Life is expensive. From day to day bills, life expenses, and unexpected emergencies, it's easy to feel like there is little left over to save. But saving is a necessary part of financial wellness in order to avoid debt and prepare for the future. And sometimes you have to trick yourself into saving.
Oftentimes saving money can feel like extra work. It's less sexy than spending, but in the long-term, can serve you much better. When we discussed how Frugal Living Won't Make You Rich, it wasn't about avoiding saving money, but amount being smart about it. This is being smart about it.
If you are struggling to save money, here are 5 hacks to trick yourself into saving.
Automate Your Savings
One of the best ways to save money is by automating your savings. Through automation, I was able to save over $14,000 for graduate school, without even thinking about it.
Come up with a percentage of your income you are comfortable saving — the more the better — but if your funds are limited, commit to one percent. Everyone can save at least one percent of their income.
Then schedule the automatic withdrawals from your checking account to your savings account, and voila. If you have trouble with boundaries, consider getting a savings account at a separate bank than where you have your checking account. This will make it harder to access, so you can keep your money in savings and not just transfer money haphazardly.
Pretend It's a Bill
Many financial experts tout the benefits of paying yourself first. Why? Because it's easy to make excuses about why you can't save if you wait until everything is paid. To combat this, pretend that saving money is a bill.
Consider it an invoice from your future self. Your future is calling and is billing you in the present. So pay yourself first, like it's a bill, then pay your rent, groceries, etc. Trust me, you'll thank yourself later.
Use Automatic Spending Apps
If you are unsure of how much you can afford to save, but know you should get started, consider using something like Digit. Digit is a web-based app that syncs up with your checking account. After reviewing your transactions and spending history, it automatically withdrawals a certain amount of money — usually a small amount — every few days into a Digit account.
They have a no overdraft guarantee, so you don't need to worry if their system will leave you with an empty bank account. The one issue with Digit is that you do not accrue any interest using their service — which is how they make their money.
Check out our list of other automatic savings apps here.
Commit to Saving Your Spare Change
In the age of credit, spare change seems to be disposable. But all that change adds up! When you carry cash and get change back, put it in a savings jar. Label the jar something fun like the “Rainy Day Fund” or “Date with my Wife Fund”. Of course, you won't save big this way, but it's a convenient way to save up some fun money without working too hard.
If you want an automated way to save your “extra” change, look at a tool like Acorns that invests your spare change for you.
Direct Deposit Your Checks into Your Savings Account
Most people deposit their checks into their checking account — it makes sense, that's where you pay your bills. But if you really want to jump start your savings, deposit your check into your savings account and transfer what you know you need for your bills into your checking account. This is a surefire way to pay yourself first.
Another trick, which most companies allow, is to direct deposit your paycheck into several accounts. You could set it up so that 90% of your paycheck goes into your checking account, while 10% goes into your savings account.
To effectively manage this step, you should know how much you pay each month in fixed expenses and budget some extra money for variable expenses. Having a cash buffer can also help ensure that this system works for you.
Using these five hacks, you can effortlessly save money — so you can prepare for the future and fund your life goals and dreams.
What other simple money hacks do you have to save more?