The 3 Step Money Saving System

This simple 3-step approach to saving money worked for me. I hope it helps you.

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ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom.

[supersteve]

Surround yourself by friends that also prioritize saving also. Money spending friends will definitely cut in to your ability to save.

[Omar-etsb]

Such good advice Rob! Always PAY YOURSELF FIRST. I think it's a foundational step and absolutely required for those of us not good at making detailed monthly budgets... If we at least PAY OURSELVES FIRST, we can still achieve investing goals.

[JosephDickson]

I use the 50 / 30 / 20 method popularized by the book "All Your Worth" by Elizabeth Warren and Amelia Warren Tyagi.

Hold living expenses at 50% or lower, 30% or lower for entertainment, and 20% or higher for savings.

If living expenses are higher than 50% you have to make some lifestyle adjustments.

[Wbrundog]

Good advice Rob. I do those steps now as well!

[lynnellechappell]

🤔 I'm confused. If your transfers are automated (step 2) why is there a need to move the money from checking to savings (step 3)? What did I miss?

[BaronGitanoCafe]

Great adivce. Also beware the lifestyle inflation.

[Random-ldwg]

I agree. I always paid myself first with the 401K and 457 deductions with the paycheck. with the actual paycheck that lands in my direct deposit. i already had a preset amount that i knew we could live on( based on previous expenses for years as well as sticking to the same level of spending even after raises over the years) anything in excess even just a $100 dollars get's moved to a moneymarket fund with vanguard(so not visible from your online bank balances) or into my son's college fund( again i had a preset amounnt in mind as our yearly contribution). once a car get's paid off i continue deducting that amount from our checking(once did this for 5 yrs after a car was paid off and stopped when we bought a new car). excess amounts increase once FICA and 401K contributions are done for the year ramping up the saving the latter half of the year. this forces us to live lean and at risk of overdrafting occassionally so we eventually parked several thousands as a buffer in the checking but my wife and I mentally accounted for it as being not part of what we can spend.

the money market fund get's used as our 6-8 months emergency reserve and amounts in excess from that gets put into investments (taxable brokerage and non deductible ira's). other big ticket expenditures as our life insurance premiums, a downpayment for a house or a car get's taken from that as well but nothing for daily living expenditures. vacation expenses do get taken out of it and then it is built up again.

like omar below, we never did a budget.