Pay Day is Not Every Day But Today and Here is My Frugal Way

by David Ning · 10 comments

ten dollars

I will feel rich, I will feel happy, and I will feel obligated to spend some money. Or will I? I actually get a paycheck every 2 weeks, and other than feeling richer on paper, there really isn’t much different on this day.

First thing in the morning, I visited Wells Fargo’s website to make sure the direct deposit went through. Then, I logged into my credit card website to see how much I owe in the next payment. Once I subtracted the difference, I deposited most of my paycheck into the online savings account to be allocated to my investments.

What I do is quick, boring but effective because I’m able to save so much money this way. By moving my income after set expenses into my savings/investments, I won’t feel like I have a ton of money to slurge. I know this is all psychological but it works.

In a way, this is the manual and enhanced version of “automatic savings” and “pay yourself first”. I do this process manually because I am not able to make this automatic, as I don’t really know the exact amount since my income fluctuates. Also, my alternate incomes are always irregular and setting scheduled transfers wouldn’t work in my situation. It is an enhanced version because I am not only moving a set amount each month but a vast majority of the excess income into savings first. Since I do not really consider my saving and investment accounts as a source of money I can currently use, I end up increasing those accounts rather quickly as I VERY rarely withdraw from those accounts.

This is my way of being frugal on my pay day. How do you spend yours?

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{ 10 comments… read them below or add one }

Randall November 16, 2007 at 10:06 am

I do pretty much exactly what you do. I just took it an extra step and automated pretty much everything. I only have two or three bills I have to ‘manually’ do anything about.

The (virtual) money doesn’t even get cold. Makes life MUCH easier.

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MoneyNing November 16, 2007 at 11:17 am

Randall: Having everything automatic is definitely great. I wish I can do that :) For example, my 401k is automatic and I don’t have to worry about it at all. No looking at the market or anything like that because whether it is going up or down wouldn’t matter as I periodically buy shares of the funds anyway.

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GeologyJoe November 17, 2007 at 2:15 pm

Direct deposit is the way to go. What I did was figure out all my monthly expenses then determined if there is any ‘extra’ amount. 20$-50$-100$-whatever.

I then set up a second savings account at a different bank and have this money funneled to it with each pay period. It’s money I have access to but don’t see day to day or even month to month. It just builds up and is there when I need it.

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MoneyNing November 17, 2007 at 8:02 pm

GeologyJoe: That’s pretty much the same strategy that I’m employing so I must say that it’s a good one :D

I think EVERYBODY should do this because we always spend more when we think we can afford it.

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ningpo November 23, 2007 at 1:58 am

Hi, I want to congratulate you for mentioning and exercising “pay yourself first” . Don’t stop, zero out those cards, I am positive that you can. SUCCESS

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Ivan November 29, 2007 at 4:40 am

Hi, my name is disman-kl, i like your site and i ll be back ;)

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SouthernbytheGraceofGod February 21, 2008 at 8:34 am

With Direct Deposit, you never have your hands on the money, its easier to allocate to savings, investments, bills and the like. And yes, you don’t feel like you’ve got “MONEY”. But it works, and its an effective budgeting tool. My income is always direct deposited. My hubby’s is’t because his company doesn’t provide it. So, its a trip to the bank and always an argument about how much to put in his pocket. (We have a mixed marriage frugal/spendthrift). Thanks for another insightful post.

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PaydayLoansMan July 27, 2009 at 8:28 am

I like your psychology, I employ the same method when I get paid. 1+

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Travis May 28, 2013 at 3:54 pm

With direct deposit I was able to set my paycheck to deposit into 2 different accounts. My paycheck is pretty consistent but when I do get a bonus or overtime I don’t really see it because it gets funneled into the “overflow” account.

This way I can live on my “fixed” income and still automate my savings with what is left over.

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Georgina Goosen July 12, 2013 at 9:26 am

Thank you very much. I live in South Africa and I do not feel alone if I hear other people in other countries have to make the same sacrifices for value that is worthwhile. I appreciate all the advice and try to follow as much as I can. When I have paid off my home loan, I shall be very happy.

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