With wages down and cost of goods up, it's not easy to save. After years of savings rates close to zero however, Americans are getting smart about their money again: even though the economy is still in a rough spot, we're saving an average of 5.3%, according to June data from the Bureau of Economic Analysis. Not bad, but if you're like most people, you would probably like to do better. Here are five ways to trick yourself into saving more.
1. Go On Autopilot
Ever heard the phrase, "pay yourself first?" It's the best trick to get into the habit of saving: when you pay your bills come payday, budget for your savings just like it's another bill you're paying. Set up separate accounts for emergency savings (for when the car breaks down, or the water heater breaks), retirement and for more fun goals like that family vacation.
Make your savings a no-brainer by setting up an automatic transfer to the account(s) on payday, so you're not tempted to spend the money elsewhere. (Learn more in 4 Reasons Why Savers Fare Better Than Spenders.)
2. Keep The Change
Keeping your change over the course of a year can easily add up to a few hundred dollars in savings - another painless way to save. And you'll really grow to love those pennies that used to clutter up your wallet.
3. Forget The Raise
Got a raise? Congratulations! Before you start spending this windfall, increase your automatic transfer to your savings account to reflect that pay increase. If it's an annual cost-of living increase, you've likely already adjusted to higher prices, and if it's a promotion-related raise, you won't miss the money.
Instead of spending your extra pay, put it towards something that's important to you, like retirement savings or a family vacation. (There are many ways your employer can make your job more pleasant, even when money is tight. Check out Can't Get A Raise? Negotiate Your Benefits.)
4. Keep The Habit
5. Finders Keepers
We all run into the occasional found money: that rebate check you forgot about, the $20 in your winter jacket from last year or that larger-than-usual tax refund. Instead of blowing this money at your local store of choice, put it into savings. You won't miss the money, and it'll get you closer to your goal if you put it in your savings account, accruing interest. (To learn more, see 5 Ways To Make A Tax Refund Work For You.)
Saving money doesn't have to be difficult. With these tricks, you can take the work out of setting money aside, getting you on your way to reach your savings goal quicker than you would have thought.
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