The Diary of a Budgeter – Day 4

Bobbi Olson Articles, The Diary of a Budgeter

The saving secret

A few months ago, after interviewing Jamie Beath, creator of, I shifted my budgeting style a bit, to try his saving secret. You can listen to the interview here.

For the most part, it’s been highly beneficial for me, and I really love being able to budget for an entire month at a time, after years of budgeting each paycheck. It means I’m that much closer to truly breaking the paycheck to paycheck cycle.

But I’m not at the point where I can live on one paycheck for the entire month, so I have to transfer between checking and savings more than I would like – especially since I’m breaking one of his rules. He says we should direct deposit to savings and just transfer what we need to checking. My direct deposit into checking is what keeps my checking account free, so I let it go to my checking, then transfer to savings and start there, but it’s made for extra transfers that I’d like to avoid. In addition, one of the many benefits of the saving secret is to get a little extra cash from the interest.

So today it hit me – I could actually keep most of my money in savings, until the first of the month, when it’s time to pay my credit card bill! I use my credit card to pay for just about everything – groceries, gasoline, dinners out, and as many bills as I can. I’m confident about doing this, thanks to YNAB, which makes it very easy to use the credit card, but track my expenses as if they were coming from my checking account, so I never spend more than I have. I simply use the credit card instead of a debit card, then pay the bill in full every month. No interest payments, but a bit of cash back! I love it!

I’ll keep some money in my checking account – enough for the few things I pay cash for, the couple of bills that won’t let me pay by credit card, and a little extra just as a cushion. The rest will stay in savings all month, so I can collect as much interest as possible!

This also got me thinking about all the time I spent (pre-YNAB) juggling money in multiple savings accounts. This was the best way I knew, at the time, to categorize and separate my money. But most banks don’t start paying interest until your account reaches a certain dollar amount. It took me a while to realize that if I put all my money together, I’d probably hit that dollar amount, but separate, it wasn’t enough. So I was leaving money on the table, just by keeping multiple savings accounts. At the time, I would have been ok with that, because I’m willing to forgo a few dollars for the peace of mind that comes with categorizing my money. But thanks to YNAB, I don’t need separate accounts! The software lets me virtually separate my money any way I want, change it 50 times a day, if I want (with no transfer fees) and it all stays in one place. Just another reason to love YNAB!

I’m excited about trying this new approach, and will report back on my progress.

Are you trying something new? Share it with me!