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It is tough to save money on a tight budget. When you are living paycheck to paycheck, saving is often the last thing on your mind. The idea of saving for what might seem like frivolous spending can seem downright ridiculous.
However, life doesn’t begin only when you get out of debt. It’s important to balance your “gazelle focus,” as Dave Ramsey calls it, with having fun, making memories, and living a life you will enjoy telling stories about when you are older.
Saving takes discipline, but that doesn’t mean it can’t be fun, too. Cashing in my change jar to fund my mini mountain vacation encouraged me to find some fun and (mostly) painless ways to stash some cash so I can add more fun and adventure to my life right now.
1. PUT A NAME ON IT
Some people might be motivated by putting money into a big pot just for the sake of saving, but I need a vision to motivate me! Every dollar I spend gets categorized, so my various jars of cash and savings accounts get names too: trip to the mountains; stand-up paddleboarding at Weeki Wachee Springs; kayaking with dolphins. I like to add pictures to inspire me and whenever possible I put a deadline on it, too (“someday” is not a deadline).
2. Keep the Change
Everyone should have a change jar! It is one of the easiest ways to start saving for something special, especially when you live on a cash basis. Just dump your pockets, purse, and wallet in the jar each evening. Get the family involved, too! Once I designated our change jar for “family fun” everyone was more than willing to add their two cents (and dimes, and quarters).
I re-purposed a pickle jar for our travel fund change jar. For the past year, I hid it in my closet to discourage “borrowing.” Since I recently cashed it out for a weekend getaway, it’s time to start filling it again. This time, though, I’m going to decorate with a fun label I found on Etsy and leave it out where I can see it so I’m motivated to fill it up faster.
3. Penny Challenge
You may have seen the 52-week savings challenge, where you save one dollar for each week of the year ($1 in week one, $2 in week two, etc). At the end of the year you will have saved $1,378. That’s a great goal, but sometimes squeezing even $10 or $12 out of the weekly budget is difficult, much less $40 or $50 just in time for the holidays.
Try the Penny Challenge instead. How many times have you walked past a penny on the ground or vacuumed one up because you were in too much of a hurry to pause and pick it up? No more! Now you can put them to work.
The concept is the same, but instead of saving dollars, you save cents. At the end of the year, you would have $667.95. I don’t know about you, but that would make for a pretty nice holiday shopping spree in my household!
If you are feeling ambitious, here is a printable for the 52- Week Savings Challenge as well!
4. round it up
Another way to put small amounts to work is to round up your purchases to the next dollar and save the cents. Some banks, like Chime, have automatic savings programs that do this for you and move the cents to a savings account.
If your bank doesn’t offer this, you can sign up with Acorns, a service which allows you to use your change to build an investment portfolio (you can choose the level of risk you are comfortable with). Acorns monitors purchases and rounds up transactions on any accounts you link and then invests the round-ups when they reach $5.
There is no charge if you are a college student – for others it is $1/month until you reach $5,000, then it is .25%/year. Also, because it is an investment account and not a savings account, there is a possibility that you could lose money.
NOTE: Acorns will draft your account once you reach the $5 threshold whether you have the money in your account or not, potentially causing overdraft fees. If you don’t keep a cushion in your account or have a bank which allows you to avoid overdrafts, this may not be for you.
I’ve been using Acorns for almost a year. I like the fact that this account is “out of sight, out of mind” unless I specifically log in or open the app to see how much I’ve accumulated. For me, having the money in a savings account I see every time I log in to my bank account is too tempting!
5. save the presidents
If you really want to take it up a notch, commit to saving every bill of a certain denomination that crosses your path, like $1 or $5 bills. Can you imagine if you started doing this when your child or grandchild was born – what a graduation or wedding gift that could be!
Marie Campagna Franklin dedicates her entire blog to showing people how to build a nest egg with five dollar bills over at Save Money Fast with Fives.
6. kick a habit
Do you have a habit that you could stand to quit? Use a savings goal as an incentive to change your behavior by stashing the money your habit is costing you. You’re already spending the money, so you won’t miss it, right?
Seven years ago I quit smoking. Not including interest I could have saved $1300 a year or more had I redirected the money I was spending on cigarettes. Multiply that by seven years, and yikes!
Quit now and start saving instead of letting the money gets sucked back into your budget!
7. Cash out your coupons
Do you shop with coupons? Set your goal to stay within your grocery budget before coupons and savings. At checkout, ask the cashier to cash out your coupons instead of applying them to your total. Or, immediately transfer the “amount saved” listed on your receipt to a savings account (this is where banking apps come in very handy!)
8. put it on a card
A gift card, that is. If you are saving up to buy something from a specific store, purchase gift cards periodically instead of putting the cash in savings. I know I often found it very tempting to rob my savings account when something came up or I got tired of looking at a credit card balance.
9. Ignore the Extras
Next time you get a raise, bonus, or other unexpected windfall, put it right into savings. Just like stuff has a tendency to multiply and expand to fill a bigger space, spending has a tendency to grow to meet or even exceed income. Ignoring increases in income automatically trains you to live within your means.
10. Set it & Forget it
Maybe the best way to save is to set up automatic transfers either from your paycheck or your bank into a savings account before you ever get your hands on it. You may feel the pinch for a short while, but before you know it, you won’t miss what you don’t have to spend.
There are many ways to start saving money, no matter what your income or financial situation, but the number one most important thing to do is just start. Making a game of it can make it a little easier and certainly more fun, so pick one or two tips and get started. The more you save, the more you will want to save!