How to Save Money: Do This, Not That

How to Save Money: Do This, Not That

Like most families these days, I know how important it is to save for a rainy day. But with three kids, two of whom (my twins!) will be heading off to college next year, saving money isn’t easy as something always comes up. (Think braces, contact lenses, summer camp.) Yet through the years, I’ve still managed to stash a few dollars away each week. Armed with some common-sense tricks that I’ve adapted to fit my personality, I’ve learned to outsmart myself while padding my bank account in the process. Here are my top three ways of tricking myself into saving more money.

1. Save the Cash Before You See It

When payday arrives, most savers spring into action transferring money from checking to savings. But when you transfer money, you see dollars leaving your checking account. And if it’s a particularly expensive month or you’re not the most discipline of savers, you’re more apt to skip the transfer and spend the money elsewhere. Solution? Try a payroll deduction instead. When you authorize your bank to divert funds directly from your paycheck, you won’t see the dollars leaving your checking account, only money accumulating in your savings.

2. Round Up Purchases

We’ve all heard of a popular bank program that rounds up your purchases to the nearest dollar when you use their debit card and then transfers the difference – or change – into a savings account for you. It’s a painless way to save some cash. But you can easily do it yourself. When you make a purchase or pay a bill, round up the dollar amount when you log the transaction into your checkbook. So if your purchase or bill is $31.22, just write $32 in your checkbook ledger. The extra 78 cents is now your “savings.”

But why stop there? I take it a step further: I never record the change when I make a deposit to my checking account either. For instance, if I make a deposit of $245.67, I simply write $245. The 67 cents is then added to the kitty. At the end of the month, I take all the accumulated “change” from my checking and transfer it into my savings account.

3. Keep the Coins

The experts tell us it’s smart to pay in cash rather than racking up charges on our credit cards. Good advice. Yet, instead of digging into your pocket for coins to pay for your cash purchases, pay with bills then pocket the change. At the end of the day, put the change in a jar. When the jar is full, take it to the bank. Want to know how much you can save this way? Back when I was in my 20s and waiting tables, I saved the coins from my tips and within a year I had enough money to pay for an airline ticket to Italy. Mama mia!

Laugh All the Way to the Bank

By saving small, consistent amounts of money each week, you’ll hardly feel the financial pain. Like Benjamin Franklin once said, “Take care of the pennies; the dollars will take care of themselves.”

Oh, so true.

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