MONEY
6 Sneaky Ways to Save More Cash
It’ s hard to force yourself to sock away money when it’ s much more fun to spend it right friggin now. Train your brain to boost that bank account with these effortless tips.
BY KATE ROCKWOOD
Enlist a Pickpocket
If hoarding money feels boring, save it before you see it. Send part of your pay to savings before it hits your checking account, and if possible, ask that half of any raise go to your 401( k).“ You won’ t feel the loss of a smaller paycheck, because you never had it to begin with,” says Douglas Hough, PhD, an economist at the Johns Hopkins Bloomberg School of Public Health. If you are paid in cash, set a monthly auto-transfer from checking to savings. Or download Digit, an app that notes your spending habits and then siphons small amounts of money into the app’ s savings account.
Carry a Savings Charm
Ads, e-mail promos, store signs: You’ re bombarded by cues to spend but rarely to save. Try creating your own savings prompt. When participants in a Duke University study kept a gold coin as a reminder to save, they put away more than twice as much as those who didn’ t. In another study, specific goal reminders( like“$ 800 for tuition by April”) were twice as effective as generic ones. Carry a written goal in your wallet to keep it in mind.
Pay for Small Stuff in Cash
Pay with cash and you’ ll spend less. Swipe a card and you’ ll indulge more. Tap your phone and you may be most likely to go wild. Electronic payments erase the pain of paying, says Dan Ariely, PhD, a professor of psychology and behavioral economics at Duke University.“ When we pay with cash, we can see the money leaving and are fully aware that we’ ll have less to spend on other things.” Going all-cash might help, but it’ s inconvenient. So pay the old-fashioned way when your purchase is less than $ 20.
Clear Your Wallet
You’ re less likely to break a big bill, a study in the Journal of Consumer Research found. Fatten up your savings by feeding leftover singles and $ 5 bills into a piggy bank each night. Then keep $ 20s on hand to slow your spending.
Make Shopping Harder
Storing your payment info online makes checkout a breeze, which is the problem.“ Anything that creates more friction gives you time to second-guess a purchase,” says Grant Donnelly, who researches financial decision making at Harvard Business School. To curb a bad online habit, delete your cards from your favorite sites so you have to type in the numbers manually when you shop.
Lower Those Expectations
Falling short of your monthly savings goal? Cut it in half.“ People get overly ambitious at the start of the month, then nibble away at their savings and end with nothing,” says Katie Waters, the founder of Stable Waters Financial. Ease up on yourself, then step away from the stash.
GETTY IMAGES
124 _ COSMOPOLITAN _ JANUARY 2017