Five Ideas to Trick Yourself to Save Instead of Spend
Brought to you by: Breez DeGuzman
Are you one of those people watching money come and go through your hands?
You know saving is important but you haven’t been able to get into the saving groove yet. Here are five ideas to trick yourself to save instead of spending what you get.
Financial experts recommend having a minimum of three to six months income saved for unplanned emergencies or possible layoffs. Saving that much money isn’t going to happen overnight, and if you’re used to spending what you get, it may be difficult. You can overcome your spending habits and start saving by following a few simple steps.
1. Continue to make “payments” after an item has been paid off. This may not make sense, but if you’re not used to having that money available to you, you won’t miss it. Instead of paying for an item that now belongs to you, have that money withdrawn from your paycheck and direct deposited into a savings account, money market account, or adjust your 401K withholdings.
2. Use cash as much as possible. Some financial experts call this the “envelope system.” Cash your paycheck. Put some money into savings and some into checking to pay for bills online. Split the remaining cash into envelopes for each category – groceries, clothing, entertainment, or gasoline/transportation. You’ll be able to see how quickly you’re spending it, and when it’s gone, it’s gone.
3. Give up a luxury such as gourmet coffee or eating out for lunch. Spending $4 a day for coffee means you’re spending an extra $20 a week, around $100 a month. What could you do with an extra $100 each month? You could start that emergency fund experts recommend. You could also begin putting money aside for a house, new car, or family vacation.
4. Avoid paying late fees by paying bills automatically. Many banks offer a bill paying service which allows payments to be taken directly from your account on a specific date each month. Even if the bank charges a monthly fee for this service, it will undoubtedly be less than paying late fees for more than one creditor.
5. Put annual raises, year-end bonuses, or income tax refunds directly into savings rather than trying to decide how to spend them. If you keep the same standard of living rather than increase how much you spend to match your new income or bonus, you’ll be able to set aside a good amount of money without missing it or feeling neglected.
These five ideas to trick yourself to save instead of spending are by means the only ones. In fact, if you think about it, you could probably come up with any number of other ideas to help your family save money. Saving money isn’t difficult to do, but spending money can be a hard habit to break. Why not try putting some of these ideas to use and watch your savings grow?
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Tags: Save Instead of Spend, Saving, Spending
