How to Trick Yourself Into Saving Money
By: Bean Jones
Hidden Wealth. Putting away a year's worth of loose change may add up to unexpectedly-huge savings.
A week ago, I started reading Marisha Pessl's novel, Special Topics in Calamity Physics, which I had borrowed from my workmate, Meg. I was really getting into the novel when a crisp $10 bill floated out from between the book's pages.
Out-of-the-Box Savings
Bemused, I tucked it back in the first page and finished reading the novel. Later when I returned the book, I told Meg what I'd found.
She shrugged and admitted that she used whatever came handy as a bookmark. A photo, or her shopping list... Sometimes it would be whatever bill she had on her at the time.
Knowing that she was a proud bookworm, I became curious about just how much money we would actually find hiding in her bookshelf. I was amazed to learn that her "book deposits" added up to about $800 last year.
"It's not hard to save up when you think you're not doing it," Meg told me. "Some of my friends think I'm nuts to stash bills into my books. But, hey, I had an extra $800 last year. That's not bad at all."
Hidden Rewards
Meg's financial philosophy--if you can call it that--is echoed by Walter Updegrave, author of How to Retire Rich in a Totally Changed World: Why You're Not in Kansas Anymore. As such, he lists the ways through which we can "fool" ourselves into saving money:
1. Hide the Money. Money you don't see is likely money you won't spend. Updegrave suggests signing up for an automatic investment plan. This service is actually offered by most mutual fund companies. Once set-up, money will be automatically transferred from your checking account to your chosen mutual fund.2. Stash unexpected windfalls. Instead of spending your refunds or rebates, deposit them into your savings account as soon as you receive them. You might be surprised how much you will end up saving this way.
3. Keep paying off a debt--even after you've completed payments. Once you're done paying off your debts, keep writing checks you can deposit to your investment or savings account. Since you're so accustomed to paying this amount off anyway, this "extra" money can go a long way towards helping you achieve your financial goals.
Small Start, Big Rewards
Updegrave's (and Meg's) advice gives me some hope. You see, I'm not too strong in the savings department. I really need to figure out what kind of saving strategy will work for me. Fooling myself into saving my cash may be the answer to my dilemma.
For starters, I'm now off to empty out my coin jar. Since I don't spend the spare change, I'm hoping that there's at least a $20 in there. Hopefully, this would be start of a habit that would give me the best reward of all: financial management smarts. Because I sure need it. (Or maybe I really just ought to re-read Simpleology 102's the First Law of Money: The Law of Input and Output.)
Credits: Photo by Petr Kratochvil, courtesy of Public Domain Pictures.
Comments
Thanks for the great article as usual.
Among the things we do to save in our house is one we NEVER spend change except for pennies. Then about 3/4 times a year we roll the coin while sitting and watching TV when it goes to the bank it goes right into the money market account. We also have a "found money" box. All money that comes in extra for any reason goes into the money market account too!
One of our favorite ways to save is to give both my husband and myself an allowance every two weeks. Things that we want that are not necessities come out of that money. It is amazing how that makes you think before you waste money. We have made a game out of saving. Each "payday" we compare how much money we have left. Please note we have made it fun to save. We still go out to eat on ocassion, we still have lots of toys and fun however, we just don't spend without thinking any longer.
Last but not least we have decided not to purchase on credit any longer. We are doing something that was very strange in the begining. We now wait until we have the money to purchase big items. WOW!!! It is amazing how much further your money goes when you pay cash. No more interest payments. Instead we pay ourselves the payments we would be paying someone else. The money grows quickly and we can then get something else we want with no pressure of how we are goint to pay for it and none of the $1000's being wasted o interest.
I truly appreciate such great article.
That is the best way to put aside small savings, especially at times when you require that small savings. I use to keep 'clean' new notes into an unused purse. At the end of the year I have around RM300-RM500. I think that is great!
Back when cash was used rather than debit cards, I would never spend $5 (USD)bills. This worked GREAT. Tried experimenting with 1's, and 10's as I recall, however 5 dollar bills were the "ticket" for this little savings gimmick. Remember when we used cash primarily in day to day transactions??
Thanks Mark for all your valuable and enjoyable work!
I quit smoking August of 1989 and made myself put the amount of money I would normally spend on cigarettes each week in a non-seethrough container. When the one year anniversary date came up I opened the container and was shocked that I had over $400 in it!! It was such a pleasant surprise I decided to continue that ritual and use the money for Christmas every year. I know the cost of cigarettes have gone up through the years, but I have stayed at the same amount I started with.
Back in the day, about two/three-plus years ago & earlier, I used to buy everything with a mail in rebate. I knew that it initially cost me up front on my credit card, but I always made sure that I could pay off the balance every month.
I would then turn the product(s) [usually PC software] around and sell them on eBay. I would offer them ay 50% retail. Then with that money and teh money I got back in the form of rebates, the product would usually then be free (no cost, ssave for postage).
Since the credit card had already been paid off, I would take my eBay & rebate money and deposit it into a seperate checking account designed (by me) just to make monthly contributions into various Dividend Re-Investment Plans (DRiPs).
Worked out great! But now, most retailers offer very few rebates. They would rather offer a price break at the point of sale.
I'm not too happy about that.
In order to save, you need to not think about it & make it automatic & easy.
Best.
A variation of the "hide the money", as much as possible I keep only with me the amount that I would be needing for the week