Saving and investing money can be pretty tough. I know first-hand. Whenever I decided to try to move money from my checking account, into a savings or investment account, it just never seemed like a good time.

There were pressing issues that needed to be taken care of first…like getting a nagging issue with the car needing to be repaired, groceries, equipment for my upcoming children’s sports season. It just never seemed like there was enough money to set aside for saving and investing. It was never the right time…always something to do next month.

Human nature is a funny thing too….no matter how much more money I made in my job over the years, it just never seemed like enough. My salary would increase, but instead of just living the same way… my spending would increase and sometimes exceed my new, higher salary!

After all, I’m human and since we live in a world of limited physical things and unlimited wants and desires, it is no surprise that this happens.

In the United States, why do we have payroll tax withholding?

You would spend it before the government could get their grubby hands on it.

Imagine if you were paid the full amount of your wage and then at some point a tax collector came around to collect the tax, what do you think would happen?

Sure some of it might be saved, but I think human nature is such that it would be spent. Gone. More likely than not, nothing would have been saved.

In the early days of American history, during the colonial period, tax collectors would come knocking on the door to collect payment. Talk about a dangerous job. Back then, many were killed and the lucky ones were tarred and feathered.

So over time, the United States implemented a payroll tax. That way, the employer withholds the tax amount from your wages and sends it directly to the government. You never see the tax.

Certainly makes it easier for the government to raise taxes that way, since you never see it. You never have to write a check for taxes and hand it over when the money gets taken out before it hits your bank account.

In essence, it makes paying the tax a bit less painful (not that taxes aren’t painful already…but I’m talking less painful).

For me, what I realized is that I should have been tarred and feathered, since I was siphoning away money that I could have been saving and investing to improve my life, instead of immediately spending all the money I made.

I needed to find ways to get my own grubby hands off of my own money before I could waste it.

When it comes to saving and investing, why not use the same tactic of payroll tax withholding to your advantage?

This concept has been one of the keys that I have used to grow my wealth over the years, especially

1) Maximize the advantages of your company’s 401k/403b plan

Enrolling in your employer’s 401k/403b plan is pretty freaking painless. You chose a percentage amount of your salary to be withheld pre-tax, set it and move on. Done.

At that point going forward, the money is siphoned off and invested and you don’t even see it. Yep, you now have less hitting your bank account each pay cycle, but you are now forced to deal with it. You HAVE to make it work, by not spending so darn much. You are forced to make some decisions, some cuts to your spending. I guarantee you that you will find that there has to be some areas that you have been spending (sorry….wasting) your money on.

Do you really need to buy your lunch every day at work? Starbucks every morning? Netflix, Disney+?

If you are serious about improving your financial condition, you will make it work. Taking satisfaction in watching your savings grow is a huge reward…something to pat yourself on the back for!

Also, with most 401k/403b retirement plans, the employer will match a certain amount. Maybe it is another 3% or 5%. That is free money that you receive over the course of a year. Maybe you need to look at it from the perspective that you have given yourself a 3% or 5% raise!

Also, another huge advantage to a 401k/403b plan is that you get to use pre-tax dollars, so effectively you get more purchasing power since it is before taxes come out and the amount that comes out reduces the amount of your income that is taxed each year.

Also, some employers (like mine) allowed for an employee to buy company stock through payroll deduction. Just like the 401k retirement account, money was withheld (after tax) and set aside to purchase company shares at the end of each quarter at a 10% discount to the market price that day of the purchase. Not only did I not see the money and had to adapt (like the 401k), but I was already up 10% on my money! I maximized the crap out of this when I decided to turn my finances around, putting 10% of my income into this plan. Yep, it was tough, but it paid off.

2) Setup an automatic ACH debit out of your checking account on THE DAY that you get paid

If your company doesn’t offer a company stock purchase plan, don’t let that excuse stop you. Do it on your own.

Now that we have brokerages like Robinhood making it super easy to save and invest, setting aside even a little bit of money on a regular basis could never be easier.

When you configure Robinhood to debit your checking or savings account on or near the day of your paycheck, you get the benefit of having that money disappear from your grubby hands, with In my mind, the key is to time the debit right when your pay hits your account.

That way, you can’t spend what you don’t have. Again…you have to make do. It forces you to curtail the pressing day-to-day pressures that invevitably lead to spending away your hard earned money.

3) Regularly take spare cash that is in your wallet and set it aside

Do you ever notice when you have some bills in your wallet that it just seems to vaporize into thin air? Perhaps you might be getting up in the morning to get ready to go to work and start to make your lunch (to save money of course!) and then you remember….ah, I got a $20 bill in my wallet…”I’ll just buy lunch today at Chipolte.”

Happened to me all the time. It pains me to think of what could have happened if I had set aside even a fraction of that cash and aggressively invested it over the last 20 years.. How much would I have? $10,000? 20,000? $50,000?

Ugghh.

What I have done over the last 3 years is take that money and put it in an envelope.

Quaint. Old school. Grandma/grandpa type thing to do. I know.

But it works!

I took that money and decided to invest it in Cryptocurrency, going to a Crypto ATM machine and depositing that money, buying several different Crypto’s. Don’t know if you know about Crypto ATM machines, but they are a complete rip-off. Essentially, you lose between 8%-10% of your money as a fee right off the bat.

In my mind though…it was worth it. After all, this was money that would have dissapeared into thin air anyway? I just grit my teeth and fed that ATM on a regular basis. I’ll get into this more on a separate post, but that outrageous ATM fee is nothing compared to how much my money has grown!

You don’t want to invest in crypto’s? Cool. Take that freaking cash, deposit it in your bank account and then go online right away and transfer that exact amount to Robinhood or whatever brokerage you use so you can’t spend it.

4) When buying anything in the checkout line (at the grocery store, Home Depot, Target, etc.), elect to get “cash back”

I love this concept. Don’t know if anyone else does this… but I started selecting “cash back” whenever I found myself in the checkout line. It doesn’t have to be much, $10 here, $20 there….sometimes $60 if I felt aggressive and knew I had enough leeway to do it.

If my grocery bill should have been $280, it ended up being $320 if I took $40 cash back. I’ve been doing this on a regular basis over the last 3 years.

Then, I’d take that cash and put it into that trusty envelope to you guessed it….buy more Cryptocurrency.

Again, the gains I have made from doing this are simply staggering. Think about it, if I took $20 cash back at the grocery store, I hardly missed it. Now, my stack of Crypto is hard for me to miss…it’s pretty big (for me anyway)…..5 figures.

I found ways to make my “cash back” technique hurt so much too.

Instead of shopping as I had been at the more expensive grocery store (I have a Wegman’s nearby, which is VERY expensive), I started going to the Walmart. I’d get up early each Sunday morning and arrive by 6:30 AM so I didn’t have to deal with the crowds and get out of there quick and painlessly.

And talk about the savings! When I first started shopping at Walmart, I remember saying out loud, “DAMN!” and “HOLY SH*T!”, when I saw the prices. Walmart was waaaay cheaper!

So essentially, I ended up lowering my grocery bill each week AFTER my extra “cash back technique”.

Look at it this way….I’ve got 5 figures in Crypto right now for lowering my monthly grocery bill. That’s C.R.A.Z.Y.

I hope this post helps you increase your savings by keeping money away from your own worst enemy…yourself!

Glenn