Original article by Janet Bodnar, Edited by Robert Weinberg
I’ve always believed that the trick to saving money is just that — a trick. You don’t have to win the lottery, strike it rich on Wall Street or even earn a six-figure salary to build a comfortable savings cushion. You just have to play psychological tricks on yourself to stay focused on spending less and keeping more cash in your pocket.
1. Start right away. Don’t wait till you make more money. The more you make, the more you spend. For ideas on how to make a salary of any size go further, see our story on easy ways to stretch your paycheck.
2. Start small. It will add up to big piles of money over time. To see how fast your money will grow, plug in your numbers at our How much will my savings be worth? calculator.
3. Write down your goals. That makes them more real, and you’re more likely to achieve them.
Be specific. For instance, telling yourself to save for the future is admirable but vague. On the other hand, making a written pledge to stock away $2,000 for your vacation to Cancun next summer is likely to get you there.
4. Have your boss (or your bank) save for you by taking money off the top of your check for retirement or some other goal. You won’t miss it.
5. Set up an account for each goal — retirement, vacation, car, new computer — so that you can track your progress.
This also works for large recurring expenses, such as insurance premiums.
6. Deposit your paycheck into your savings account. You’ll think twice before you take out money.
Just be careful not to exceed the number of cash transfers you’re permitted in your account. But that, too, is an incentive to save.
7. Subtract your credit purchases from checking right away so that you’re not surprised when you get the bill.
8. Toss spare change into a glass jar on your dresser and watch your money grow.
9. Give yourself an instant reward: Each time you pass up that latte, toss the money in your cash jar.
Saving becomes less of a chore if you can see the fruits of your labors.
10. After you pay off a loan or credit-card bill, keep writing the check and send it to a savings or investment account.
Once you’ve built up the momentum, it’s easy to keep going.