Last week, we were reading an amazing article in Redbook magazine all about “growing your money like magic.” And it totally inspired us. If you’re anything like us, financial advice tends to go in one ear and out the other (because you just need that handbag and will take out of your savings to get it!), but this article actually made sense. This advice, from Lisa Freedman, is a little bit more creative and clever – unlike the commonly heard, “start using coupons” or “make a budget” – these tips are probably something you’ve never heard of before and definitely sound doable! Here are a few of our favorite money saving tips!
Tip No. 1: The 52-week challenge (via Redbook)
This one is more difficult than the others, but if you save an extra dollar every week for one year, you end up with $1,378 by the end of the year, which sounds AWESOME. For the first week you add $1 to savings, the second week $2, the nineteenth week $19, etc., etc. It gets hard at the end of the challenge when you have to add $49, $50, $51, and $52, which adds up to more than $200 in one month. But Crystal Paine, the founder of savingmom.com, suggests doing the plan in reverse, that way, the challenge gets easier as the year goes on.
Tip No. 2: For every item you buy on sale, put the difference of the full price item and the marked down item into your savings, IMMEDIATELY (via Redbook)
True story: I bought a $358 Michael Kors purse for $140. Obviously, I was excited, happy, and proud of my purchase because I “saved” $200. But where did that $200 go? Probably toward some Essie nail polish, a bottle of hairspray, a blazer, and any other random item I’ve purchased since then. Gail Cunningham, chief spokesperson for the National Foundation for Credit Counseling says, “Savings isn’t really savings until it’s in your pocket.” What I should have done was put at least a portion of my purse savings into my savings account immediately. If you can’t afford to transfer the entire savings amount, at least add a portion – it makes you more mindful of your spending!
Tip No. 3 Live like you didn’t get a raise (via Redbook)
Getting a raise is SO exciting. The first thing I think when I get a raise is, “OMG I need to buy myself a present.” Those are habits that I’m trying to break because I’m not 19 years old, I have actual bills to pay, and I just don’t need to be buying myself presents anymore. So according to my trusty Redbook article, when you get a raise, pretend you didn’t. Put your extra money in savings and continue to live on your regular paycheck!
Tip No. 4 Pay yourself first (via Domaine Home)
Most people save whatever they can come up with at the end of the month. The smart thing to do is schedule an automatic payment straight to your savings at the beginning of the month. I love this advice. If I’m going to save, I want to get it over with at the beginning of the month and not have it hanging over my head!
Tip No. 5 Stop spending $5 bills (via Redbook)
Instead of saving a jar full of change, stash your $5 bills somewhere safe because those babies will add up!