We’re nearing the first of the year for 2009 and invariably the subject of New Year’s Resolutions comes up. The top resolutions usually are to lose weight, exercise more, make extra money, or save money. One that is rarely on the list is to make money BY saving money.
Too many times we save a few bucks on something like with coupons or “buy one get one free” offers at retailers. What happens to the saved cash? Nothing. It stays in our checking account until we spend it mindlessly on something else. To make extra money BY saving money, you need to take those savings and put them in a special savings account. Otherwise, they’re wasted on a latte or a new pair of shoes when we see that there’s a little cash left over at the end of the month. “Hmm,” we think to ourselves, “I wonder why I have that left over? Oh well, I guess I really can afford those new shoes!”
A few months back I wrote a post on 17 Sneaky Savings Strategies and outlined some specific ways to trick yourself into saving money, but I wanted to put these ideas into some generalized categories so that maybe, just maybe, they will inspire YOU to come up with some ideas on how to save a few bucks here and there!
Making it into a game can helps to make it fun so here goes. Just make sure you put these savings into a separate savings account!
1. Bank half of any increase in income game.
Get into the habit of halving any raise you get and saving that cash. If you’re a real savings animal, save half of the PRE-tax amount rather than the after tax amount. What fits in this category? Raises, found money, returned deposits on utilities, gifts and money from yard sales or Ebay. What other types of income increases could apply?
2. My payments NEVER go away game.
Force yourself to continue making car payments, credit card payments, revolving debt payments, installment debt payments, student loan payments, or mortgage payments even AFTER the debt is paid off. Hey! You were living just fine with the payment before … just keep paying those amounts into that savings account and watch your net worth go up up up. What other payments could you keep making?
3. The price of admission game.
I outlined quite a few of these ideas in 17 Sneaky Savings Strategies so check out that post for a lot of good ideas. The way it works is that you pay yourself a dollar to wash a load of laundry, two dollars to watch television, and seven bucks to watch a DVD at home (then pay the late fee to yourself). In essence, you’re leasing the use of your assets back to yourself and paying yourself a fee for using them. Feel free to send yourself a late notice followed by a demand letter. What are some other things YOU own where you could charge yourself a usage fee?
4. The daily piggy bank game.
You’re probably doing this one already but are you putting the money into that savings account I keep mentioning? Now, saving your change on a daily basis is great, IF you’re actually saving that cash. Empty the jar once per week and deposit the savings. No stealing from yourself to pay to use the television either! What tips do you have to help yourself save those coins?
5. The act like a short-sighted American businessman game.
American businessmen are renown for looking only at last year’s numbers and comparing today’s performance to prior year’s results, regardless of trends. Are you a pack-rat that saves your old utility bill stubs? Good, but if you’re not, ask you local utility company if they can provide last year’s data by month, on what you spent on utility payments. Include your electricity, water, natural or propane gas, and telephone bills. Now, see if you can reduce the amount you spent compared to the same month last year. If you’ve had a rate increase, be sure and compare the units used rather than just dollars. Involve the kids and really make it a game. No more nagging them to turn off the lights or turn off the water!
6. The ME first game.
Pay yourself first is a mantra that is often repeated in the personal finance world, but it is true! Always pay yourself first and others, including your bills, second. Don’t fall into the trap that you HAVE to pay anyone else first. Even when I was personally going through credit counseling, one of the first things my counselor said was to pay yourself first and start saving a little money. Pay your living expenses second, and your other bills third.
7. SOS or Save Our Singles game!
This could be considered a derivative of the daily piggy bank, but with a twist. Save all your one dollar bills at the end of the day. Maybe you could save every five dollar bill you come across instead. No matter, whichever method you choose, you gotta stick to it and put that cash into that savings account.
So here’s the big question: What savings strategy can you add to this list?
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One fun thing we did for a while was to transfer the change, like the 40 cents in $100.40, from our checking account balance to our savings account every day. We’re big debit card users so we don’t go through as much actual cash as some people.
Don’t be afraid to pay yourself from small things too. There’s nothing better than getting a small bonus $100, paying yourself a $10 meal somewhere, and recognizing that you could be paying yourself a $100 monitor (or whatever) if you had gotten a $1000 bonus.
#3 – The price of admission game. For people that play video games or spend their leisure time on the computer, pay for that priveledge. Take it old school and pay a quarter at a time (per life or 15 min). My friend makes her kids earn video game time with gym time.
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