Sometimes we just need a little push to help us save a little more money.
There are many opportunities to save money that we don’t take advantage of. For some of us, it can be difficult to even get started saving money. With a little effort, you can start to save more money each year.
Here are a few tips and tricks to help you “trick yourself” into saving more money.
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How to trick yourself into saving more money
Increase your retirement contribution percent
One of the best money saving tips is to increase your retirement contribution every time you get a raise.
Let’s say you make a combined household income of $73,000 and are paid 26 times a year. That means your gross income per paycheck is $2,807.69 before taxes. A 6% contribution to your pre-tax retirement account is $164.46 per paycheck.
You’re a super hard worker, so your boss gives you a 5% raise this year. Your new salary is $76,650, woohoo! You now gross $2,948.08 each paycheck, $140.39 more! That means you could invest a total of $304.85, or 10.3% of your new income!
The best part? You’re still living on the same amount of money you did before. You’re just investing more money! You now invest $7,926.10 over the course of a year rather than $4,275.96. That’s $3,650.14 more each year that can take advantage of compounding interest.
This should be fairly easy to do if you have an effective budget and can live comfortably off your current income. When we start getting pay raises without a plan, we start to adapt our lifestyle and spend more freely.
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Save more money when shopping online
Back when I first got married it felt like we were doing a lot of online shopping. We were combining households and finding items that we both wanted/needed and online shopping was the best option.
However, I didn’t want to spend more money than I had too. Finances are one of the top things married people fight about and I didn’t want that to be us. Besides, who wants to pay top dollar for something they could have gotten much cheaper?
So that’s when I put together my master plan for saving money online. Please check out the article for simple tips that help save you money.
Invest money for each purchase
One money-saving app that I found very intriguing is Acorns, an investment app. This app is the perfect way to squirrel away money without having to think about it!
Acorns takes your purchases and automatically rounds them up to the nearest dollar, and invests the change. So if you purchase a soda for $1.35, Acorns will make that purchase $2.00 and puts $0.65 into an investment account.
It’s a brilliant and easy way to start investing. You don’t need hundreds of thousands of dollars to start. You just need to sign up and let Acorns do the investing for you.
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Automate your savings into a separate bank account
Automation is the key to saving money without thinking about it. We all live a busy life so who has time to sit down and think about savings?
I’m a huge fan of saving first and living off the rest. This prevents you from accidentally spending money that you could be saving!
One of the easiest ways to do so is automating your cash savings into a separate bank account. You may be getting paid by direct deposit anyways. Why not add a savings bank account and deposit money automatically for things such as your emergency fund?
It’s the same concept as saving for retirement. You get a paycheck, but the first thing that happens is a certain percentage is sent to a pre-tax retirement account. In this case, you get a paycheck and money is sent directly to a savings account.
Set up a budget
One of the keys to successful money management is to set up a budget. I absolutely recommend the method in the ultimate guide to budgeting because it’s super effective. However, if you’re a bit on the lazier side, the 50/20/30 rule might be for you.
Budgeting is one of the key factors that helped me pay off 40% of my mortgage in two years. I cannot stress how important budgeting can be for your family!
One of the best things we did was set up our budget to live on one income and saved the second. It significantly changed our financial game. We had the leverage of the second income to pay down our mortgage or meet our financial goals.
Pay with cash and save your change
This is similar to using Acorns, but it isn’t automated and the cash isn’t invested unless you do so yourself.
Paying with cash is a great way to reduce your spending. It’s a little bit more of a hassle and your brain registers giving away cash as pain, so you second guess your purchases.
If you do pay for cash, take your spare change and put it in a money jar. Take the money jar to the bank once a year and put it in savings.
Save the random extra money
What do you do with your tax refunds every year? Do you get any birthday money or a bonus at work?
Try and save any random extra money you get throughout the year that isn’t a part of your normal paycheck. It may not seem like much, but every dollar does count.
Most people take their extra money and spend it on meaningless stuff. They buy a bigger tv or go out to dinner. A much better use of your money is to invest it for the future.
Wait before you buy
You’re in your favorite store and you see something you just can’t live without. Don’t buy it! Instead, wait 24 hours and see if you really do want the item.
Most of us buy something when shopping because it makes us feel happy. We didn’t really need the item, but buying it made us feel good.
Waiting 24 hours before you buy will help your body make a rational decision. You’ll be able to find it again if it’s a good product. Don’t worry about the store running out!
Keep yourself busy
You can’t spend your money if you’re too busy doing something else.
One of my least favorite (financially) is the weekend! During the week I’m too busy at work to spend any money. The weekends are dangerous because that’s when I’m out at the store and buying things for the house.
Try to find yourself cheap entertainment options. Keeping yourself busy is the perfect way to not spend money.
Maximize retirement contributions and live on the rest
I’ve talked a lot already about putting savings first and living on the rest. Find out how much money you can put into your retirement account and see if you can live on the rest.
Buy quality over quantity
I would much rather have a couple high-quality items that I use often than a pile of junk. This is the concept of minimalism. Quality over quantity.
It’s ok to spend a little bit more money on something that’s going to last. Don’t buy a cheap laptop that’s going to not work in 3 years. Instead, buy quality items that you can last.
Once you have that quality item, use it until it’s dead. There is too much-wasted money on someone who buys a new car every two years. Buy a car and stick with it until it doesn’t run anymore.
People are quick to jump to a new cell phone as well. You spent $900 two years ago to buy a brand new phone. Now you’re buying another $900 phone?
If you’re looking at saving money, check out our free budgeting and save money course. The course walks you through proper budgeting and identifies areas that most people waste their money! The course will help you start saving more money for your family.