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Get Serious: How to Save Money, Big and Small

Piggy Bank! For some of us, saving is just not second nature. Unlike some of my friends online, I am not a natural saver - I prefer to spend. And while I am working on that (ahem) and learning to curtail my eager shopping habits, I’ve come up with a couple of ways to hack myself into saving.

If you have trouble saving money, or keeping money saved, here are some ideas for you! They work for me

Big Chunks of Cash

How much can you save? This is all relative to your earning power and how little you spend, and of course depends on whether you have debt to pay off or not. But assuming you have no debts running up interest at a heart-stopping rate, how much can you really save?

Even if you don’t have a lot to sock away each paycheck, surely you can save something. Even $20 a month will add up over time. To get the biggest lump sums of money into your bank account, I recommend setting up plan for yourself - officially - for how much you want to save.

1. Pay yourself automatically, and first. Set yourself up a calendar online, or on your computer, phone, iPod Touch… whatever. Set up an alert every month that reminds you to save. Treat this alert as a bill, and pay it accordingly. If you save regularly, just as you pay bills, you’ll get a nice flow of deposits to your savings account building up in no time.

2. Take any “windfall” money and put it into savings. This means your tax rebate, your “economic stimulus” check, birthday and holiday money, work bonuses. Any large amount of money that you receive is above and beyond what you would normally expect to earn, and therefore shouldn’t even touch your checking account. Chuck it into savings and you’ll have that much more!

Little Bits Here and There

With my family and friends, I am now notorious for my snowflaking abilities. Little bits of money here and there really DO add up! Even if it seems like nothing now, later you’ll see the totals in your savings rise. Here are the things that I do to save all my pennies and dimes:

1. Enroll in an automatic savings plan with your bank. I use the Keep the Change program with Bank of America. For every purchase I make, the difference between the purchase amount and the next whole dollar is transferred to my savings account from my checking account.

That means that, for example, if I buy a pack of gum for $1.30, Bank of America takes $2 out of my checking account - they pay $1.30 to the merchant where I bought the gum, and the other $0.70 to my savings account. I use my Visa Check Card exclusively (I just never have cash) and so for me, this means an automatic savings of around $15/month. Pretty good “accidental” savings!

2. Tip yourself. If you carry cash all the time, set up a tip jar for yourself When you do something that gives you warm fuzzies, skip the pat on the back and tip yourself instead. I had a dream about this the other day (yes, I am crazy). Every time that you do something that’s been on your to-do list for ages, write a flawless email, get a raise, contact a friend you’ve not spoken to in a while, find a way to please your children… whatever! This may seem a little strange, but shouldn’t you be paid for all your awesomeness?

3. Save the difference you save. This is a popular debt-snowflaking concept, but it works just as well for saving snowflakes. If you find a way to save money on something - groceries, gas, movie tickets, wine… anything - put the difference into savings. If you don’t want to transfer little bits of money every day online, keep a little notebook at home where you can put in your receipts. Many stores conveniently put the “total saved today” at the bottom of their receipts, which make this very easy to do. If you keep a notebook, you can transfer total savings once a month, or once a week - whatever works
4. Solicit money from people when appropriate. Yes, I am serious. I honestly never know what to tell people to get me for my birthdays. Ever. If you’re the same way, tell them that you’d just prefer cash for your savings goals. Some people hate giving cash, so you’ll always get a few gifts, but others are relieved when they find they don’t have to shop for you! If they’re wary of how much you want, just cut your average gift price in half. If people normally would spend about $20 on you, ask for $10. All those extra moneys go straight to your savings account, pronto.

5. Get silly about it. If you have a talent, practice on the street with a tip hat at your feet. If you have an unused skill, offer to let other people use that talent for a nominal fee - this works especially well if you’re good at ironing or sewing, things that people need done but aren’t willing to pay more than $5-$10 for. And who says you can’t be 35 and have a dog-walking business on the side? Or a lemonade stand? (OK, maybe the stand would be a little creepy… but you could mow lawns!)

Keeping Your Paws Away

Once the money is piling up in your savings account, it can be tempting to spend it. But you must resist! The best way to avoid spending the money is to store it a step away from you. Put your money into a high-yield savings account with somewhere like ING or ETrade. Your money will start earning your interest and you’ll have to take just that one extra step to get the money out for use, which means you’ll be a lot less likely to spend it in a lapse of sanity and self-control. Goodness knows I’ve done that before! Avoid spending your hard-earned savings by putting your money in a remote bank.

If you keep your money a little out of reach, you won’t be able to grab for it at any old time - allowing it to grow peacefully just a little beyond your absolutely-convenient grasp.

Got questions? Leave ‘em in the comments!

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The best mortgage for students is to go for an education insurance. The deal is more economical than a car insurance or a travel insurance and is used rightfully too.

Filed Under Frugal Living, Random Tips, Tricks, and Advice, Snowflaking Debt and Savings, money and finance

Comments

6 Responses to “Get Serious: How to Save Money, Big and Small”

Kathy@brazoscowgirl on May 6th, 2008 5:44 am

Shay,
Many great tips here! I love them all, some I have not heard of.
PT on May 6th, 2008 9:52 am

All great points. A solid piece on saving.
Moneytummy on May 6th, 2008 6:11 pm

Really good advice, so many tips, thanks!
Foxie on May 7th, 2008 7:36 pm

Shanti, since you’re so good at spending then (I mean it in a good way ;)) can I recruit you to the “make Foxie spend her money” team? I know for a FACT that I’m going to whine and cry and throw a tiny hissy fit when my savings account balance hits $1,500 and I know I’ll have to part with all my hard work to get the stuff I’ve been saving for for my car…

It’s tough to be a natural born spender, but try being an obsessive natural born saver… I’m more attached to the money itself than the stuff it buys sometimes. (Hey, keeps out the clutter at least!!)
Emily @ Taking Charge on May 8th, 2008 8:24 am

Yes — an automatic savings plan is the key!!! I am going to Europe for two weeks this summer and knew I needed to save big-time, but was worried how to go about it. A few months ago I opened up an ING Direct high-yield savings account, and set it where each week, $15 from my checking account is deposited into the savings. That way, if I end up with some extra money, I can put it in there, but when I’m not even thinking about it, I’m still contributing. It’s not enough to really affect me week-to-week, but at the end of every month, hey, that’s $60 without even trying. And I usually try to transfer at least $100 in that account the moment my paycheck is deposited at the beginning of each month. And I totally agree that it helps keeping a separate account to help keep your paws off it. My regular checking and saving are at Bank of America as well, so the ING money is less accessible, especially because the transfer takes several days. All great points!
Emily @ Taking Charge on May 8th, 2008 8:24 am

Forgot to add, I have Keep the Change with BofA as well and LOVE it. Wachovia just started a very similar program, so if you have an account with either, sign up for that program!