Did you know that saving money is more of a psychological thing than a behavioral or a lifestyle change? And if you happen to be an impulse buyer, it needs some serious efforts to trick yourself into saving money.
The task of saving money can sometimes get demoralizing. It often happens that I take up a money saving challenge but end up being discouraged because I couldn’t save a penny by the end of the month. It’s either I lose my heart to a dress or a pair of heels at the shopping mall or I end up paying for things that I could do without – a random outing or a trip, a fancy dinner or those pricey personal care products. I promise I don’t always splurge on things that are not needed but when I do, I end up regretting it. It’s exactly when I wish there were some tips that could help me trick myself into saving money.
I know I’m not the only one who loves saving money. After all, it’s the one thing that can protect you from all the financial emergencies and it’s what you need to live a happy life post retirement. And if you see it my way, savings means that I can do a little bit of travelling too.
The importance of savings can’t be stressed upon enough. It’s not just a good money habit, but also healthy for your finances to always have some money saved. If you find the task of frugal living way too daunting, here are some ways to trick yourself into saving money and finally build yourself a financial cushion:
1. Save Money On Autopilot – The most effective way to save money is to automate your savings. To “pay yourself first” is known to be the first rule of improving your finances, which means savings should be your very first expense as soon as you receive your paycheck. According to the 50/30/20 rule of budgeting, 20% of your monthly income should go into the savings account that can help you secure your future.
To trick yourself into saving money, start treating savings as the very first expense you need to incur after getting your salary and set up an automatic transfer of money every month to your savings account. If your budget doesn’t allow you to save 20% every month, you can start with a small amount and increase it gradually as you move ahead.
2. Don’t Leave The Change – Have you ever noticed how prices for various items in the stores are set at $4.99, $5.99 or $10.99? Now think about the number of times you didn’t bother to take the change thinking that it was just ‘a cent’. And imagine how much money you could have saved till date by taking the change no matter how small it was.
If you think that saving cents won’t make that much of a difference to your savings, you can try another trick. Pick a jar and set it up in a corner of your home and keeping putting the change in it. Try doing this for a few months until you start noticing how much money you had been letting go in change.
3. Adopt a Cash-Only Lifestyle – Credit and Debit Cards have made it easier to buy anything in a swipe of a card. But what often goes ignored is the amount of money that goes out in fees and interest. To trick yourself into saving money, ditch that credit card and get into the habit of using cash as often as possible. While it might look cumbersome to carry cash all the time, it can help you keep a check on your spending habits given that it’s not easy to part with your cash.
4. Save The Raise And Bonuses – Make it a habit to save every penny that comes in as a bonus, tax refund or a raise. While a sudden inflow of money can push you to spend it on those pricey items you have been eyeing for a long time, it’s only wiser to save this extra money to improve your financial health. It might look like a big sacrifice today, but you’ll be happy to see the results a year later.
5. Take A No-Spending Challenge – Money Saving Challenge is a fun way to improve your finances by treating money saving as a game. You can start with a 30-day Money Saving Challenge to see how it helps build your savings by making a few good changes to your lifestyle. I still take money saving challenges every now and then and there are a few things I do to make it more effective:
- All the coins and $5 bills that land into my wallet goes into the savings account.
- I tell it to my family that I’m on a money saving challenge to hold myself accountable to them.
- I don’t eat out for the 30 days that I’m taking the challenge and opt for in-home entertainment instead of going out. Though there are always exceptions to this rule.
6. Divert Your Savings – When I moved out of Enugu and shifted back to home back in 2017, I was saving a good $150 in rent every month. I was confused about how I could put this money to use before my Mom suggested me to invest it in stocks and mutual funds.
Diverting your savings is the most lucrative way to prevent yourself from wasting the money. So after you pay off your debt or cancel away that gym subscription, make it a point to divert those monthly payments into your savings account.
Money can be saved gradually with small steps and a bit of motivation. Although it’s hard, but it’s exactly what can get you out of debt and help you take control of your finances. And just in case you think that you can’t save, you will surprise yourself once you start adopting the above tricks in your everyday life.