have an automatic withdrawl from both checking accounts into savings (part is earmarked for my insurance payment every six months, the other is general savings).
With the remainder, I use the ING account to do automatic bill pay, since it earns a better interest rate then my other account, I can just leave the money in there and forget about it for two weeks. I overbudget for my bills (just in case, you never know when you may get hit with an unexpected higher electricity bill or something), then when I get paid again I sweep whatever’s over my allotment amount to savings.
The other checking account is for irregular expenses and spending money. I only have a couple hundred deposited into that account each check and live off of it. When I get paid again, anything over $300 gets transfered to ING.
Since I have both the checking and the savings at ING, I’m pretty comfortable with the low balance in my regular checking. If something were to happen, I could transfer money from savings to Electric Orange and use it immediately.
February 11th, 2009 at 9:12 am
I have started doing basically the same thing. MN Scout mentioned waiting until next check so as to avoid possible overdraft issues. We keep about $500 extra in checking that we don’t show in the register. We know it is there and we add it in every time we balance the checkbook. It is somewhat like a personal overdraft protection. That way I can always feel comfortable spending it down to zero because I know I have a cushion in case I made a mistake in addition or subtraction.
February 11th, 2009 at 9:49 am
Like others, I use a combination of the paying myself method. I have a set amount transferred on the days I get paid to my ING account. I have a set amount that I pay on my debt each month as well. Whatever I have leftover at the end of the pay period, I sweep to my debt.
I also have a zero-sum budget, but if I don’t spend all the money allocated for a particular item (such as food), I do not go out and spend the rest of the money on food just because that was it was budgeted for. I look at it as being — what do I do with the leftover money from my budget that I didn’t spend? For me, I sweep it towards my debt.
Someone said that it’s not a very efficient method of saving since it can only a few dollars each month. It’s really to each their own for a system that works for you. I belong to the “keep the change” program. Although I only save pennies any given day, in 2008, I saved over $220. Is it a lot of money? No. But it’s a pretty decent chuck of change that I never missed during the year.
February 11th, 2009 at 10:11 am
Bachelor,
The reason you probably don’t have any unexpected expenses is because you are a bachelor. When you have a family, there are all sorts of unexpected expenses, trust me.
February 11th, 2009 at 11:20 am
I actually do this with BOTH paychecks for the month. When the first comes, a large portion of it goes to my rent (ugh), and so I pay my bills like normal. When the second comes, I just replace the balance line on my Xpenser spreadsheet with $0 and pretend like I’m broke, then write in the income from the second paycheck. I don’t have an outside account yet, but I do end up with a ton of money saved.
Also, Crystal, I’m a Bachelorette, and I understand the concept of unexpected bills; just because a person’s single doesn’t mean they don’t have emergencies
It sounds like Bachelor is just a control freak when it comes to his money - something perhaps some of the rest of us should try
;)
February 11th, 2009 at 11:45 am
I’ve been thinking of doing this. It was something that I came up with after reading many entries of “getrichslowly” and No credit Needed. Since I have debt, I’m taking the remainder at the end of the month and putting it toward my debt as an additional payment.
February 11th, 2009 at 1:39 pm
I budget with round numbers. When I enter my paychecks into my personal finance software (I use NeoBudget - its AWESOME), I round down to the nearest dollar. Then, when I spend money out of any budget category, I round up to the nearest dollar.
In my check register, however, I use real dollars. I balance my checkbook once a week when I have some time to do the math. When the next paycheck comes, I sweep the difference between my check register and NeoBudget’s register into my ING account. Its kind of like do-it-yourself Keep the Change.
I’ve only been doing this since November, but its been an extra $25-30. Its nice to put the extra found money on top of my regular contributions to savings. I don’t miss it during the weeks between paydays (I get paid biweekly), and I have never pulled my check register to see how much money I have - I check NeoBudget to see how much I have available in whatever category I’m going to spend in.
February 11th, 2009 at 4:49 pm
I’ve been doing this for a while. My pay from work gets automatically deposited into my daily transaction account, which I use to save with, and just before each pay day, I dump the left over in my ING savings account.
Now that my emergency fund is sufficiently healthy, I push the left overs into my single remaining debt, which is my car loan.
February 11th, 2009 at 5:55 pm
I know everyone has their own little tricks, but it seems like a dumb idea to me. How much money are you going to lose due to overdrafts?
I love how ideas or suggestions inevitably get hit with “but overdraft fees!”
My suggestion is “don’t spend money that you’ve already paid out” or “try not write checks very often because they take a while to be cashed and you might forget that something is going through” or “spend thirty seconds looking at your bank account online once a day or every other day in order to catch stupid mistakes like that.”
February 12th, 2009 at 10:41 am
Hi J.D.
This is certainly better than not saving at all. I think for those who are not accustomed to maintaining a savings account, this would be a good springboard into paying themselves first (which is what I do). Maybe once new savers start to see their accounts grow, and the affect of larger balances on interest earned, they will be more motivated to start trimming from their lifestyle to spend their first few bucks on their savings account as their first expenditures in addition to sweeping their checkbook balance at the end of the month.
February 12th, 2009 at 3:31 pm
I do the same thing, and it works great for me! I pay my savings at the beginning of each pay period. Then I pay my bills and spend in a smart way, which means I usually have a remainder at the end of each pay period. I then take a bit of it for fun money and sweep the rest to savings. Obviously, it’s critical to pay attention to your balances, which I do with a quick visit to my online account each day.
February 12th, 2009 at 4:54 pm
I do a similar thing, except I use $1000 as my zero-point in my checking account. I also have an automatic weekly transfer from checking to savings. I’m saving a good portion of my money, and I don’t stress about it!
February 13th, 2009 at 3:03 pm
pushing end of month money out of checking is a trick I’ve been doing forever! It is a great way to make sure you don’t spend your savings. I try to keep my checkbook at a very minimum balance ($100) so I don’t lose out on any iterest.
February 19th, 2009 at 8:44 am
I’m pretty excited about this. We contribute about 25% of take home pay to investments, but this is a way I can pay our last car payment down. We were planning on paying it off early anyhow, but I think I figured out that it’ll now be 3 months earlier than my initial 9 month earlier estimate. Pretty cool. We used to just leave that money in checking and then it would eventually get spent on something. Now we’ll have to move that money from savings making me wonder if we really need it. Interesting. Thanks.