Sep 13, 2017 / Money Tips
Nobody likes to talk about saving money, but secretly everyone is trying to do it. It’s the paradox of penny pinching. Sure, it takes a little discipline and some basic planning, but saving money is easier than you might think. So, whether you’re saving for a rainy day, or simply banking on better weather, here are 3 money saving tips that might surprise you.
It might sound basic, but opening a savings account and dedicating a set amount of dollars each month to said savings, is a great way to save money. The simple act of separating your savings from your everyday checking account lets you know that a certain portion of your income is off limits – at least until you’ve achieved your set savings goals. And, as the name implies, use your savings account to actually save money.
After you’ve paid your bills and purchased your groceries, put a percentage of your monthly income into your savings account and don’t touch it, not even if you’re really tempted. Of course, it’s a good idea to talk to the friendly folks at your financial institution about which account (and interest rate) makes the most sense for your specific needs, but the concept remains relevant – separate your spending from your savings and watch as your money starts to pile up.
In the days when cash purchases were more prevalent, the best way to become a penny poorer was to purchase something for 99 cents. That single cent traveled from your pocket to the couch cushions, never to be seen again, faster than you can say, “A penny saved is a penny earned.” With the advent of plastic purchases, these types of wasteful transactions are thankfully less common. (Your couch cushions might be worse off, but at least your bank account is reaping the rewards.)
In today’s mobile money managing age, you can take your savings savvy one step further by downloading an automatic change investment app. These apps round each of your plastic purchases to the nearest dollar and invest the change into your savings or other investment account. So, the next time you spend $1.50 on a king sized candy bar, your savings/investment account gets 50 cents richer. In other words, you save money while making everyday purchase. And, now you’ve got a king-sized candy bar, so win-win for you. Of course, do a little research to find the right app, and watch as the change once lost to the abyss fills your savings account.
Go through your monthly expenditures and you’ll be surprised by the amount of money you spend on instant gratification. You stop by the store to pick up a loaf of bread and a gallon of milk, and you end up spending $50 on snacks and other superfluous items. Even worse are the trips to big box and wholesale stores, where you can’t escape without spending at least $100. Instead of spending money on expensive impulse purchases, consider instituting the 30-day rule. When something strikes your fancy, wait at least 30 days to think about it, instead of reacting on impulse. If, at the end of 30 days, you’re still feeling a need for a certain item (and you have the money) then make the purchase. In the meantime, you’ve weeded out several other unnecessary purchases, leaving only those that really matter. And, because you’ve waited 30 days, your bank account is better off for your delayed gratification. Just remember, the 30-day rule doesn’t work for necessities (please don’t wait 30 days to buy food for your family), but it’s a great trick for those expensive impulse buys.
Saving is all about mind over money. With a few simple tricks – including separating your spending and savings accounts, saving your change, and implementing the 30-day rule – you can stop wasteful spending and start down the road to increased financial security.