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.
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. If you earn $8 an hour, and you’re looking at this cute dress that is worth $100, then that means you will need to work for 12 hours just to buy this dress. 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 for just one dress? Think about it.
2. Include a “guilt trip” card 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, Anne! 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 “T,” I would save every bill with a serial identification that starts with that letter. There are times when I’m lucky, because only my $20 bills had “T.” But just recently, my $100 bills became my sentimental bill. It’s better to think of money this way: you’re saving it for yourself.
4. 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.
5. Declutter
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.
6. 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.”
7. 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.
8. 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.
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