Trick Yourself into Saving More

Thursday, February 5, 2009 7:07 - By The David

It’s barely a month into the new year, and I’ve already accomplished one of my New Year’s resolutions: start an emergency savings fund.

Here’s how I did it.  First, I started small.  For a long time, I didn’t think I had any money to put away.  I wanted to save six months of expenses, but never set aside the first dollar.  That had to change.

I had to start somewhere, so I decided to put away $25 from each paycheck.  Then I immediately decided to do $30 instead.  Another $5 won’t hurt, right?

It’s a tip I picked up from Suze Orman’s new book.  Whenever you commit money to saving/investing/paying down debt, take your initial payment, and add another 25%.  It’s a great way to kick start your goal.

I had a good start, but $30 isn’t that much.  So I’m going to increase my savings by 10% each week.  Next paycheck, I’ll set aside $33.  The week after that, it’ll be $37. The time after that? $41.

I’m going to take advantage of compound interest to trick myself into saving more. Each paycheck, I’ll save a few dollars dollars more, so it’s a painless transition.  But the amount I’m saving increases rapidly.

After six months, I’ll be saving $104 from each check, but the amount will only increase by $9 each time.  Very manageable.

After a year, I’ll be putting away a very healthy $354 from each check.  It’ll be an extra $30 each time, so the amount is bigger, but it’s still doable.

If I stick to my plan, I’ll have $3602 in my emergency savings account at the end of the year. 

I believe this plan will work, because it is sustainable.  It starts small, and relies on gradual changes.  It’s not reasonable to make a drastic change and expect it to stick.  That’s why crash diets inevitably fail.

To further increase the chances of my success, there are three steps I’m going to take.

  1. I’m keeping my savings at a different bank than my checking account.  That way, it’s harder to spend the money, and I’m forced to wait 10 days before I can do anything with it.  The great thing is that by the time the 10 days are up, I’ve forgotten that I had the money, so I’m not tempted to spend it.
  2. I’m paying myself first.  Each time I get paid, the first thing I do is transfer money to my savings account.  That way, I don’t have a chance to use it.
  3. I’m paying myself last too.  I budget for all of my expenses, and whenever something costs less than I anticipated, I put the extra money in savings.  Same goes for the money I have in my checking account when I get paid.  I essentially zero out my account before every paycheck.

I’ve been meaning to start an emergency savings fund for a while, and the crappy economy gave me the swift kick I needed to actually do it.  By following the tricks I’ve outlined above, I’m convinced this will be a lasting habit.

Do you have any tricks you use to save/invest?

Share and Enjoy:
  • Tipd
  • Digg
  • TwitThis
  • Technorati
  • del.icio.us
  • Facebook
  • Mixx
  • Reddit
  • StumbleUpon
  • Google Bookmarks
  • Propeller
  • Yahoo! Buzz
  • E-mail this story to a friend!
You can leave a response below, or trackback from your own site.
  • vccxdews
    Just since the choose of the meticulous Cheap Louis Vuitton permits the dude or ladies to outline themselves, the visual element and framework within of the Mahina can be an even more product to fitting the dimension of each and every   female’s figure. It is vital using the lady for getting acquainted with   and recognize her individual body’s proportion using the reason that   this could be the time frame to begin to pick which purse Surya could be perfect. Is it not wonderful that you just can store from   home, without any going out? probably the most effective element could   possibly be the actuality that you just could possibly get almost EPI Leather carried out within of several clicks, as well as your purses could be   shipped at your doorstep.We all may concur that custom made purses are   way as well eye-catching and trendy; nevertheless, not Suhali Leather can afford to pick out one. In these instances, probably the most   effective option will be to pick out much less pricey wholesale purses.   There are really a few Fall Winter 2012 that make wholesale purses. They are very easily available in different   retailers, in spite of the actuality that probably the most effective   method to pick out much less pricey wholesale purses is concerning the Monogram Canvas.Among   the very best benefits of choosing wholesale purses concerning the   internet could possibly be the actuality which they are supplied at very   much much less pricey Monogram Vernis.   The induce could possibly be the actuality that you’ll locate several   center guys involved, using the reason that of which the excellent keeps   exactly the comparable as well as the expenditures are Monogram Denim.   All you truly should do will be to pick out a internet website which   have been in wholesale purses industry for sometime. among the several   beneficial components of choosing much less pricey wholesale purses Monogram Empreinte the internet could possibly be the actuality that it also spares you inside the annoyance of going in the direction of the Monogram Multicolore.
  • Looks like a sweet plan. I'm working on something similar to this as a plan for our budget, and these ideas are great.
  • Thanks! So far, so good. My emergency fund and debt payments are both ahead of schedule.

    What's your plan like? I'd love to hear what you're up to. I enjoy learning from others.
  • (deleting - meant to post as a response to the comment above)
  • David:

    Solid plan!

    I do it with what I call squirrel accounts . . .

    http://divorceddadfrugaldad.co...
  • Thanks! I just hope I can continue to save throughout the year. Having a plan doesn't do much good without action.

    I like your post on squirrel accounts - it sounds like we have a very similar mindset. Have a seperate, online high-interest account, and make regular depostis, as well as squirreling away any extra nuts you happen to come across.

    I squirreled away an extra $88 dollars (on top of my regular deposit) by doing what you said.

    Thanks for the comment!
blog comments powered by Disqus