12 tricks to save money
MANILA, Philippines - As a 20-something who is living in the real world (complete with real lives, real food, and real utility bills), forcing yourself to save money, constraining yourself not to touch it unless you have an “emergency” is a difficult task.
Saving money is hard – and boring. And most of all, it's so not effective!
There's the matter of self-discipline that you need to develop.
“Oh, I'll just spend a little for this 'mini emergency'” turns into “I've been saving a lot now so I should buy something expensive to reward myself,” and before you know it, your bank account shrinks back to zero and then you begin to think that you dislike yourself. (We've all been there, my friend...)
Just like when we can't resist spending our time on utterly nonsensical reality TV shows – even when we know they're bad for our mindset – we also can't resist spending away our hard-earned money, even when we know it's bad for our wallet.
What should we do then? Well, if you can fool yourself into spending more money, then you can absolutely fool yourself into saving it as well:
1. Calculate your hourly rate.
From your hourly rate, you will then decide whether you want to spend hours worked, instead of money earned. Let's say that you earn P20,000 a month and you work 40 hours a week (which is computed into 160 hours a month):
P20,000 / 160 = P125.00
Based on my example, you actually earn P125.00 per hour. That dress you're looking at right now costs P1,500. Do you really want to spend 12 working hours just for a dress? 12 hours of tiring labor, 12 hours of your boss stressing you out, 12 hours of your back hurting, 12 hours of doing confusing reports and 12 hours talking to nettlesome colleagues for just one dress?
Think about it.
2. Include a “guilt trip” card or picture in your wallet.
Let's say that you're using cash exclusively when going out. Every time you open your wallet to take out some cash, you should always see this guilt trip message to make yourself think twice before spending. Some effective messages that you can use are:
Don't do it – your older self will hate you for it.
You worked hard for this money. Don't just spend it recklessly.
You're saving up for emergencies like unexpected hospital confinement or unemployment, remember?
Don't be pressured into buying that dress, Lianne! It doesn't look good on you – the saleslady's just being polite!
3. For cash users, save your “sentimental” bills.
All bills have serial numbers and letters on them. Designate a certain letter that you’re going to use to determine if a bill is sentimental or not.
As my name starts with the letter “L,” I would save every bill with a serial identification that starts with that letter. There are times when I'm lucky, because only my P20 bills had "L." But just recently, my P1,000 bills became my sentimental bill. It’s better to think of money this way: you’re saving it for yourself.
4. If you're using credit cards, include a compelling photo in your credit card's sleeve.
This photo can either be motivational (a picture of the Eiffel Tower because you may be saving up for a trip, or a picture of your potential small business's logo) or disastrous (a picture of a hospital's emergency room or a homeless elderly). Choose something that will make you hesitate in swiping that card.
5. Wrap your credit card into your credit card statements.
This one’s a real gem: instead of using sleeves, cover your credit cards with your credit card statements. It goes two ways: one, it's going to take time to retrieve your credit card; and, two, you’re going to see the amount you owe from your credit card statements, so this can discourage you from swiping that card.
6. Freeze your credit cards.
If you really can't control yourself from using your credit cards and you know that you also can't afford to pay the full balance and in time, just freeze them! Get a container, fill it up with water, put your credit card in it and store it into your freezer.
The worse your lack of self-control is, the larger your container should be. It's pretty inconvenient to wait for your card to defrost when your friends are already waiting for you.
Look around your room and collect those items that you never really use anymore. You can either sell them or donate them to charity. Save money by either depositing your proceeds from your garage sale or including your donations in your tax-deductible list.
8. Carry only big bills with you.
When going out with friends, carry only bills in P1,000 denominations. (If you don't have them, don't go out in the first place!) There's just something psychologically excruciating in breaking your P1,000 bill just for a P140-cup of cappuccino. It'll really make you decide whether or not to spend your money.
9. Save that change.
If you spend your P1,000 bills, though, make sure you save the change in your bank account. Have a motivational jar in your house and stash all your change in there. Then, every two weeks, deposit this change in your savings account and forget it exists.
10. Name your bank accounts.
Nowadays, you have the option of naming your bank accounts according to their specific purposes. You’ll feel more obligated to save money for your “Enjoy Trip to Paris” rather than your “Savings Account 084639826.”
11. Set up automatic transfers.
I'm pretty sure you can talk to your bank about this one. You’ll have 2 bank accounts here –account A is your salary account and account B is your savings account, preferably no ATM.
If your salary goes into account A, you can ask your bank to withdraw (at least) 5% and deposit it to account B automatically. Don’t trust yourself enough to do this manually. The pain is just too unbearable. Leave it to automation instead.
12. Imagine your old self.
Because all you see right now when you look in the mirror are your youthful skin and childlike expressions, you’re not taking saving seriously and you think you still have a lot of time for that.
You can remedy this by printing an old photo of yourself and posting it on your wall. You’re bound to feel more mature and responsible because you have a visual reminder of what your future will be like. In today’s technology, you can easily find online programs that can make your current photo look older.
Let's stop forcing and start fooling ourselves (in a good way) into saving money instead. Your older self is watching! - Rappler.com
Lianne Martha M. Laroya, 22, founded The Wise Living to educate fellow 20-somethings on money management and early investing without boring them to girly tears. Want to talk to her? Connect with her on Twitter@MsLianneLaroya!
Photo from Shutterstock
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