Why is that when people start the discussion about saving more money, their first inclination is to put up barriers as to why they can’t save? It seems as if the more time we have to think about saving, the more time we have to talk ourselves out of it. Yes, life is expensive. But that should be even more of a reason, to start saving more. After all the expenses, sometimes finding the money can be tricky. But here are a handful of ways to trick yourself into saving more.

Sometimes it’s easier to save big

Research suggests that people may spend small bills more freely than large bills. And when I think about it. It’s often the case for me. I have had a $50 bill in my wallet for months now. I feel bad about breaking a $50. But in the meantime, $5, $10, and to a lesser extent, $20 bills, have come and gone. Of course you could forego using cash altogether, but that opens up a whole other can of worms.

Getting credit for using cash

As many already know, there’s a lot of evidence that points to consumers spending more money when paying with credit cards than when paying with cash. But by how much? Well, in one study by Drazen Prelec and Duncan Simester, randomly selected participants were told they would be offered the opportunity to purchase sold-out tickets to an upcoming pro basketball game. One group had to pay in cash, the other by credit card, and were then asked how much they would be willing to pay for the tickets. Those who were told they would have to pay by credit card were willing to pay over twice as much on average, as those who were told that they would have to pay by cash. Sometimes it pays to leave your credit card at home. Especially for larger purchases, cash is still king when it comes to bargaining.

Round up your spending and bank the rest

If you’re already using cash to pay for your purchases, carry bills and toss the change into your piggy bank. Or every time you make a purchase, round up to the nearest dollar or nearest five and deposit the difference into your savings account. So if you spent $18.98, throw an extra $1.02 into the piggy jar. Some debit cards now allow you to round up your spending. The only debit card that I’m aware of in Canada that does this, is the Scotiabank Bank The Rest savings program, where they automatically deposit the difference into a savings account.

Automate your savings

Whatever your goal, the simplest and by far, the most rewarding trick in the book is to automate your savings. Set aside a certain amount to be deducted from every paycheque to go towards saving for an upcoming vacation, child’s education, retirement, or whatever it may be. But unless you make it automatic, you’re relying on your memory and your motivation to save. And even in my case, that’s not a good thing.

You can set up a savings account at a small bank, virtual bank or a credit union that offers no ATM machine near you and where you do not have a checking account. This will force you to think about taking money away from your savings. I have my short-term savings going into an ING (now Tangerine) account. It has limited branches and ATMs around. And while I still can transfer freely among my online accounts, it still takes a couple days for transfers to appear. So it takes a bit a planning. Who knew hassles could be a good thing?

Bank your raises

If you get an increase in salary or wages, and just leave it in your checking account, some other expense will soon take it over. Instead live like you’re living now and bank your increases in a separate savings account. Even a paltry 2 or 3 percent raise might not seem like much now and on each paycheque. But at the end of the year, you’ll probably earn a healthy sum you can put towards an emergency fund, add to your retirement funds, or put towards that trip that you’ve always wanted.

Turn habits into dollars

Smoking, drinking, or expensive hobbies, you get the point. They all add up. Some habits/hobbies are more difficult to bury than others. But cutting back even one cigarette a day, one drink a week, or limiting your hobby spending can put a few more dollars in your pocket. Just save the extra savings, and in this case, what’s good for your wallet is also good for your health.

Snowballing your savings

Once you’ve paid off a debt, car loan, student loan, what have you, continuing making those payments – except this time – to your savings account. And watch as your previous debt payments snowball into savings rewards.

How about negative incentives?

Sites like StickK have popped up to help you track your goals. Except it’s a goal-tracker, with a bit of a twist or shall we say, penalty kick? You set what your goal is (i.e. to lose 30 lbs or pay off $1,000 in debt) and a time limit (i.e. in one month, one year, etc.) But if you fail to meet your goals you can StickK penalize you. For example, you can have it deduct $10 from your credit card, every week that you miss your goal, or some people are penalizing themselves by having it donate to an organization, political party or corporation that they really hate, if they fail. That way they’re motivated to keep on track of their goal. This is probably one of the most unorthodox ways I’ve heard of motivating you to save money. But, hey, whatever works.

As you can see, there are countless ways you can trick yourself to save, when the motivation just isn’t there. Longer-term savings take a lot more discipline, but that’s why it’s always important to give yourself little rewards along the way. Make saving fun, and the money will follow.

What methods or motivations do you use to save?

Copyright: voronin76 / 123RF Stock Photo

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