The Easiest Way To Save 3k

I’m still waiting for the day that I overhear someone say “Crap! I saved way too much.” It does not and I’m confident it will not happen. That’s because we all want to save more. The problem is that it’s difficult, especially when you’re a recent college graduate just starting out. To make your life easier, I’m going to share the best budgeting advice I’ve ever received. Don’t think of it as “budgeting for beginners” because I still follow this method of saving years later.

Everybody Hates Saving

Saving isn’t much fun. It’s the complete opposite of instant gratification. When we’re saving, we’re simply delaying gratification. We typically only see the benefit when we’re facing an emergency and don’t have to rely on credit. At this point we rarely take a second to think, “Hey, I’m really glad I did this.”

Why Is Saving Difficult?

Saving requires discipline and often times requires us to modify our behavior. If I’m used to eating X and Y, it takes a lot of effort to begin eating A and Z.

Saving is typically a series of decisions made daily. That’s why it’s so hard. That’s why my tip is so great. It requires only 2 good decisions each year. Sounds easy right?



Just The Tip

Here is the best budgeting tip I have ever received (and the tip I still use today). A lot of us get paid bi-weekly. Therefore, we budget our monthly expenses around receiving 2 paychecks. This means we budget for 24 paychecks (2 per month). There are actually 26 pay periods each year meaning there should be 2 paychecks each year that aren’t accounted for. If you make $40,000/year, you should be able to sock away AT LEAST $3,000/year from these additional paychecks.

Super easy. I suggest you try it.

Will 3k Really Change My Life?

Absolutely. Lets say you invest the $3000 that you manage to save every year. If you begin to sock this amount away when you’re just beginning to work (at age 25) then by the time you retire (age 65) you will have amassed a good chunk of change. And remember you don’t have to change the way you currently live!

Calculation for an average return of 5% and 10%:

Initial Contribution: $3000

Annual Addition: $3000

Years to grow: 40

Annual Return: 5% and 10%

Future Value: $401,639

Future Value: $1,596,333


If this seems ridiculously easy, that’s because it is! Quite honestly, I think these numbers are modest. This is under the assumption that you’ll make $40,000/year for the next 40 years. If we are constantly striving to maximize our earnings, the two paychecks each year should AT LEAST double by the time we’re 65.

Follow this very basic tip and in 40 years you will thank me.

Readers: Do you get paid bi-weekly? If so, is this tip old news to you?

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PB @
12 years ago

fantastic! showing the numbers does the trick every time!

12 years ago

Cool idea. I never would have thought of that but I guess somewhere along the line people somehow lose track of two paychecks worth of their salary. This is different than the tip that everybody hears about having 10% or whatever taken off every week, so maybe it might hit home for some more people. That means more people saving, which is great news.

The time value of money, coupled with money you never “see” or “need”, can grow in to a nice little bundle.

12 years ago
Reply to  Poor Student

That’s the beauty – the simplicity of it.

12 years ago

Or, for many of us, just bank our bonuses…

I guess the problem is many people will just plan their spending by relying on their bonuses – sort of like Chevy Chase!

12 years ago
Reply to  PK

The classic line is that, “You deserve it,” right? Only in the last 60 years could anything like that marketing scheme have succeeded!

12 years ago

I’m 30 and just now focusing on retirement savings. I’m hoping to save $2,000 this year to start with my limited income. I find by using a cash envelope system for groceries and personal spending, I receive “instant gratification” when I make my weekly savings deposits with the leftover cash. It’s a great feeling!

12 years ago
Reply to  Rachel

If you’ve found a system that works for you Rachel, that’s great! Good luck.

12 years ago

Abe Lincoln! Nice tip man. It’s exactly how they talk about with paying off our mortgages faster. Never thought about this from a savings perspective. Good thought!

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