A Beginner’s Guide to Growing Your Savings Account

There’s something wildly appealing to me about having more money in my account each week, month, year, or pay period, than the one before.

It’s not even necessarily about the dollar amount. I’ve been saving practically since I was born and I’ve never had a specific end goal for what I want my savings account to reach. For me it’s not about saving for a specific fancy car, or a big house, or a grand adventure around the world. It’s just about having… more.

My first real memory of this obsession with saving money goes back to when I was maybe 4 or 5 years old. I remember having a piggy bank that housed all of my coins and bills. I’d pull that piggy bank out often, empty it on the floor of my bedroom, and count every cent, to see where I was at compared to the time before.

I specifically remember the day that I reached $100 for the first time. This happened when I was 5–6 years old, and when you’re that age, $100 seems just about equivalent to $1,000,000.

I went to my mom that day, unbelievably proud of myself, and told her how much I’d saved. She decided to make me an offer… She told me that she was willing to give me a $100 bill in exchange for the mess of coins and bills that I’d been holding onto for who-knows-how-long, at that point.

At the time, I felt almost offended. I’d worked so hard for every single penny, nickel, and dime in that piggy bank. Why would I give up all of those hard earned pieces for just one bill? I declined.

This story goes to say that this is just how my mind has always worked. I’ve always been savings-minded when it comes to finances. I’m proud of myself for every bit of growth achieved in my bank account because I know that I worked hard for it. It’s because of this mindset that essentially every opportunity I’ve ever had to save money, I’ve taken advantage of.

How This Method Came About...

When I got my first real job at the age of 17, I knew that I wanted to put majority of the money I made aside for savings. However, I was also a 17 year-old high school girl that wanted some amount of money for gas, fast food, and going out with friends.

I knew that I’d have to devise a system for what I wanted to save versus what I wanted to spend, so I quickly came up with a method that worked for me and I stuck to it strictly.

This method has gotten a little more complex as I’ve aged, taken on bills, and my everyday spending needs have changed, but overall, I use the same exact outline for savings now, as I did back then.

I’ve come to realize that most people, especially young people, don’t have a system like this. When my boyfriend and I first started dating 2.5 years ago, he had $1 in his savings account (the minimum to keep it open), and he often blew through his checking account before even receiving his next paycheck…

I’ve helped teach this savings method to many people like my boyfriend (who now has a solid savings account and money left over in his checking account at the end of each pay period), and I’ve seen how a little bit of structure, plus a clear outline of how to save, can help create positive, long-lasting effects on our finances.

So whether you’re a 17 year-old high schooler that works part time, a full time worker in their mid-20’s trying to balance bills and figure it all out, or someone that’s 30+ years-old, that has just never developed a solid system for how to put money aside, this is the basic structure I use for building my savings account… and it works!

How To Grow Your Savings Account, Step-By-Step

It’s a very simple process but essentially this is how it goes.

Set up your direct deposit so that all of the money from your checks go directly into your checking account each pay period.

Every time you get a direct deposit in your checking account, immediately pay all of the bills that are due before your next paycheck. This should be the very first thing you do every single time you get paid.

The next part is where self control starts to come into play a bit. You’ll need to come up with a dollar amount that is sufficient enough for you to live off of for your entire pay period. This number should be just slightly more than what you would need to cover all of your necessities until your next paycheck.

For example, if the essentials that you need (gas, groceries, etc.) for your entire pay period can be paid for using, say, $500, you’ll want to set your number just slightly above $500 — something like $530-$580 . We’ll say specifically $550, for this example.

So with that number in mind… After you’ve paid bills, transfer everything into savings except that specified amount that you’ve come up with beforehand.

Sticking with the example above, this means that if you had $800 in your checking account after paying all of your bills for the pay period, you would then transfer $250 into your savings account, so all that remains in your checking account is now $550.

You would then use that remaining $550 over the length of your pay period, making absolute sure NOT to draw out of savings if your checking account begins to get low. This is kind of the key of this method. You CANNOT draw out of savings for anything other than emergencies or large funds that are few and far between (like vacation or yearly Christmas shopping)!

You then repeat this system with every pay period. When you get paid, start the whole process over again! And if you had leftover money in your checking account from the previous pay period, when your new check gets deposited, that just means that you saved better than you planned for! If you had $50 left in checking, the next time that you transfer everything into savings (after paying your bills) other than the $550, you’ll now have an extra $50 that went into savings, whoo!

Summary

Self control is the key to this method. It can definitely be hard, teaching yourself not to draw out of savings every time your checking needs more money, if you aren’t used to that, but you can do it!

This system allows you to assure that everything you could need to take care of financially is being handled. Your bills are paid for and you know exactly how much you’re going to keep in checking until your next paycheck, so everything else goes into savings.

Bills. Every day necessities. Savings. The three components of your finances.

If you follow this system and stick to it strictly, your savings account is bound to start growing rapidly before your eyes… You’ve got this!