We’ve all read articles about ways to save money, or tips in controlling spending. But sometimes we get used to the obvious and common ways and they become routine. As humans, who often make mistakes and sometimes lack discipline, we need new ideas to shock our system.
The same holds true in weight training. The weight lifter will gain strength through a routine, but at some point it’s likely a plateau will be reached. To get out of the plateau, the weight lifter must come up with new ways, or exercises to shock the muscles to strengthen more.
I think you can do the same thing as it relates to managing money or performing financial stewardship. There are some subtle little tricks you can do that can add up into some significant savings over time (if you can shock your system). They can get help get you out of a plateau. I call them money mind tricks. Here are a just a few that you can try:
Consider extra money as just another check
Your bonus or tax refund is just another paycheck. Before you have a chance to decide what you’re going to do with the money, fund your retirement, savings, giving and debt goals just like you would if you were receiving your typical monthly paycheck. Often we see this new found money as freedom to go and spend. Some spending is fine. However, don’t get overly excited and view it as extra money.
Why does this work? If you pretend like you need the money versus seeing it as extra money you will manage it more wisely and be able to contribute to your goals.
Pretend you have less than you do
Another good mind trick is pretending you have less money than you do. This can be done by forgetting about $100 in your account, or forgetting you have money in a budget category such as entertainment. Of course, you really know it’s there, however, you can decide to block spending on that money just like you lost it or forgot it. A good way to lose or forget the $100 is to create a transaction in your register for $100. Call it “money mind trick” and take it out of an area in which you want to create more margin.
Why does this work?
You’re accustomed to having the money available to you. And as long as the money is there, you’ll probably spend it. However, if you can interrupt that behavior you may find you really didn’t need the money after all and you can grow accustomed to spending less in an area such as entertainment.
Round up budget categories
When I plan my budget each month I like to round up budget categories. For example, let’s pretend your car payment is $300. What if you budgeted $310? And maybe you over budgeted in a few other areas for the month as well. Do you think you could over budget $50 and save that extra money? At the end of the month the extra money in each category can be used to fund other needs based spending or transferred directly to your savings account.
Why does it work?
Even if you didn’t send it over to your savings account immediately you will be creating more margin in your checking account each month to protect against the unexpected. Before long you just forget this extra money is there and it can grow into hundreds of extra dollars. You can then sweep through your categories and collect the extra money for savings, giving, etc.
Budget using net spendable income versus net income
Net spendable income (NSI), as defined by Crown Financial Ministries, is money available for spending after tithe and taxes. All of the sudden, you no longer have to find money to tithe. The money has already been purposed for this use. It’s now up to you to figure out your spending plan with what is remaining, or the net spendable income. Guess what? This includes using money for your 401(K) and other savings too. It should be taken from NSI.
Why does this work?
Most importantly, it sets your priorities in order. You’re tithing first and trusting God with this money is probably the most liberating thing you could ever do. By taking out the money first you no longer have to search for where to find the money to give each month. As an aside, the next payment you should make is to yourself (savings).
What do you think about these money mind tricks? Can you think of others?
Photo by nathangibbs
{ 7 comments… read them below or add one }
Those are great tips! I never thought to over budget…will have to approach my other half with this idea.
We save half of all “Extra Money” like bonuses, tax refunds…
I would agree with the first statement, consider extra money just like regular money. Tithe it, Save it, and pay off debt with it – THEN do the fun spending of it.
i just used your first tip when i got a bonus for march. I transferred it directly into my savigns account and didnt change any of my spending, pretending like it was never there!
I agree with the points in this article. A lot of spending is a reaction to what you see and what you think you have. Somewhat tricking yourself to believing the money is not there is a good step towards preventing the purchase.
The same can be true if you just follow a budget. At the end of the day it is all about self discipline.
My wife and I follow some of these.
- When we know that we’re getting extra money, we plan out what we will do with it. When we don’t, it goes directly into the savings account.
- We have two checking accounts: One for spending, and one for bills. Off the top of her head, my wife always forgets that we have “other money” in the bills account. The money set in there is out of sight, out of mind, so there’s no temptation to spend it. Even if there was, it is already purposed!
The net spendable income mentality is one we’ve used from the get go. It’s amazing how God expands what you have to supply what you need.
A couple of tricks we’re using currently. They’re almost games. The change jar. We do alot of our purchases in cash, so we use bills to pay and all coins go into the jar. We’ve used it as spending money during vacations in the past. We’ll probably get about $25 each this summer.
Another method (new this year) is saving the crispy dollar bill. All crispy dollars are being made into money origami and will be given to the cousins as Christmas presents. That will free up cash in the budget’s “gift” category. With 7 young cousins, it adds up.
The third method is to “pretend it’s not there”. Every paycheck I take grocery cash and set aside $20 off the top. If I find I need it, it’s available, but about half the time I can make do. After that pay period is over it’s put in a “do not touch” envelope for some big goal. So a good month can clear $40.
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