Save More Money: Automate and Separate Your Savings

Looking back over some of my old posts on saving money (whether for the short-term or for retirement), two basic themes seem to bubble up over and over again: automation and separation. I’ve decided that for me, these are the two necessary actionable steps to truly make savings work.

Let me add that there are a lot of good savings concepts out there: spend less than you make, pay yourself first, live within your means, a penny saved, etc. While these are great concepts, they aren’t exactly action steps you can take to help you save more money.

So, I made an attempt to put the automation and separation ideas in picture form. My paint skills aren’t what they used to be, but hopefully you’ll get the point.


Okay, I know it doesn’t look like it, but that is a mountain (or big fire) in the middle, separating the big spender from his or her automatically saved short-term and retirement accounts. Let’s look at these action steps one at a time:

Automation of Savings

To make saving easy, make it automatic. Set it up and forget about it. Inform your HR department that you’d like your check split into different percentages and give them the bank, 401k, IRA accounts to make this happen. They’ll directly deposit the desired percentage into the accounts.

If they’re not willing to work with you, have all the money direct deposited into a bank and then set up the automatic withdrawals to savings accounts from there.

Separation from Savings

Most people get the automatic step and are already doing it. To make savings stay put though, you need to separate it. There are two types of separation you can set up to make it hard to tap into your savings. Think of it as if you’re setting up an imaginary wall between you and your savings accounts.

First, use 401k and IRA accounts to save for your retirement so that you’re discouraged from withdrawing the funds by their strict tax penalties.

Second, use online only savings accounts (like FNBO Direct and Capital One 360) to save up for short-term savings goals. These accounts don’t come with a debit or credit card, and transfers from these accounts to your other bank account take a few days, lessening the chance that you’ll tap into them readily.

A System vs. Self-Discipline

These two actions steps have been working for me for some time now. I’m a good saver now, not because I’m the most disciplined guy in the world, but because I have a system that works. I encourage you to set yourself up for success with your savings by automating and separating today.

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon. He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence. He uses Personal Capital to track his wealth. All the content on this blog is original and created or edited by PT.


  1. Insurance Hunter says

    Automating the savings process is a great way to help keep you on track. This will also give you a better idea of the money that you have access to after the savings money is removed from the equation.

  2. Jason Unger says

    This post is so money. I can’t believe it took me this long to find it!

  3. karla (threadbndr) says

    If your employer doesn’t let you allocate (or allocate enough accounts to meet your goals) consider putting your paycheck into an account that is just a “holding” account and allocate from there. When I had an employer that only allowed a two way split, I did that and it worked great.

  4. This reminds me of the book, The Automatic Millionaire. Automating as much as possible puts that mountainous-fire (or is it firery-mountain??) between your future and your urges to succumb to advertising and buy stuff.

    Nice work, PT. A future side-hustle as an artist awaits you!

  5. elementaryfinance says

    On my site, I advocate finding money within your current budget to “pay yourself” If you made coffee at home rather than buying it at the local coffee shop, “pay yourself” that $4 straight in to your savings account. Read my article (linked here) to read the rest.

  6. Pay yourself first, right?

  7. And it works. By following the model you had up a year ago for bank-account seperations, we saved for a house downpayment.
    Just wish we weren’t closing on Friday the 13th…