Saving money isn’t easy, especially around this time of year. But one of my favorite hacks to effortlessly save more is to create a “spend to save” rule. Every time you “save” money with a coupon or discount, actually save that money.
For example, let’s say you get a sweet discount on a PlayStation 4. It’s usually $299; you get it for $249. You saved fifty bucks, which is great, but here’s what usually happens: you get a coupon high. You do some quick mental math, you subtly convince yourself you have a credit of $50 in your budget, and you spend that fifty bucks on a pair of shoes you wouldn’t have otherwise purchased. Coupon highs are trippy, man.
To combat this, sock that money away before you have a chance to spend it. Whether you’re spending on groceries, Christmas gifts, or even the occasional toy for yourself, establishing your own “spend to save” rule can help you actually save the money you “save.”
Profit from Your Savings
Instead of thinking of a discount as free money to buy something else, think of it as a profit. How can this discount help your financial bottom line? One way to do this is to actually save the “amount saved” at the bottom of your grocery receipt. Daily Finance’s Hank Coleman explains:
My mother-in-law and father-in-law have a great system for their grocery loyalty cards. They take the amount listed on the bottom of their receipt that they saved with their loyalty card, and they put that in the savings account or piggy bank.
It’s money that you would’ve spent anyway if you had been shopping without your loyalty card. And it is a fast way to build up your savings without even realizing that you’re doing so.
You don’t have to limit this to your grocery receipt, either. Plenty of other stores include some kind of “total savings” at the bottom of receipts. You went to Bed, Bath & Beyond and used one of their infamous 20% off coupons? Awesome. Now transfer that amount from your checking to your savings.
It works for online shopping, too. When you buy something online at a discount, take note of the original price, then save the difference. If you actually save your “savings” throughout the year, chances are, you’ll have a nice little cushion when everything is said and done. And it was likely money you were going to spend anyway, so you won’t even miss it.
Granted, it might be hard to save that much when you’re buying a lot of stuff at once–the holidays, for example. All of the savings from those gifts can add up, and your budget is likely stretched thin around this time of year. But if you’re up for the challenge, it just means more money in your pocket.
A Better Way to “Treat Yo Self”
One tip I’ve come across for keeping your sanity around the holidays is to “treat yo self.” For every ten gifts you buy, one article suggested, buy one gift for yourself. Great tip for sanity, but not so great for an already thin budget.
Why not save your splurge instead and treat yo Future Self? Instead of buying yourself a Christmas gift, give yourself the gift of saving money. For every $100 you spend on gifts, save $10. Again, hard to do around this time of year, but that’s kind of the point. You’re safeguarding yourself from holiday overspending, and you’re encouraging yourself to save. It’s a win-win, and it’s a lot better than the usual holiday spending plan: max out your credit cards and pay them off later.
If you insist on a splurge, consider saving the same amount of the splurge. You want to gift yourself with a fancy $20 scented candle so your home can smell like applewood, whatever that is? Cool, but put $20 in your savings account, too.
Obviously, you don’t want to overspend on stuff you can’t afford, but in general, spending is inevitable. Broke as you may be, at some point, you have to buy groceries. And if you’re not broke, and you’re meeting your savings goals and on track for your retirement, what’s so bad about spending your money, anyway? It’s easy to just tell yourself not to spend so much, but in practice, it rarely works out that well. Rules, habits, and systems do. Setting up a few savings rules for your spending can be surprisingly helpful. You either second guess your purchases, which is a good thing, or you beef up your savings. Also a good thing.