Redeeming Riches » money saving tips

4 Ways to Trick Yourself Into Saving Money

KNS Financial — Mon, 03 Jan 2011 11:50:21 +0000

Most of us know that saving money is, ultimately, a good thing. When the economy began to tank, we heard much about our low (and sometimes negative) savings rate. Even with all of the discussions and warnings about saving money, it can be extremely difficult to put it into practice.

Well, here are four easy techniques you can implement, that will help you to save a lot more money without even realizing it!

Pay Yourself First – Automatically

Most people have heard the mantra, “pay yourself first”; however, many people still neglect to do so. With each paycheck that comes, they continue spending as before and promise to start saving next week.

In order to make this mantra a reality for you, start saving automatically. You can do this in two ways. First, you can set up a portion of your paycheck to be directly deposited (You do have direct deposit, don’t you?) into your savings account. Even most online banks allow for this.

Secondly, you can have all of your pay deposited into your checking account, and just set up a recurring transfer between your checking and savings accounts. Either way, your goal is to not even see that money – lest you become tempted to spend it!

Actually, I would suggest a third way of doing this. Have your paycheck deposited into your savings account, and only transfer money out that youhave to spend! That way you are much less tempted to spend any surplus that you may have, since it will mean depleting your savings account in order to do so.

This can be a great way to automatically build up an emergency fund, or save up for an expected purchase!

Save Your Savings

If you are anything like me, once you decide to make a purchase, you look for deals, rebates, and coupons in order to spend less money! Well, the next time you spend less than you originally budgeted for an item, save the difference.

Since you already planned to spend the full amount, you won’t even miss that money. However, that extra cash can do a lot for you if you stash it in your savings account.

Consider the Opportunity Cost

Opportunity Cost simply means the value of your next best alternative. This is different than considering the price of something. Let’s look at a very simplified example.

Say you only have enough money to either get a slice of pizza, or an ice cream cone. If you decide to get the pizza (the obvious choice here ), then your opportunity cost is not the money you spent on the pizza, but it is the loss of the satisfaction that you would have received from the ice cream.

Most of the time that we have to make a decision about saving money, it is usually in opposition to spending. So, when you choose to spend $150 on cable TV, then your opportunity cost is the benefit that you would have received from saving $150 extra each month!

So in the example above, choosing cable TV over savings for 5 years costs you nearly $10,000!!! That is if you save $150 a month for 5 years and earn 2% interest each year.

Thinking in this way makes it more difficult to pass on saving money, since it causes you to focus on the value of what you are foregoing. So the question is not just, “Is cable worth $150/month?”, but instead you must consider, “Is cable worth me depleting my savings account by $10,000 5 years from now?”!

Save What You Don’t Spend

This is sort of a combination of the two previous points. When you consider making a purchase – even something small such as dining out – you also have the option to change your mind.

This happens to my wife and me all the time. I may decide that it’s time to replace my MP3 player, and spend $50 on a new one. Then I think about my wonderful phone that can play MP3′s (and even stream Pandora) and change my mind. Sometimes she will want to buy a new comforter set, but decides to wait instead.

In these cases, we will take the money that we were going to spend and either put it in our savings account, or sign onto our bank’s website and set up a payment to a creditor! The idea here is that if we somehow were able to find extra money for these unplanned purchases, then we can find that same money for savings or debt repayment!

Reader Questions

How do you “trick yourself” into saving money?
Would you be willing to deposit your entire check into savings and only remove what’s needed?

photo by Nieve44/La Luz

10 Money-Saving Tips to Help You Stash $10,000 – Tip #3

Jason — Wed, 24 Feb 2010 12:32:37 +0000

Tip #3 – Cut Your Cable

Welcome to day three of our roughly 10 day journey to save $10,000 over this next year. If you missed the introductory post of 10 Money-Savings Tips to Help You Stash $10,000 you’ll definitely want to check it out so we’re all on the same page.

But to sum it up – here’s our mission:

The Goal: Save $10,000

By When: This time next year

How: By implementing 10 money-saving tips

For the next couple weeks we’re going to look at one money-saving tip each Monday, Tuesday and Wednesday.

On Thursdays we’re going to hear Personal Finance bloggers’ and hopefully some readers’ ideas and experiences on how they’ve saved money!

If you’d like to be included in the Thursday posts – please let me know your best money-saving tip here! We’d love to hear your stories of what you did and how much money you saved by implementing your tip!

If you’re a blogger and have posted about your money-saving tip, please include a link to your post!

Tip #3: Cut Your Cable

I know I’m stepping on to some thin ice here, but I just have to do it. The average digital cable subscriber spends approximately $75 per month and many pay well over $100!

Now before you get too upset – I am NOT suggesting you need to get rid of your cable altogether, although there are some who are in full support of cutting cable completely and have saved a lot of money doing it!

Take for example, Kita – from Personal Finance Journey. She recently posted about how she got fired up to knock out some debt and made a radical decision to cut off her cable completely and saved over $70 per month!!

What I’m suggesting here is at the very least taking a look at your bill and sacrificing a bit to help shave some expenses. Especially with all of the technology out nowadays like streaming from Netflix, Xbox or even just using your computer to watch shows online – there is no reason why you can’t find the shows you want.

Seriously, do you really need 800 channels?

My wife and I just recently moved in our new house and after some debate we decided to go with the Direct TV family package, which includes channels we like HGTV, DIY and Food Network. It also has all the cartoon and kids programming that we wanted as well since we have a daughter that is totally into Dora.

It only has 50 channels, but the regular rate is $43 per month with taxes!

It doesn’t have ESPN, but can I get by without it? No – I mean Yes, yes I can. I can actually check any highlights I want on ESPN.com!

Will I miss some games I really want to see? Sure, but I can see most of the games that I’m into and if there is something I want to see, I can always find a friend or family member and invite myself over!

I remember talking to someone a while back who was loaded to the gills with credit card debt. It was so bad that the interest being paid was similar to most people’s mortgage payment!

One of the things they staunchly refused to cut back on was their $150 cable bill stating they “needed” all those movie channels and premium packaging for their teenage boys.

One of the things you can do also is to negotiate with your cable provider for a lower rate.

So, take a look at your cable bill – see if there are some channels that you can do without for a while and give your cable company a call! You’ll be glad you did.

Estimated Savings: $25-$75 per month

Don’t miss another post! Get Redeeming Riches delivered straight to your inbox!

Check Out All The Tips From Our Series

Tip #1: Cut Back on Going Out to Eat

Tip #2: Evaluate Your Entertainment

Tip #3: Cut Your Cable

Tip #4: Turn Your Heat Down

Tip #5: Negotiate Your Cell Phone Plan

Tip #6: Get Rid of Your Land Line

Tip #7: Slash Your Grocery Bill by Cutting Out Junk Food!

Tip #8: Use Coupons, For Everything!

Tip #9: Negotiate Your Home and Auto Insurance

Tip #10: Start Packing Lunches!

10 Money-Saving Tips to Help You Stash $10,000 – Tip #2

Jason — Tue, 23 Feb 2010 12:43:28 +0000

Tip #2 - Entertainment

So, we’re on day two of our roughly 10 day journey to save $10,000 over this next year. If you missed the introductory post of 10 Money-Savings Tips to Help You Stash $10,000 you’ll definitely want to check it out so we’re all on the same page.

But to sum it up – here’s our mission:

The Goal: Save $10,000

By When: This time next year

How: By implementing 10 money-saving tips

For the next couple weeks we’re going to look at one money-saving tip each Monday, Tuesday and Wednesday.

On Thursdays we’re going to hear Personal Finance bloggers’ and hopefully some readers’ ideas and experiences on how they’ve saved money!

If you’d like to be included in the Thursday posts – please let me know your best money-saving tip here! We’d love to hear your stories of what you did and how much money you saved by implementing your tip!

If you’re a blogger and have posted about your money-saving tip, please include a link to your post!

Tip #1: Cut Back on Going Out to Eat

Tip #2 Evaluate Your Entertainment

Over the course of this journey, we’re breaking down the US Bureau of Labor’s statistics on average consumer expenditures and taking a look at some ways to cut back.

Next we tackle your entertainment.

Maybe your entertainment budget includes going out to eat like ours does, but even so you should probably evaluate your other forms of entertainment.

According to the most recent survey, the US Department of Labor reports that the average American family unit spends $2,698 a year on entertainment costs – or roughly $225 per month!

Are you movie buffs and love going to the theatre? You’re well aware it’s easy to drop a 20 spot without blinking. After your ticket, a popcorn and a soda, your Andrew Jackson is throwing you a goodbye kiss on the way to the register!

Maybe you enjoy going to professional sports games, going out for a night on the town with some friends or hitting up the local Starbucks several times a week while reading a book.

Again, the challenge here is not to get you to stop doing these things – it’s to challenge your conventional thinking to see if there are some ways to trim the fat.

Finding Frugal Entertainment Alternatives

If you’re a social butterfly, this doesn’t mean you have to turn into a homebody or that you can’t get out of your house to have some fun, but think about some alternatives.

How about starting a Frugal Club like Tisha talks about over at Wise Bread.

The first rule of Frugal Club is you don’t talk about Frugal Club!

Sorry, just seeing who’s on their toes.

Try waiting for a movie to come out on DVD or going to the town’s local theatre if you have one. Sure, you won’t get to see the latest and greatest, but you’ll save some money.

Try getting together with some friends at your house and enjoy a game night!

We just did this last weekend with some friends. We ordered pizza, played some games, had great conversation and a ton of laughs!! Total cost? $10!

Get your friends on board with your saving challenge so they’re not enticing you to go out every night.

Try alternatives like local museums that offer free or discount days.

You get a bunch of friends together and go camping. My wife and I do this every year and we love it!

Get creative, frugal living doesn’t have to be boring!

You don’t have to stop spending on entertainment, just look for some fun ways to cut back.

Estimated Savings: $25-$100

Share Your Thoughts!

Don’t miss another post! Get Redeeming Riches delivered straight to your inbox!

Check Out All The Tips From Our Series

Tip #1: Cut Back on Going Out to Eat

Tip #2: Evaluate Your Entertainment

Tip #3: Cut Your Cable

Tip #4: Turn Your Heat Down

Tip #5: Negotiate Your Cell Phone Plan

Tip #6: Get Rid of Your Land Line

Tip #7: Slash Your Grocery Bill by Cutting Out Junk Food!

Tip #8: Use Coupons, For Everything!

Tip #9: Negotiate Your Home and Auto Insurance

Tip #10: Start Packing Lunches!

10 Money-Saving Tips to Help You Stash $10,000!

Jason — Mon, 22 Feb 2010 15:31:42 +0000

Who doesn’t love to save a little extra cash each month?

Finding money saving tips to trim the fat and pocket some coin each month isn’t easy, but it is simple.

The question is, “Will you do what it takes – and if so, what will you do with the extra savings that you find each month?”

Saving the extra cash is critical because let’s face it, the average American spends more than they make!

Most people find other ways to spend their money rather than socking it away into an emergency fund or long-term savings.

But, just imagine if you got on board with these money saving tips – how much better financial shape would you be in?

You’d feel better about yourself and your future and you’d be in a position to do things you really want to do with your money.

So here’s what we’re going to do:

The Goal: Save $10,000
By When: This time next year
How: By implementing 10 money-saving tips

The Plan to Save $10,000

For the next couple weeks we’re going to look at one money saving tip each day.

On Thursdays we’re going to hear Personal Finance bloggers’ and hopefully some readers’ ideas and experiences on how they’ve saved money!

When all is said and done and you’ve implemented each of these 10 tips, you’ll have saved over $10,000 this next year!

Of course, not everyone will be able to save 10 G’s, but even if you don’t save quite that much, saving a couple thousand bucks will be worth it!!

So, are you ready to check out these money saving tips and come along for the ride?

Let’s save some money!!

Tip #1: Cut Back on Going Out to Eat

Let’s be real here. We probably all spend a little too much on going out to eat. It’s hard to walk out of a chain restaurant and not drop $30-$40 on a meal if you get an appetizer, two entrees and a couple drinks!

How often do you do that per month or even per week? As you’re well aware, this can add up pretty quickly.

According to the Bureau of Labor Statistics in their 2008 Consumer Expenditures press release - they cite the average 2.5 unit household spend approximately $2,698 on food away from home!

That works out to be roughly $225 a month on going out to eat!!

Let that sink in a minute. $225.

Now, I love going out to eat – who doesn’t right? It’s fun, it’s easy and there is some pretty good food out there. But hear me out for a second -

Don’t miss another post! Get Redeeming Riches delivered straight to your inbox!

What if, instead of going out three, four or five times a month you cut that back by two! Only two!

I’m not asking you to give up eating out completely – that’s just silly and you and I both know YOU WON”T DO IT! It won’t be a goal you can commit to for a long period of time.

But, giving up two meals is a goal that you can reach! Give it a shot next month and see what happens.

What should you do instead? Well, invite some good friends over, grill out or cook a good meal and enjoy conversation at home rather than in a restaurant.

Or, why not invite a few couples over and each have them bring something. You can do dinner theme’s so everyone brings something that goes together.

Start rotating houses every month and have a good time with great friends eating good food and saving some good money.

You’ll be surprised at how much fun you can have by doing this and you’ll feel good about yourself that you saved some money!!

Estimated Savings: $40-$100 per month

Share your thoughts below on how much you’ve saved by cutting back on eating out!

Check Out All The Tips From Our Series

Tip #1: Cut Back on Going Out to Eat

Tip #2: Evaluate Your Entertainment

Tip #3: Cut Your Cable

Tip #4: Turn Your Heat Down

Tip #5: Negotiate Your Cell Phone Plan

Tip #6: Get Rid of Your Land Line

Tip #7: Slash Your Grocery Bill by Cutting Out Junk Food!

Tip #8: Use Coupons, For Everything!

Tip #9: Negotiate Your Home and Auto Insurance

Tip #10: Start Packing Lunches!

9 Tips to Save Money on Gas Without Buying a Hybrid

Jason — Mon, 29 Jun 2009 12:03:41 +0000

If you’re looking for more ways to save money - Check out 10 Money-Saving Tips to Stash $10,000!

The price of oil has steadily increased for the past few months.

Saving money on gas doesn’t mean you need to run out and buy a new hybrid.

Here are nine things you can do right now to save money on gas so you don’t break the bank when you’re fueling up for your summer road trips:

Save Money on Gas by Pumping ‘Em Up

Believe it or not, properly inflated tires can help improve your gas mileage.

According to the Alliance to Save Energy, low tire pressure can reduce fuel efficiency by as much as 3.3%.

Check your car’s manual or driver’s side door panel to find out the proper inflation for your tires and check regularly.

Save Money on Gas by Being Passive Not Aggressive

Do you drive like you just held up a bank?

Aggressive driving (i.e. speeding, jackrabbit starts, aggressive braking) can lower your fuel economy by up to 33% at highway speeds according to the Alliance to Save Energy.

Driving sensibly and more smoothly will help improve fuel economy by as much as 66 cents per gallon says the Consumer Federation of America.

Edmunds.com explains that if you slowed your 0-to-60-mph acceleration time down from your current 10 seconds to a more normal city pace of 15 seconds, you’d feel an average of 31% savings on your gas costs.

Save Money on Gas by Passing on the Premium

Unless you are driving a high end sports car, most makes and models will perform fine on regular unleaded gasoline.

Premium fuel may boost engine performance a little in some cars, but does not improve fuel economy.

Your owner’s manual will give you recommended octane, but it is just that, a recommendation.

Martin Peters, manager of public relations for Porsche Cars North America Inc. stated in an interview with the Associated Press that even their cars ”will run on regular fuel without damaging the engine,” and the higher octane is really just for “optimum performance.”

Save Money on Gas by Quitting Excessive Idling

Do you warm up your car up to a balmy 85 degrees on a cold winter day or sit in massive traffic jams during rush hour?

Limiting your idling can reduce fuel cost by roughly 19%.

If you are idling for more than a minute, it is recommended you shut down your engine. This may not be possible in work traffic, but can be done if you are stopped at a train.

Also, limit your “warm ups” on your car to only a minute or two.

Save Money on Gas by Slowing Down

This might be tough for some of us, but gas mileage decreases rapidly over 60 mph.

Every five miles per hour over 60 is like paying an additional 20 cents per gallon of gas.

A blogger at Wise Bread talks about how he increased his fuel economy by 15 mpg’s by simply slowing down.

Save Money on Gas by Planning Ahead

Do you tend to run multiple errands during the week?

Try planning ahead to reduce the number of trips you are taking by combining your errands into just one or two days.

Also, plan your routes in advance for the most efficient path to reduce excess mileage.

Save Money on Gas by Shopping Around

Technology makes shopping around so much easier when it comes to finding the cheapest gas prices.

You don’t have to drive around from station to station looking for the best deal.

Check out GasBuddy.com. This handy website can help you find cheap gas prices in your city.

Save Money on Gas by Lightening Your Load

All that “junk in your trunk” can be a real drag on fuel economy.

According to Brian Carr at dailyfueleconomytip.com, for every extra 100 pounds you carry in your vehicle, you reduce gas mileage and fuel economy by roughly 2%.

He tells of his real life example of taking out his golf clubs, cd cases and library books and shedding 44 lbs. It all adds up.

Save Money on Gas by Taking the Challenge

The Alliance To Save Energy has a fun website calculator called the Drive Smarter Challenge.

This allows you to enter the make and model of your car and your zip code and they will show you the potential gas savings for your vehicle while they walk you through each idea.

Save Money on Gas Because It All Adds Up!

While these ideas may not seem like a lot on their own, as a whole they can begin to add up and put some cash back in your pocket.