The Gateway Drug to Extreme Savings

If there’s one thing us $$$ bloggers love more than money, it’s the chase of the money. And during this chase we like to get into all kinds of shenanigans which to the outside world seems “ridiculous” :)

We do such things as:

  • Cutting out cable
  • Going on No Spend months
  • Selling all our crap
  • Moving into tiny homes
  • Paying off our debts (*gasp*)
  • Juggling multiple side hustles
  • Striving for early retirement in our 30s
  • And one of our personal favorites: Saving 50%-75% of our income

But as sexy as these are, they’re not always doable for people either out of preference or the current financial stage they’re in, so instead we look for gateway drugs to get us hooked and moving in the right direction ;) And today’s drug we’re offering up is the one that gets you closer to extreme savings!

It’s called the “Save 50% of all your EXTRA money” pill, and once you take it you can’t stop.

Similar to saving 50% of all your income (which is often cited as “not possible” and “why the hell would you want to do that??”), this one gets you started by concentrating on all the extra money that comes in vs messing with your normal income. Things like raises, bonuses, birthday cash, and any other random dollars you might come across in daily life.

By taking this pill you get the following “highs”:

  1. A larger savings account once and for all!
  2. Less guilt from spending the rest of your money (i.e. the other 50%)
  3. An improved mood without any side effects ;)

And the beauty is that it’s all “extra” so you won’t even miss it! Not unlike my Challenge Everything experiment the other year which ended up netting me $5,484.07 after a year of stashing.

In fact, that’s a great real-life case study on how this 50% gateway drug could look. Here’s a snapshot of what this $5,400 consisted of:

extra money challengeThe first three areas were from cutting down expenses, but the last three are all categories that would fall under our “extra” money theme here. “Stuff sold,” “change found on the ground,” and “random money”. (With random money including gift money, medical reimbursements, tax refunds, and even an out-of-the-blue lawsuit check that found its way to us (thanks Toyota!))

If we combine those last three areas there, we’d have a solid stockpile of $2,980.34.

Now in a perfect world you’d bank ALL of it if you could (which is exactly what we did), but going with this new 50% rule you’d still be looking at a respectable $1,490.17, or roughly $125/mo. All extra money on the side, and all money we weren’t counting on in the least! And then we’d still have the remaining $1,500 to blow on whatever we pleased too! Woo!

So it’s a nice win-win all around, and gives you an easy “rule” to follow as well. Then when you’re all hocked up and addicted, you increase the dosage and inch even closer to the more “extreme” routes of 50% or more of your overall income! Sounds crazy at first, but not after you get your first taste!

Give it a shot and see how it goes… This is one drug your mamma would actually approve of ;)

PS: “Saving” can also mean investing or paying off debts too – whatever your main goal is!

[This post was originally posted in November of 2015, but had to bring it back for all new savers out there ;) It’s a hack one of my best friends has been doing for years and it works beautifully!!]

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  1. Chris @ Flipping a Dollar November 11, 2015 at 6:11 AM

    This is so true. When I first saw people who save a huge amount, I thought it was crazy. Then I realized that I was already putting in ~6% into my 401k (with a match too). On top of that, now I needed to just compare my cash flow and do something with the postive end result (we use YNAB for this).

    In the end, we don’t stress a lot about it but still get ~50% savings rate. This has two implications: 1 – we can retire earlier and 2 – we could also live off of half of our income if need be!

    1. J. Money November 11, 2015 at 10:59 AM

      That 2nd part is key. There may come a time when you go down to just 1 income and knowing you’ll be still fine is pretty empowering :)

  2. Thias @It Pays Dividends November 11, 2015 at 6:47 AM

    There is a great alternative for those people who think there is no reason to put themselves through living off 50% of their income (even though many people will tell you that if you get your values in the right spot, it isn’t too hard – I can’t speak for that though because I’m no where near 50% right now). By giving people permission to spend some of their extra money, it gives a win both to savings and instant gratification when negotiating with yourself.

  3. Kalie November 11, 2015 at 7:18 AM

    Great idea! We have made a lot of headway with saving/early debt payoff by putting almost all gift money, bonuses, side hustle income, etc. toward it. Even 50% would make a big difference and seem very doable.

  4. Michael @ Financially Alert November 11, 2015 at 7:20 AM

    Great idea J$!

    Most people really hate giving up what they already have, so this gateway drug to savings is perfect.

    50/50 savings/spending seems doable by anyone. I’m definitely gonna challenge some friends with this one. :)

    1. J. Money November 11, 2015 at 11:01 AM

      Easy to remember and calculate in your head too! :)

    2. Stockbeard November 11, 2015 at 2:53 PM

      +1, this is a great way to introduce less frugal friends to the savings frenzy. J, I totally love that you call it a “gateway drug”, I’m going to steal that.

      1. J. Money November 13, 2015 at 4:32 PM

        Please do! Would love for it to hit the media and go viral and everyone starts jonesing for some savings!! :)

  5. Mr. Largo @ Band of Savers November 11, 2015 at 7:22 AM

    Our financial plans seem to change forms every few years as our life circumstances change but our current financial plan effectively invests 100% of any EXTRA money into either our mortgage or our vanguard account (on a 50-50 split). I just posted an article about it here:

    But you also have t realize that we’ve been hooked on maxing out our savings rate for years, since childhood really.

    1. J. Money November 11, 2015 at 11:02 AM

      Even sexier :)

  6. Sarah Noelle @ The Yachtless November 11, 2015 at 8:04 AM

    Wait, I can understand not having cable, but do you really not have internet? And if you don’t, how are you maintaining this site? And if you do, what is the “cable/internet/phone” entry in your table? (I looked at the link to your “Challenge Everything Complete!” post and I don’t see the answer there either.)

    In any case, yay gateway drugs to saving! I think my gateway drug was staying away from restaurants for a month and seeing how much money that saved me! That totally broke the habit, and made me think a lot about what other habits I can change.

    1. J. Money November 11, 2015 at 11:04 AM

      I still pay for internet :) The list up top is just what a lot of $$ bloggers do in general. I WISH I did all those because I’d have been retired at 30 living in an RV by now – hah!

      But we have killed TV just a couple of months ago… only thing I really miss is watching football, but the savings and overall peace of it all (never having to call them again!) is well worth it to us.

  7. Reelika @Financially Wise On Heels November 11, 2015 at 8:10 AM

    Great point for sure! We currently live on one income and save the other. It kind of gives us peace of mind. Another thing is that we have decided to live on lower income and save the higher income and so far so good. But it comes with sacrifices as well. For instance living quite frugal and also side hustling as much as possible.

    1. J. Money November 11, 2015 at 11:05 AM

      I love that route SO MUCH.

      And cannot wait for my wife to get a job so we can start testing this stuff out ourselves! :)

  8. Penny @ She Picks Up Pennies November 11, 2015 at 8:10 AM

    Yup – saving your side hustle is pretty painless. Though I started side hustling for wedding shoes, I’ve since earmarked the money for things like a new AC unit and now our mortgage. We currently pay double payments plus my side hustle – it makes the slow road not so slow ;)

  9. Tai November 11, 2015 at 8:16 AM

    This is a great idea, J$! I currently use a certain side hustle to pay off debt quicker and another one to save. Definitely requires an ability to stay focused and disciplined.

  10. Mrs. Money Monster November 11, 2015 at 8:26 AM

    I would LOVE to save 70% of our income. In the meantime, we are definitely going to implement saving 50% of the extra. Thanks for the money saving tip, J. Money!

    Rock on!
    Mrs. Money Monster

    1. J. Money November 11, 2015 at 11:05 AM

      DO IT!!!! :)

  11. Jason Hull, CFP November 11, 2015 at 8:53 AM

    I love this idea. It’s actually a topic that we’ve been debating how to model out in our financial planning software. The ideal is no lifestyle inflation; however, we’ve seen research that shows that somewhere between 9% and 22% actually goes towards financial growth (savings, paying down debt, paying off medical bills), and the rest goes towards lifestyle inflation (link:

    We could actually model this out and show the impact of a hypothetical family who does this, like we did in Let me know if you’d like to see this research.

    1. J. Money November 11, 2015 at 11:06 AM

      I think that’s a great thing to allow people to test and see :) Sometimes all it takes is some pretty graphs!

  12. Hannah November 11, 2015 at 9:12 AM

    Great idea! We’ve been banking my side income for the past few months. Mostly because I live in fear of the IRS, but once we figure that all out, we can use it for something awesome (like compounding interest, or a bathroom renovation!)

  13. KevanderHolyfield November 11, 2015 at 9:18 AM

    Timely post! I just received payment for a side gig but used it entirely to pay off various debts once and for all, which brings me to the ‘PS’ note at the bottom of this post. Who considers paying off debt as saving, and why or why not?

    In my mind, paying off our mortgage (specifically, the principal) is a form of saving because, barring some catastrophe, we ultimately end up owning a real asset which can be converted (with some inefficiency) into a pile of cash. But it’s not the same as building up an actual pile of cash. So what are the rules for calculating a savings rate?

    1. J. Money November 11, 2015 at 11:10 AM

      I think a majority of $$ bloggers would agree with you because it’s an action that grows your net worth. At least that’s how I look at it. Any time you pay off c/c debt, loans, mortgages, etc your wealth goes up. Just the same as if you physically saved the money or invested it (outside of market fluctuation and what not). And in fact – paying off debt actually helps you save all that interest tacked on too which is similar to investing as well.

      So to me it all goes towards your financial well being which is really the point of it in the end :)

  14. Free to Pursue November 11, 2015 at 9:22 AM

    Yes. All people need is a taste for saving, just like credit card companies try to get us to have a “taste for credit” as Elizabeth Warren likes to say.

    Taking small steps to get a feel for what saving is like can help definitely help develop a taste for more. And it tends to accelerate because savers also are less likely to be borrowers and all that money saved on interest just makes it easier to save more over time.

    Move over “debt snowball”. Here comes the “savings snowball”. :)

    We didn’t start out saving 50% of our income, but now we’re doing just that (at least this year AND, truth be told, it’s feeling pretty effortless). I give major kudos to anyone who gives saving a good college try.

    1. J. Money November 11, 2015 at 11:12 AM

      Savings Snowball – hah! If only the interest matched up with the debts we’re paying off! :)

  15. Chris November 11, 2015 at 9:25 AM

    I’ve been reading this neat book I got at the library. The $1,000 Challenge (How One Family Slashed its Budget Without Moving under a Bridge or Living on Government Cheese) by Brian J. O’Connor. This $1,000 is on their MONTHLY bills. It reminded me of your Challenge Everything series.

    1. J. Money November 11, 2015 at 11:12 AM

      Yeah! We actually just gave that book away on this site a few weeks back :) I never got around to reading it but heard it was interesting.

      1. Slackerjo November 12, 2015 at 5:56 AM

        The library is your friend. You can still read it!

  16. John @ Frugal Rules November 11, 2015 at 9:56 AM

    Excellent point J! It reminds me of the living on one income approach if you have a partner that works – I think someone mentioned that above already. The benefit of taking the side hustle savings approach is it’ll likely result in you starting out with smaller steps and seeing it can be relatively painless and thus build that momentum. It’s all downhill from there!

  17. Lance @ HealthyWealthyIncome November 11, 2015 at 11:07 AM

    Suppose you have no consumer debt, no car bills, no school bills, and you have cut your expenses as J listed above and your mortgage is very modest. What else are you paying for? We are at 50% and hope to retire somewhat early, but I like working as well. Just nice to have the money available. No reason to spend extra money just to spend it. We had two incomes early on and saved one. My wife made more than me so we saved hers. Then she quit and we were down to one, then over the next two years I got raises and a huge promotion and my income increased above and beyond what we were previously earning together early in our marriage, back to saving at least 50%. It may not always be 50% but why not save it if you can.

    1. J. Money November 11, 2015 at 11:14 AM


      And the nice thing with savings is that you can always spend it later if you change your mind and hate it all ;) Which of course no one has ever thought – EVER.

  18. Amanda S @ Passionately Simple Life November 11, 2015 at 11:30 AM

    Being able to use my extra money to help pay for bills and my second paycheck as extra payments on my student loans has been amazing! I’m able to give myself a small allowance to pay for the week’s extras right at the beginning and once that money is gone, I know that I’m not going to want to drive all the way to the atm to pick up more money. It’s been such a motivating past few weeks I can’t wait for this time next year to see all the progress.

    1. J. Money November 13, 2015 at 4:43 PM

      That’s a great trick!

  19. Maggie November 11, 2015 at 11:31 AM

    Everyone needs a gateway to saving more abs this is a perfect suggestion because once you see the impact that kind of saving can make, it gets addicting!

  20. Abigail @ipickuppennies November 11, 2015 at 12:31 PM

    Yep, I always advocate that people actually save their savings. (Save money by cutting cable? Bank it! We’ve saved more than $2k in just over 2 years) But it makes sense to extend that to sell-offs and any side hustles.

  21. Romeo Jeremiah November 11, 2015 at 1:16 PM

    Unfortunately, there will always be a reason why one can’t or won’t save. Saving (nor budgets) isn’t sexy enough. There needs to be a deeper reason why one wants to save 50%. You find that magic drug and folks will be ‘stoned’ all day. :-)

  22. Jack November 11, 2015 at 1:28 PM

    Right now we save all our extra money that comes in outside of my salary. It goes into either our children’s college fund or our retirement / FI fund.

    Living on one salary with a family means saving a lot less than 50% but at least we’re still saving and investing.

  23. Dee @ Color Me Frugal November 11, 2015 at 2:56 PM

    Great idea! As soon as we get the last of our student loan debt gone (summer 2016!!) we plan to have a TON more fun saving money as opposed to throwing it all at our lenders. Cannot wait!!

  24. Prudence Debtfree November 11, 2015 at 5:39 PM

    I love it that you’re writing this challenge because it’s a great first stepping stone. It puts into practice two key ingredients that evaded me for far too long:
    1. a basic awareness of where the money goes (for me, it always used to just evaporate)
    2. a proactive attitude towards money (rather that a reactive, spend, spend, spend attitude)
    The stories of 70% savings rates are impressive – but sometimes they end up being discouraging because they seem so impossible. This challenge is possible for everyone.

    1. J. Money November 13, 2015 at 4:46 PM

      Exactly :) Anyone can do it and it’s not that painful because it was all *extra*!

  25. Jacob November 11, 2015 at 6:48 PM

    I’m working on 100% savings rate for side income, but life keeps coming up with other ideas. I saved for the past few months didn’t touch a dime, then we had random medical, home and car issues drain it all.

    I will continue to separate my side income with the goal of NEVER touching it….but I’d rather use my extra income than my EF. :)

    1. J. Money November 13, 2015 at 4:46 PM

      I agree :) Kinda like a buffer!

  26. Harmony November 12, 2015 at 11:13 AM

    Thanks for the PS – we are currently “saving” all of our extra money towards paying off debt, and a large portion of our income as well.

    I thought of you when I picked up a penny the other day – every little bit counts!

    1. J. Money November 13, 2015 at 4:55 PM

      (ow ow!)

  27. Taylor @ Freedom From Money November 12, 2015 at 12:14 PM

    This is BRILLIANT! I seriously love this so much and am going to direct all my friends who want to save more to this post. Even though I’m already saving 50% of my income, I’m going to apply this to my birthday money and other “free” money that comes into my life. Much too often, I fall into the trap of spending it on fun (and random) things almost immediately.

    1. J. Money November 13, 2015 at 4:56 PM

      Haha… so glad you like it! And the beauty is that you can STILL spend and have fun too – just half of it :) Your friends can thank me later with free beer haha

  28. Adrienne November 12, 2015 at 1:31 PM

    Thanks for something so relevant to people just starting and not able to make huge changes all at once. It really helps with motivation!

  29. Jennifer November 12, 2015 at 10:09 PM

    We bumped up my husband’s (primary breadwinner) 401K contribution to 50% of his income for the last few months of 2015 to fully knock it out. We felt safe doing this since we just sold the home he was in and mostly underwater in for 10 years. That house surprisingly sold so well it actually sold for higher than we bought our new bigger house for! So of course I pass that good juju onto you and your house you are hoping to sell! So the home sale fund made us feel safe going to 50% contributions. We’ll the first paycheck came and with a new promotion it is enough to cover our expenses plus some. So unbeknownst to us we can live on 50% AND we still have that house sale money to go into kids’ educations, investments, savings for our next car someday, vacations savings, etc.

    1. J. Money November 13, 2015 at 4:58 PM

      Yayy!!! That is wonderful – congrats!

      There was a time I was putting 90% of my paycheck to max out my 401k and it was a wild ride haha… But it’s been paying dividends ever since! Quite literally! :)

  30. Ralph December 29, 2015 at 9:09 AM

    This must be in my DNA. When I was a child, or grandparent’s would give us change to use at the candy counter of a nearby restaurant. If we each got fifty cents my siblings would spend all of theirs but I would buy twenty-five cents worth of candy (a respectable amount back then) and put the other quarter in my piggy bank.
    As an adult, I’ve made it a goal to save fifty percent of my after-tax income at every full-time job I’ve had. I’m nearing fifty years old now and I’m much better positioned for retirement than many of my coworkers.

    1. J. Money December 31, 2015 at 11:37 AM

      NICE!!! 50% is no small feat – that is incredible that you continue to do it after all these years! Especially the hardest when you’re trying to “move up” in the world yada yada yada.

      Very inspiring!

  31. B.C. Kowalski December 29, 2015 at 12:13 PM

    Ha – I keep seeing advice my father gave me a long time ago. If only it hadn’t taken this long to sink in! Now extra money generally goes toward my house fund. One thing that helps me save – I have a separate divide in my savings account and money automatically goes into it every month. It was the first thing I did in terms of savings because it’s like you never “have” the money to begin with. Made it eases for me to start, anyway!

    1. J. Money December 31, 2015 at 11:38 AM

      Yes! A great plan indeed… Co-mingling of cash makes it harder to save/see the momentum. I’m all about separating out the $$$ from each other.

  32. Michael @ NTPNW December 29, 2015 at 4:37 PM

    Good idea J Money. You are definitely correct, saving money can become an addiction. What we did was set up our savings plan on auto pilot after we were consumer debt free. Once we became accustomed to the amount we where saving we then increased the amount. Slowly overtime it got us to where we are today saving more than 50%. Now where always trying to beat the previous year saving amount and look forward to earning more dividends year after year. Yep I am totally addicted to the savings drug.

    1. J. Money December 31, 2015 at 11:40 AM

      HAH! Awesome… And a damn good position to be in, well done sir :)

  33. Mel @ brokeGIRLrich December 29, 2015 at 8:34 PM

    LOL. Cool idea. I think it’d be interesting to do a follow up piece on what successful bloggers gateway drugs were! I think mine was actually the first time I used my emergency savings. It was so incredible to not feel completely screwed and financially despondent over what was happening to me that I became kind of obsessed with building it up – which turned into an overall determination to get much more financially savvy!

    1. J. Money December 31, 2015 at 11:42 AM

      That’s not a bad idea actually :)

      Mine would be watching my 401k account grow and realize that – amazingly enough – if you never touch it it just keeps going UP! Haha… So I tried to game the system left and right grabbing my free matches and maxing it out every year until I eventually left and went to work for myself… But damn do I miss those matches.

  34. B.C. Kowalski June 10, 2019 at 10:44 AM

    My old man always banged this drum when I was growing up. Of course I hated it — I wanted all the Nintendo games I could buy! (Not that it mattered, I was grounded from Nintendo more often than I wasn’t).

    I think in reality though I skipped this step. I saved a tiny amount when I started working full time again after finishing my degree as an adult, but when I got into FIRE, the switch flipped and I always want to invest first. I’m still excited to cash my paychecks but now the excitement comes from growing my investment account!

    1. J. Money June 10, 2019 at 2:06 PM

      I remember saving up for a Nintendo Gameboy for like 3 years, and then when I finally had the money for it I didn’t want to spend it anymore cuz it took so much hard work! :) Then years later I picked one up for like $15 at a yard sale, haha…

  35. dmadeb June 10, 2019 at 1:14 PM

    Ha ha “hocked up” – great freudian slip!

  36. Abigail @ipickuppennies June 10, 2019 at 2:32 PM

    Growing up, I had to save 50% of all birthday and holiday money — and even babysitting money. It was a good lesson in how to treat extra funds. Of course, it’s great if you can save all of the extra funds, but since that’s not possible (or just desirable to some people) then saving 50% is pretty darn good too!

    1. J. Money June 10, 2019 at 2:53 PM

      I love your mom so much, haha….

      She’s still at it today too with her $$$ lessons ;)

  37. PikiDad June 11, 2019 at 7:05 PM

    When you calculate your retirement number and it comes up to millions, it looks like an insurmountable goal. Heck even when breaking down the monthly savings required to get there may seem impossible.

    Humans aren’t naturally designed to think long term so just using the extra money to make some progress is a great idea.

    It’s a bit similar to Dave Ramsey’s snowball in that progress is more important than what math would say is the most efficient path. Knowing the emotional impact is definitely important and this method latches on to that well.

    Nice one J$!

    1. J. Money June 12, 2019 at 3:19 PM

      Yup, you know it!!! Much easier to grasp smaller numbers for sure :)

  38. Vol-E June 15, 2019 at 10:09 PM

    Wow, just read this and a big ol’ compact fluorescent light bulb came on over my head.
    I get paid weekly (not nearly enough…). Depending on which bills are due and payable that week, I usually have nothing left by the next paycheck, and often have to transfer funds from my savings account. But occasionally, there’s a small amount left. Each payday, my bank automatically transfers $25 to my savings account. With your plan, I will now be calculating 50% of whatever amount is “left” from the last paycheck, and putting it back into my savings, along with the $25. Previously, I was just spending it on something I didn’t need.
    This payday, the amount I had left over was $13.14, so I just put $6.57 into the savings account. Such a small amount, but you’re right, it feels really good. Maybe it is a gateway drug. Thanks, J!

    1. J. Money June 17, 2019 at 6:33 AM

      Heyyyy glad to hear that!!! Well done!!!

      And I’m impressed you know exactly how much you have left every month too, right down to the penny! That in itself will prove fruitful over the years as well!

  39. Alex June 18, 2019 at 11:48 PM

    Great tips and quite easy to remember too. If I could I definitely would save 50% or more. But in most months, it’s just not possible. I think the key for me is to find side hustles to increase my income so I could save more. Thanks man for the awesome tip.

    1. J. Money June 19, 2019 at 5:28 AM

      Side hustles def. help speed things up :)