Hey friends! We’re honored to feature this article from money-saving expert Andrea Woroch. Andrea is sharing with us today some ways in which we can trick ourselves into saving money. Thanks, Andrea, for these great tips!
Saving money isn’t easy, and it’s clear Americans are having trouble doing just that. A recent report revealed 28% of consumers feel less comfortable with their savings compared to last year, and 24% have more credit card debt than cash stashed for emergencies. With the average U.S. household credit card debt at approximately $15,600, it’s time to take action.
If you’re having trouble breaking a poor spending habit or can’t stick to a savings plan, trick yourself into stashing more dough with these 7 clever strategies.
Ways to Trick Yourself into Saving Money
Cash out to tame temptation.
Shopping with cash will help you reign in impulse purchases and unnecessary spending. Carrying larger bills will make the fight against temptation easier. That’s because consumers perceive $50s and $100s as more precious, while smaller bills seem replaceable and easier to come by. It’s called the denomination effect and can help you control your spending when you carry only large, crisp bills.
Stow away “near misses.”
Whenever you stop yourself from an impulse purchase — whether it’s a fancy latte, new blouse or shiny gadget — put the money you would have spent into savings. Not only will this show you how much unplanned purchases can cost, it also helps you do something constructive with money you might have otherwise spent on unnecessary goods or services.
Create shopping rules.
If you’re an all-or-nothing type of person, set spending boundaries to keep your budget in check and establish new saving habits. Commit to shopping rules like; never paying full retail price, always looking for a coupon, using a hand basket at the grocery store to limit impulse buys andmulling over potential purchases for 24 hours. Overtime, following such rules won’t feel like work and they will become part of your regular shopping routine. Stick to your shopping guidelines easily using digital tools like CouponSherpa.com for quick access to online, mobile and printable coupons, the RedLaser app for instant in-store price comparison, or TrackIf.com for price drop notifications.
Do something with those savings.
Whether you recently reduced your cable bill or are using a coupon to save on a new pair of shoes, the money saved isn’t going to do you much good unless you do something with it. Transfer the $20 you saved on groceries directly into a savings account or investment fund as soon as you return from shopping. This is the fastest way to make those savings work for you and even grow your dough!
Pay yourself first.
Once you live paycheck-to-paycheck, it becomes a habit that’s hard to break and you can’t imagine the possibility of living on less. If you make saving a priority and pay yourself FIRST before all the bills, you’ll learn how to stretch your dollars and live on what you have left. To accomplish this, set up automatic transfers from your checking to a savings account or use Digit. This online tool automates your savings for you by analyzing your income and spending patterns.
Plug budget leaks.
Do you watch the hundreds of channels that come with your pricey cable subscription or use all the data and minutes associated with your mobile plan? Probably not and there are reports that prove it! Beyond TV and phone bills, are you paying unnecessary bank fees or still enrolled at a gym you haven’t been to in months? Take the time to calculate what you actually use and lower your monthly bills so you stop wasting money on unused expenses. You can save up to $4,000 every year by plugging up these budget leaks and finding less expensive alternatives, as I explained in a recent segment with San Diego Living.
Set a maximum bank balance.
If you set a maximum balance in your bank account to cover bills and discretionary spending while transferring the rest to a separate savings account, you’ll work harder to make ends meet on what you have available. Seeing a smaller balance in your bank will keep you from blowing money on unnecessary splurges. Out of sight, out of mind, right?
What are your favorite ways to trick yourself into saving money? Do you have any budget leaks you need to plug up?