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Becoming Minimalist
Own less. Live more. Finding minimalism in a world of consumerism.
A SIMPLE GUIDE TO START SAVING MONEY
Written by joshua becker · 46 Comments
The recent news on Americans and their saving habits is concerning.
Here are headlines from three recent news articles:
* 47% of Americans would have trouble finding $400
* 2/3 of Americans would struggle to cover $1,000 crisis
* 1 in 3 Americans has saved $0 for retirement
This is not good news. Certainly, our current economic climate is not one that
encourages saving (you know, with low interest rates and all), but that doesn’t
mean it’s not important.
Money in savings provides a safety net for unexpected expenses. Saving money
forces us to spend less than we make. And when the time comes for a major
purchase, you’ll be glad you’ve been saving up.
The problem isn’t that we haven’t thought about saving money, the problem is
that too many of us just aren’t doing it.
There are any number of reasons why people are not saving money. They may not
think it is urgent or they may not have taken the time to set up a savings
account. But my suspicion is that most people are not setting aside money for
savings because they don’t think they have enough to do so.
When everything that gets earned, gets spent, saving is impossible. At the end
of the month, there is simply nothing left over to save. So the action gets
pushed to the next month… and then the next… and the next.
How then can we break that cycle in our lives?
I’d like to offer a simple idea to get you started—in fact, it is the same
idea I give when people ask me about charitable giving.
Start small and start today.
I speak often about the benefit of generosity in our lives and how it improves
our well-being and life satisfaction. The conversation is often followed by a
simple question, “How do I get started? I want to be charitable, I just don’t
see how I can be.”
My answer is this, “Just start with $1. Literally, $1. Go find a cause that you
believe in and donate $1. Don’t be embarrassed. Because of online giving, you’ll
probably never stand face-to-face with anybody anyway. So just start there. Go
donate $1 today and see what happens.”
Of course, my hope is not that the person will end their charitable giving with
a $1 donation. Instead, my hope is that they will donate $1 and soon discover
that they still have food on the table, a roof over the head, and clothes on
their back. They can be generous and still survive.
Soon, I hope, they will try giving $5/month. Inevitably, again, they will
discover their needs are still being met. Maybe they had more capacity for
generosity than they thought. Maybe then they will try $10/month or $15/month.
They did have room for generosity all along, they just needed to discover that
was true.
The same is true when it comes to saving money.
If you want to spend less than you make, start building a savings account,
and begin getting ahead financially, you can do it. Even if you don’t think it
is possible, I believe it is. Start small and discover it is true yourself.
Think of the stress you can begin to alleviate by taking two small steps:
1. Set Up a Savings Account.
It is important to put your money for savings into a different account than you
use for daily, weekly, and monthly bills.
Almost every bank offers savings accounts so check with your local bank
first—wherever you already have an account established. However, sometimes these
local banks have minimum balance requirements for savings accounts. If you are
starting small ($10/month), you’ll want to check that first.
If you cannot find a local financial institution with a no minimum balance
savings account, or if you prefer to conduct your finances online anyway,
I use Capital One 360. They have a convenient, no minimum balance savings
account available—and will even give you $25 for signing up. It’s easy to use—it
took me less than 10 minutes to open an account with a $10 opening balance.
2. Set Up a $10/Month Automatic Withdraw.
Just start with $10. Literally $10. Set-up a savings account today and deposit
$10. Don’t be embarrassed at the amount. If you select the online option above,
you won’t ever have to interact face-to face with anybody anyway.
Deposit $10 and then set up an automatic withdrawal of $10/month, as close to
the day you get paid as possible.
And then see what happens. Almost certainly, you will still have food on the
table, a roof over your head, and clothes on your back. Once you prove that you
can survive and save at the same time, raise your monthly contribution to
$15/month or $20/month. Over time, perhaps, you’ll be able to increase the
amount even more. But the first goal is to prove to yourself that you can save.
Your first investment into your financial security doesn’t need to be a big one.
But you do need to start somewhere.
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About Joshua Becker
Joshua Becker is the WSJ Best-Selling author of The More of Less and The
Minimalist Home. His new book, Things That Matter, is now available.
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COMMENTS
1. Doug says
November 30, 2021 at 8:58 PM
Automatic savings is effective. Forget about that money. It’s a small
amount anway. It will add up pretty quickly without you even noticing it.
Reply
2. Money Saver says
September 7, 2020 at 3:30 AM
One of the easiest ways to save money is to give name brands the boot. In
most cases, the only thing that’s better about brand-name products is the
marketing. Look at that box! The logo is so fancy! And that’s about where
it ends. Generic brands of medicine, staple food items, cleaning supplies
and paper products cost far less than their brand-name, marked-up
friends—and they work just as well too.
Reply
3. Nicole Waterfall says
April 8, 2017 at 10:42 AM
Pay yourself first! This works no matter how old you are and how much money
you make.
Have 10% of your net income taken off at source and put into a savings
account. You soon will not miss it and it will add up quickly. It doesn’t
matter if you make $10 or $100,000 you pay yourself 10% right off the top.
Once you have accumulated enough, you can invest this money for your long
term savings goal.
Having another savings account for emergencies is also a really good idea
if you can manage to do both.
Financial security is so much more rewarding than anything you can buy!
Reply
4. Shelley says
April 8, 2017 at 8:59 AM
I want to also add a word of caution…it takes 2 signatures to open a joint
checking and savings account, but only takes ONE person to close it out and
remove all your money. 3 years ago, my now “ex” closed out our accounts and
took off with Every dime we had saved and accumulated. Think about setting
up an account in both names to pay the bills perhaps, but consider setting
aside savings in your OWN name…wish I had gathered a nest egg…instead was
left penniless…even lost my house! Plan ahead!
Reply
5. Ashley says
March 27, 2017 at 3:53 AM
Target is so dangerous. I love shopping, but I love the satisfaction that
comes with knowing I have money saved away more.
Reply
6. Miranda Roundtree says
December 28, 2016 at 2:54 AM
Thank you, Joshua! I opened a new savings account at my credit union right
away, and my mind is buzzing with ways to fill it. I have a budget, and I
do give some, but I didn’t take savings seriously enough. Starting today,
this will be different.
Reply
7. Marjie says
December 27, 2016 at 6:35 PM
I too never thought I had enough to save until the last couple of years.. I
just decided to start small! It really does grow… amazingly!! The automatic
transfers are the way to go. I now have a few different savings accounts
for different things; son’s college, emergency savings, vacation savings. I
have automatic transfers done weekly so the amount seems like just another
coffee, gas, or misc. purchase that I’d probably be spending on something
else anyway. It’s funny how you think you don’t have enough, but I always
would for the other stuff. The key is, don’t start out with too big of an
amount and don’t steal back out of it unless it really is an emergency!
Reply
8. sonja says
August 6, 2016 at 7:08 AM
Good advice. As someone who has been retired for almost 20 years I can tell
you living on a fixed income is hard. Learning to live simply and save is
easier if you’ve been doing it all along.
Reply
9. Rhonda says
June 28, 2016 at 12:44 PM
Thank you very much for this inspiring post. I am 49 and never saved,
although in recent years I know I should be but never think I can afford it
(my husband being out of work for the last few years has made it more
difficult, but he has part-time work now which has potential to increase to
full-time, so things are on the up :-)), but after reading this I logged
onto my bank account and have set up a fortnightly automatic payment into
my savings account (already had it set up from a brief stint at trying to
save previously), so we will see how it goes. Thank you, again.
Reply
10. pounds to cups sugar says
June 15, 2016 at 9:56 AM
Considering the delicious flavor and overall high quality of this item, I
think that this price is
fair and reasonable. This is a good oil not only just for cooking but
also to produce products such as margarine, mayonnaise and
salad dressing. How many cups is 200 grams of water
Reply
11. Mackenzie says
June 9, 2016 at 11:04 AM
Thank you for this post. I needed this :)
Reply
12. Ximena Cabezas says
May 29, 2016 at 6:06 AM
Dear Joshua, it is always a pleasure to read your articles. Both your
solutions and your approach to life are simple and reassuring. It’s good to
be reminded of good habits.
Thank you for your effort and for the excellent information you always send
us.
Reply
13. Scott says
May 27, 2016 at 10:50 PM
My top tip for people working city jobs: stop buying coffee, cappuccino,
latte etc. Get a French press for the office and a bag of fresh coffee that
will last weeks. Honestly, the small amounts saved from every takeout drink
really adds up! Those small amounts can be your savings.
Reply
14. Rachel May says
May 27, 2016 at 1:09 PM
I split each paycheck to auto-deposit a set amount into checking and into
savings each pay period. This really helps me save money without thinking
about it. I basically give myself 1/2 of my paycheck to live on and pay
bills, and save 1/2. I learned this from a past coworker and it has been a
huge help for me for saving money and paying off debt. When you don’t see
the money, you’re less likely to spend it.
Reply
15. Sammi says
May 27, 2016 at 12:12 PM
I don’t buy non-essentials and I still don’t know if I could save $10 a
month and not miss it for necessary things. I have a lot of expenses
because I am recovering from severe health problems and natural medicine is
not covered under health insurance, I help my mother pay her mortgage, I am
a stay at home homeschooling mom and I am caring for a destitute dying
relative. All that said, I think given the circumstances I am doing the
right thing by spending my money on what is important-my health and helping
those in need- so I am ok with not saving at this time. I do have about
$3000 in savings that I wouldn’t touch unless we had an emergency and I
will start adding to that when I am able. My point is that saving is great
but sometimes it is not an option.
Reply
16. Mary Kay says
May 27, 2016 at 9:54 AM
Thanks for the inspiration! I’ve been meaning to set up automatic
investment for the kids’ college funds. This was a useful reminder. Now
it’s done!
Reply
17. Jeanne says
May 27, 2016 at 9:37 AM
I used to know a wood shop teacher and he made me what he called a “FUN
FUND.” This was etched into the side of an octagonal, wooden bank…that was
nailed shut. I stuck change and occasional dollar bills – I REALLY had to
know when it was time to bust into it since we had to take a saw and cut
the top off!
(We did it neatly so we could reattach it and start over!!)
Reply
18. Jeanne says
May 27, 2016 at 9:08 AM
Thank you for writing this! I KNOW I missed out on saving thousands of
dollars by not enrolling in my company’s 402b..I didn’t understand the
theory of pre tax contributions and finally started small and love to watch
it grow!
I too live by a spreadsheet to know where every penny goes and have been
able to save almost $1,000 in the past five months!!! I now have two bank
accounts-both with direct deposit. One is for general household bills which
are all paid automatically. The other is for weekly spending including
groceries, gas, birthdays, hair appointments, etc. AND I DON’T FEEL
DEPRIVED AT ALL!!!
And then there’s the minimalizing around the house…what a cleansing
experience!!!
Reply
19. John says
May 27, 2016 at 9:03 AM
At my work we have a deferred compensation plan, which I contribute to
automatically with each paycheck. Been doing it for years and have a nice
sum now. Your post is great advice!
Reply
20. Brenda Laurence says
May 27, 2016 at 8:59 AM
I keep my emergency fund in a lock box at my bank which makes it very
inconvenient to tap in to.
Reply
21. Noel says
May 27, 2016 at 8:05 AM
Our grandson is almost six. When he was born, I started a savings account
for his college. As of right now, I have saved almost $8,000 in that
account. And we are retired grandparents with a small income. It can be
done. Every quarter I save for him makes me feel good!
Reply
* Jeanne says
May 27, 2016 at 9:34 AM
That is wonderful Noel! What a great gift to give him at some
point…graduation, college, wedding..good job.
Reply
* Stacy says
May 27, 2016 at 8:52 PM
Spot on! Kids grow up so fast and in a few years your grandson probably
won’t remember any toys or trinkets you bought him, but he will bless you
when he needs tuition or money to establish his future.
Reply
* Nicole Waterfall says
April 8, 2017 at 10:53 AM
Good for you Noel. We have done the same for each of our grandchildren.
Even a small amount every month works because it adds up over the years
until they are ready for college. I think that investing in their future
is the best gift you can give your grandkids.
For any of you who live in Canada, check out the benefits of a Registered
Education Savings Plan. [The government of Canada will match your savings
inside an RESP. The match is called the Canada Education Savings Grant
(CESG). Everyone gets the 20-per-cent match on $2,500 contributed per
child per year, but if your income is lower, you can get a 30-per-cent or
40-per-cent match on the first $500 saved each year.]
Reply
22. Alisha says
May 27, 2016 at 7:48 AM
I’ve started using an app called Digit that slowly pulls money from your
checking and deposits it into a savings account that is not connected to
your checking account. It sends me text updates daily and I can always
check my balance. It seems I’ve already put away $250 in two months pretty
painlessly. I didn’t even miss it. I think sometimes it’s easier having
something pull out the cash than making the decision to do it myself!
Reply
23. Judy says
May 27, 2016 at 5:18 AM
A lady I work with told me she puts EVERY $5.00 bill she gets into savings.
She told me that you’d be surprised just how quick it all adds up…and you
never miss it.
Reply
* Belinda Thompson says
May 27, 2016 at 11:31 PM
I started doing this some time ago and it really is amazing how much can
be put back. Now when I end up with a $5 in change it’s a mental fist
bump “cha-ching”.
Reply
* joy perkins says
December 28, 2016 at 5:29 PM
I also never spend $5s but instead give them away – either directly to
someone that needs it or as an additional tip to someone that gives me
good service.
Reply
* Jo Jo says
April 8, 2017 at 6:26 AM
In the U.K. we have a £2 coin which you don’t see all that often and I do
the same, put it into a tin until I have £100 then bank it.
Reply
24. Arcadia Trask says
May 26, 2016 at 8:46 PM
I like the idea of an automatic withdrawal every month into a savings
account – but it’s not a full solution. Most of the 20 – 30 somethings I
know have no idea how to budget, and while a savings account is a good
first step, it doesn’t solve the problem of ‘whoops! I overspent, gotta use
that $20 I saved for gas.’ Simple bank, You Need a Budget (YNAB app) and
checking out the subreddits r/frugal may be a better plan over all.
As always, YMMV. http://bit.ly/1UgWVam
Reply
25. Ula says
May 26, 2016 at 8:45 PM
For me the best motivation to saving is seeing my spendings. I always
thought I spend little but after the first month when I have written down
my every spending – I was terrified! “just this” and “only that” purchases
are adding up… Tracking your expenses is necessary.
Reply
26. Jada says
May 26, 2016 at 12:08 PM
I think of it as like its a bill that had to be paid and do it on the same
day of every month, same amount. That mentality keeps me budgeted.
Reply
27. Julie says
May 26, 2016 at 6:54 AM
I love your posts always but this one has really hit home. Thank you so
much.
Reply
28. sal says
May 26, 2016 at 6:32 AM
Good place to start for those daunted by naming every dollar. Shocking
stats in your links. Thankful for the emergency fund and savings we have
amassed on a student budget for our family of 8 in the past 18 months. Life
is very different though the budget is tight. For us the key move was
decluttering and beginning a journey into simplicity and intention. The
finances have naturally followed. Now every dollar has a job and is spent
on paper before it’s spent in real life. Dave Ramsey’s a great resource but
this blog post makes it much more accessible for those not prepared to go
full on DR at the outset.
Reply
29. Daisy @ Simplicity Relished says
May 26, 2016 at 6:03 AM
I’m so glad you wrote this. It’s unfortunate that so many Americans grow up
without being exposed to proper saving habits– and then our consumerist
culture exalts spending as a vital component of our identity. I’m hoping
for a better future; even the fact that our world is so much more connected
now– and information is readily available– is an encouraging sign.
Reply
30. Katie says
May 26, 2016 at 3:22 AM
I love this! One thing I learned growing up is that when you have two
incomes (you plus your spouse for instance), live off of the person who
makes the least amount monthly and save the other income. My husband and I
recently got married and have been doing this the past couple of months.
It’s nice to know that you can survive off of one salary if one of us were
to lose our jobs. Plus, it helps to increase our savings at a faster rate.
:)
Reply
* Mimi says
December 28, 2016 at 6:41 AM
Wow! This is such a great idea. Thank you for sharing.
Reply
31. Wilkop says
May 25, 2016 at 9:22 PM
We have all heard the proverbs like “a penny saved is a penny earned”,
“unless things change they stay the same”, “the longest journey begins with
a single step” and many others. None of these mean anything if we don’t
take action. Thanks for clearly describing a simple set of actions almost
anyone can take as the “single step” at the beginning of their journey.
Reply
32. Rosanna says
May 25, 2016 at 8:06 PM
I like this post. I would add that one more component to saving is having a
written budget. When my husband and I started tracking how much we spent,
then developing a written budget we were able to go from not being able to
save anything to having a sizeable extra to save, with no income increase.
Reply
33. Lisa Avellan says
May 25, 2016 at 6:44 PM
When my husband and I started tracking every single dollar that came in and
went out, we were surprised by all the wasteful spending and found ways to
give and save more. I’m also thankful for a sweet woman who gave us a
ceramic piggy bank for my first baby shower. Our daughter is now 4 and
loves feeding the pig every night before bed. And we love teaching her the
importance of saving. Best shower gift we received.
Reply
34. Tony W says
May 25, 2016 at 6:21 PM
“Start small and start today” is GREAT advice for young and older alike. I
am still surprised how quickly savings have accumulated. Having a sizable
nest egg can reduce stress and add quality to your life.
Reply
35. Martha says
May 25, 2016 at 5:14 PM
Thanks Joshua…I really needed this!
Reply
36. Fredt says
May 25, 2016 at 3:38 PM
and the big one: Stop spending on all non-essential items.
Reply
* joshua becker says
May 25, 2016 at 3:53 PM
I actually think one of the benefits of the monthly withdrawal set-up
(especially for people with very tight incomes) is that the automatic
withdrawal helps people further decipher essential from non-essential.
Reply
* SE Connelly says
May 26, 2016 at 6:41 AM
At Chase Bank, if you set up an auto transfer from checking to savings
once a month, you will not have to pay a savings account fee. (Please
ask about this policy if you choose to bank with Chase.)
Reply
* Paige says
June 21, 2016 at 1:17 PM
To add onto this reply, Chase often does promotions to draw new
customers by giving a sizeable amount of money to a new customer for
setting up a new account that has a monthly automated deposit. In my
case, I received $250 for opening a new account that has an automated
deposit each month. I did this three years ago and have been very
pleased with Chase ever since. I don’t work for Chase or anything
like that. I just want to let others know that if they see their
offers, they are legit.
Reply
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