The “Horizontal Saving Rule” That Allowed Me To Finally Get Good With Money


My former relationship with savings goes a little something like this: “I have $2,000 in savings. That means I have $2,000 to spend on this expense that feels pressing, even though it’s…maybe a spring break trip. Oh, wait. Now I have no savings. And I forgot about copays and my Amazon Prime renewal and being in a wedding this summer and…oh! Hello there, credit card.”

For some people, figuring out an amount that covers all of their expenses — emergency fund deposits, annual account fees, travel costs, et cetera — feels like the easiest way to save. They calculate one big number and save up for it. When they take money out for an expense, they begin saving back up to that magical number. I call this vertical saving.

I hear that this vertical philosophy of money can be…soothing? “Just keep X amount in your account, and you’ll be fine.” Seems simple! Good job, vertical savers. You have willpower and foresight and hindsight and many other qualities of functionally-adult humans. But, if I see one big number, I get savings amnesia: I forget all the little things that my big number is for. I start using the savings I put towards that number for…see previous example.

So, over the last few years (it’s been a process), I’ve taken a hard look at the kind of financial human I am. The three most important things I’ve learned about my financial self are:

  1. I prefer achieving small but frequent goals.
  2. Making constant, if modest, progress is gratifying to me.
  3. I like treats, but my definition of a treat is flexible (perhaps this is related to my preference for achieving small but frequent goals).

As a result of this self-knowledge, I’ve started saving horizontally. My “horizontal savings philosophy” is a snappy way of saying that I divide my savings into categories using an Excel spreadsheet. The categorization forces me to build up savings for each item or expense individually; this, in turn, forces me to think about all my expenses far in advance. I’m no longer blindsided by that Amazon Prime renewal (it’s annual, girl. As in: happens once a year. Why so surprising, Cat?). Plus, I no longer feel betrayed and financially panicked every summer (every summer, Cat) when my AC unit spikes the electricity bill.

My father, who is my personal finance mentor, has been doing something similar for years. His system is infinitely more nuanced; when I first learned about his horizontal savings technique, it felt daunting. But then I realized that A) I do not own a house, B) I do not have children or a spouse, and C) my retirement is not imminent. Thanks to my freedom from these three financial considerations, I could recreate my father’s system in a pared-down way that would be simple to maintain. Added benefit: now that I have my horizontal savings system set up, I can slowly add more categories and plan more intricate savings goals as my life (and financial considerations) become more complex.

Here’s how it works. Every month, I open my spreadsheet and note how much I’ve added to my savings account, and — because Excel formulas are daunting but amazing creatures — the formulas automatically distribute my monthly savings deposit sum across the categories I’ve created. For example: if I saved, say, $100 in June, 40% of that money went into my emergency fund, 25% went to my travel fund (because weddings), 5% went to annual renewal fees, et cetera. Time for a picture? Time for a picture:


Because I love achieving small but frequent goals and making constant progress, seeing each of my savings categories build month after month feels immensely satisfying. If I take money out for a wedding in July, I manually subtract the amount from the July cell in the “Travel/Weddings” column. The amount in the “Travel/Weddings” category goes down without affecting the other categories! This provides soothing visual evidence that I can indeed spend money celebrating my friends’ loves and lives without depleting my emergency fund or sacrificing one of my quarterly haircuts (file haircuts under: flexible definition of what constitutes a treat).

If one of my savings columns goes into negative numbers over the course of the year, that’s my signal that I need to bump up the amount I save for that category (and then plan accordingly and actually save that money). Over time, I’ve tweaked the percentages (aka: 40% to emergency fund would change to 45%) and added new categories (my current sheet has about 10 categories; some of those columns take up as little as 2% of my monthly savings sum). This process — through patience and incremental improvements — has taught me loads about my personal spending habits.

There are apps and programs that will categorize for you, too, I’m sure. I hear great things about Mint. But the degree of control and privacy my Excel sheet affords me has been uniquely useful. I’m by no means fluent in Excel, and, full disclosure: my friend who is a CPA helped me with the formulas for this chart (thanks, Jackie!). But once she got me started, adding categories and changing percentages became completely straightforward. The only thing I had to keep an eye on was making sure my allocated percentages (25% here, 2% there) added up to 100%. Math!

This system has helped me find a balance of control and automation over my savings habits. If I’m feeling overwhelmed in September, all I have to do is plug in one number to watch every category tick up. If, in October, I feel ambitious about saving for a new goal, I can get all up in that sheet and divide an existing category into two more specific ones. Getting to this point — where I’m actively monitoring my goals and making friends with Excel — has been a two-steps-forward, one-step-back kind of process, but I finally feel like I know what my money is doing and why. Both Logistical Me and Lazy Me love it. We’re finally getting along.

Cat Richardson is a New York City-based copywriter and an editor at Bodega Magazine and Phantom Books. You can find her at

Image via Unsplash

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  • Andrea Sease

    love this article! one word of advice. the key to successful retirement is not waiting ’til it is eminent. time has a greater effect than amount, I would start stashing some cash now. you’ll feel much better later. try for $100 a month. put it in an IRA

    • Jackie @leafleggirl

      In order to open most IRA’s you need to start with $1,000

      • Emily Guillen

        Yes, but you can store the money in a regular savings account until you have enough to open the IRA. Then you can contribute however much you’re able!

      • Andrea Sease

        there is no minimum amount to open an account with Fidelity, and they have tons of no transaction/ low fee funds, which mimic the vanguard funds

      • Different companies (and different funds WITHIN companies) have different minimums, but most places now have some sort of program where they will waive the minimum for an IRA if you commit to a monthly deposit amount, sometimes as low as $50/month.

      • Lauren

        Betterment allows a minimum of $100 deposits a month. That’s what my husband and I went with when we couldn’t find a good option that was less than $1000 and we love it.

    • Cat

      Hi Andrea! I agree that saving for retirement sooner rather than later is essential. I contribute to a 403(b) through my job, so this savings plan is just for my take-home money. But for anyone without a job-related retirement account, adding a category for that to this chart is an excellent idea.

  • GBee

    I’ve never heard of horizontal saving, but this is the same way I set up my savings accounts. Seeing one lump sum just doesn’t work for me. $XX,XXX may seem like tons of money, but when you break it down you realize that after retirement, vacation, emergency fund, car insurance, rent, (and tons of other bills) it isn’t nearly as much money as it seems.

  • Liz LaBrocca

    This is awesome! Can you share the formulas? 🙂

    • Cat

      Sure thing! I’ll use the Emergency Fund column as an example. Put the percentage you want for your category (in this case, 40%) into the cell at the top of your column (C3). In the cell below (C4), use this formula: =$B4*$C$3 then click the bottom right corner of cell C3 and drag down to cell C15 so that the formula auto-fills into the other cells in your column (cell C5 will now read =$B5*$C$3 and cell C6 will read =$B6*$C$3 etc.). You don’t need any formulas for the “Money In” column—you just write in however much money you put into your savings that month. Then, in cell C16, use this formula: =SUM(C4:C15) which will add up the entire column. Hope this is useful!

      • Liz LaBrocca

        Thanks so much!!

      • ES

        This is great! One more question – if you need to tweak the percentages after a certain amount of time – say you want to give 80% to emergency fund and then 20% to travel but after 6 months want to change it to 20% e-fund & 80% travel but keep what you have built up so far – what would you suggest is the best way to do that?

        • Cat

          Hi ES! This is definitely do-able. Using the emergency fund row as an example, let’s say that beginning in July, you wanted to start contributing 80% of your saving to your emergency fund. Here’s what you do:
          1) Insert a new row above the July row. This new row now becomes row 10, and July becomes row 11.
          2) In row 10, clear all the formulas and write in the new percentages you want to use (80% for the emergency fund, etc.)
          3) In the July cell of the emergency fund column (now cell C11) add a modified formula that refers to the cell with the new percentage: =$B11*$C$10
          4) Click the bottom right corner of C11 and drag down to C16 to affect the other months.
          5) Now cell C17, which totals all the months will be inaccurate. To fix it, use the following formula: =SUM(C4:C9, C11:C16)
          It’s very possible that there’s a more elegant way to do this! But this is the only way I know of. I hope this helps.

      • Rebecca Ann

        Thanks so much for this information! I have always hated only seeing the lump sum total, but knowing that there are different “buckets” that money needs to fill, and I didn’t want to open a ton of different savings accounts. This is exactly what I needed, but couldn’t figure out on my own. I set mine up in about ten minutes and now I can’t wait to start making entries!

  • Anon

    I do something like this but am prone to just opening different savings accounts. Makes it easier to keep from dipping in, at least for me. I also don’t analyze things on such a fine level.

    • Yup! I do this too – I use Capital One 360, which lets me open dozens of new savings accounts in seconds (I once timed it at 42 seconds to open a new account and give it a “nickname” for what it was for). So I have an account called “Weddings” that is specifically for attending other people’s weddings (and wedding gifts), a “Travel” account, a “Gifts” account, and an “Occasionals” account (yearly/semi-yearly expenses like car insurance, renters insurance, etc. – Amazon Prime would be in here if I paid for that, but I use my mom’s Family account honestly).

      But similar to the post author, I use an Excel spreadsheet to siphon off a percentage of every dollar that comes in (I’m a freelancer, so my income payments are erratic). But I know that say, 1.2% of whatever I make will go in that Gift account, etc., based on my spreadsheet. A great way to do it!

    • Brenna

      I do the same thing – different savings accounts for different goals. I follow each with Mint, which has really helped keep me on track. Instead of seeing just a number, I can see a progress bar showing how far along I am in reaching that goal (ie. vacation fund, down payment on a home, emergency fund).

  • D. Broussard

    Hi Cat! I really enjoyed this article. I’ve been really working on improving my saving and spending habits, and what I like about your system is that it doesn’t limit how you spend your money. Rather, it helps you keep track of it because you can visually see where all the little chunks of money are going. I have had mint for ages and I do appreciate it as far as bills etc. the problem is that o frequently have to reset accounts within the program/app if I, say, get a card with a new number or change the password to an online account. I’m currently trying level money as well which I believe I like better. That being said I can’t wait to try your system for the next few months.

  • Metropolis Fellow

    I put as much as possible into my 401 K each month.

  • Heather

    I also have different savings account for various categories, but I LOVE your spreadsheet and I am totally stealing that idea and adding it as a tab on my financial google doc (love spreadsheets!)

  • Thanks for sharing, Cat! This seems like the most manageable and approachable system I’ve seen (for my needs/insecurities anyway!) and I’m going to see if I can make this work. The gif was also an excellent helper!

  • I’ve never heard of budgeting/saving money in this exact way, it’s really an awesome idea and clearly works very well for you! Thanks for sharing your methods.

  • chelster759

    This is pretty much what I do with YNAB, and I agree it’s been a game changer. Adding money to categories in anticipation of future expenses is kind of like having a bunch of different savings sub-accounts. I kind of like how nicely automated your version is though.

  • smoreno

    Hi! Thanks for sharing. Maybe i’m missing something. But, where is the file to download?