When I first started to learn about managing finances, I always heard the advice “pay yourself first.” It’s catchy and sounds good, but I had no idea what it meant. Cut myself a check every month? Buy the stuff I want first? How would that improve my finances? I pushed it aside and attempted to follow another common piece of financial advice – make a monthly budget!

I tried. I really did. Many times. I still haven’t managed to do it successfully. There are just too many bills that are paid annually or quarterly or once in awhile-y. I realize that in theory I can break those down into monthly amounts, but my reality was that I failed again and again. What I did notice was that there was often money that carried over and accumulated in my checking account from month to month. At some point it hit me – instead of letting that money sit in my checking account begging me to spend it, I’d transfer it to savings.

I figured out a rough idea of how much was left over each month, divided it by two, and automatically transferred that amount into savings each time I got paid. I “paid myself.” The automatic part is key. If I attempted to do this manually with each paycheck, I would set myself up to fail. I’d forget or not do it “just this once”. Instead, I used online banking to make the transfer happen automatically on pay day. Once that money was  “gone,” there was little temptation to spend it. I didn’t see it when I checked my balance, I couldn’t access it directly via my debit card. I had always been frugal, but putting a few extra steps between me and that money helped me to begin to really build savings.

Around the same time, I started reading thesimpledollar.com every day. At that time all of the content was written by founder Trent Hamm and it was a gold mine. It was there that I learned about the concept of lifestyle inflation. Typically, as we make more money we spend more money, and net little to no increased wealth. To combat this, I added another step to my savings plan. When I got a raise or cut out a bill, I added that amount (or a portion of it) to what was automatically transferred to savings every month. That way, the “extra” money was invisible to me as well. Instead of inadvertently spending it all, I funneled it out of sight and it stayed out of my mind. This allowed me to build savings faster.

I’m so thankful that I’ve finally figured out how to save. This is truly the only way that has ever worked for me. I wish I had known when I first started working. I would have probably had less sushi and more savings.