I talk about saving our leftovers quite often, but I’m not sure if I’ve explained what I’m talking about. I’m not talking about leftover food, I’m talking about money.
Our budget is a bi-weekly budget, which getting paid bi-weekly has many advantages. One of them being there isn’t a month between payday, so payday comes sooner. Meaning our money can be stretched and manipulated a bit easier.
The most important thing I do, is start at zero every single payday. Even if there is $50 leftover from the last paycheck, I start back at zero.
That leftover money from the previous paycheck is then transferred to which ever savings sub-account I’m currently focusing on.
For example:
We got our bi-weekly paycheck and it was $1,300, and after all of our expenses, we had spent $1,250 by the next payday. So that $50 is transferred from our checking account into one of our many savings sub-accounts over at Capital One 360.
Now our account is back to zero and we get paid again, let’s say $1,312. We only have $1,312 to work with the paycheck, not $1,362…because we saved our leftovers (the $50 left from last paycheck).
Saving our leftovers is a great way to keep us on track and spending less than we make. It’s so easy to just add the leftover money to your next paycheck and have more to work with, but I don’t think it’s really helping you out in the long run.
I can understand though, that some people don’t have that much money (if any) leftover by the next payday. We were there ourselves a while back, and actually spent probably 30% or more each paycheck than we brought in.
It was a nasty mess and took a long time to get out from, but I started saving money even when were broke and others can do the same. Yeah, it takes time and work, but if you really want it bad enough, it can be done.
When we get so close to spending the whole paycheck these days, I will still make it a point to transfer the money to our savings if it is a dollar or more. If it’s less than a dollar, I leave it in our checking account and use it to build up a little buffer.
It’s been (I think) around 4 years that I’ve been saving our leftovers and our checking account buffer has grown to around $80 or so. But I’ve probably saved well over a thousand dollars from transferring our leftovers to our savings accounts. Not too shabby.
Another idea for your leftovers, assuming your finances can handle it…is to use it for donations. Many people want to give back and help others, but just can’t find the extra cash.
Would you ever save your leftovers and start each payday at zero?
What’s the smallest amount of money you’ve saved?
When it comes to these little amounts, here’s the catch: Saving or doing the right thing won’t alone make you rich, but not saving and instead doing the wrong thing could make you poor. Right there is motivation to continue down the right path.
Money Beagle recently posted..Time Lapse Videos I Want To See
Totally agree with you MB.
Jen Perkins recently posted..Net Worth Update~ March 2013
Interesting concept. I used to transfer just $10 to my savings account when I was paying my credit cards. Small amount, but gave me motivation.
Grayson @ Debt Roundup recently posted..Does Your Business Need a Safety Sign?
Something is better than nothing.
It all adds up.
Jen Perkins recently posted..401k Match = Free Money
Great advice! I also use this method. We “spend” our whole paycheck every time we get one. We pay all of or bills and put the rest in savings every time.
Nick @ ayoungpro.com recently posted..Apply for Every Job You See
I’ve heard about doing this and think it’s a great concept to use. It probably won’t make anyone rich, but it definitely could build up a nice little sum over time plus keep that motivation to save.
John S @ Frugal Rules recently posted..Frugal Friday: Blog Posts That Ruled This Week, More Snow Edition
I don’t start each payday at zero, I start each month at zero. I’m trying to work on a budget.
That’s still really good, Karyn.
Good luck with your budget.
Jen Perkins recently posted..Money & Goals: Weekly Update #2
Well, I keep a buffer of around a grand in my checking account. My expenses are nowhere near smooth enough over the course of the month to even try zeroing (or whatever number) each week. Heck, the rent is 2 1/2 paychecks by itself! Then the next week, we average 1.2 bills to be paid each day. The rest of the month has the car payment and my wife’s cell-phone, and the car is almost paid off. Basically, we use the second half of the month to save up the money to pay the bills that are in the first half of the month.
That said, we do move extra money into a savings account.
Edward Antrobus recently posted..The Case Against Minimalism
Wow.
Jen Perkins recently posted..Daily Transfer Graduation & Automating Finances
I do exactly this, too! Except I call it “zeroing out” as in zeroing out our checking account. I have transferred as little at $0.60 from checking to savings!
Yay, I knew I couldn’t be the only one.
Jen Perkins recently posted..Money & Goals: Weekly Update #3