There’s a woman who saves every $5 bill she gets, blogs Get Rich Slowly. She’s been doing so for three years and has saved $12,000.
JD at Get Rich Slowly also shares his wife’s personal money saving trick:
For several years, Kris has been rounding every transaction up to the next dollar in her checkbook. If she spends $49.74 at the grocery store, she enters this in her checkbook as $50. If she spends $33.13 on gas, she enters it as $34. As a result, she saves an average of 50 cents every time she performs a transaction. In 2-1/2 years, Kris saved an extra $500 using this method. That’s enough to treat herself to something nice.
There are many different tricks people use to save money — from the very low-tech “saving change in a jar” to the bit more sophisticated “automatic payroll deduction.” The key seems to be in finding something that works for the specific individual — something he can stick with over the long haul. As long as the saver remains committed to the trick, almost any method seems destined to succeed.
Do you have any unusual ways you trick yourself into saving money?
Turning $5 into Thousands [Get Rich Slowly]
(Photo: bethography)
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Hey, this is a good idea. You could sock away every five spot you get and maybe add in an Andrew Jackson every couple of months or so.
As others mentioned, Bank of America’s Keep the Change program does just what the woman with the check register does. It adds up to about $9 a month for me, on average, which isn’t a lot but is still money I’m not spending.
Every payday, I look at my bank account balance first thing in the morning (online). Whatever’s in there is the combination of whatever I had before, plus whatever my pay was after deductions. I round it off to the lowest $100 and put the difference in my savings account. So, to make up random numbers: if I had $312.42 and got paid $1309.14, then that’s $1621.56 I’d have come payday morning, and $21.56 would go immediately into savings.
Some pay weeks (my current job is every other week; my previous job was twice monthly) that might only be ten bucks, but other weeks it’s almost a hundred so it evens out pretty well. At a minimum saving that way would still give me $20 / month but some months it’s more like $200.
I too use BoA’s Keep The Change Program. I hedged it by voluntarily matching the amount saved with it monthly. After about two years of doing this (since I joined), I bought myself a PS3.
@cubensis: I’m just saying retiring on $4 mill isn’t necessarily an accomplishment, depending on the circumstances.
I see several people praise the BoA “Keep the Change” program. The first thing that came to my mind when I saw the program on TV was what happens when the transfer of change to the savings account causes an overdraft on your checking account? Does BoA still process the transaction pushing $0.37 to your savings account and then charging you a $20 overdraft fee because you are $0.25 overdrawn?
My technique is assuming tax and such costs way more than it needs to, save for foodstuffs.
Especially if I DON’T factor in my 10% Safeway discount, I save up to $10-50 depending on the size of the order.
Works wonders, and makes me think of how much mileage I can get out of each product.
This story makes no sense. $12,000 in $5 increments yields 2.7 $5 bills per day on average. What was she doing, working a cash register? I can put away the approx. $300 per month way easier than I can generate 2-3 $5 bills on a daily basis!
Get rich by saving money.
What an amazing concept.
Thanks Consumerist!
@Rachacha: No, actually, they factor this in. If your purchase would overdraft (my card still has a $1000 line of credit attached from way back in 1999 when I set up the account, so I never overdraft, I just get an automatic transfer of funds) then it pops up online as “Keep the Change $0.37 canceled low funds.” So in other words, yes the account automatically generates the transfer, but it also automatically cancels, too. I was worried about that same thing when I first enrolled in ’06.
@RayDelMundo: I think you’re are missing the point. As several commentors have pointed out, there’s a strategy to saving money.
Everyone is different, take cash as an example. If you have 2 people that carry cash, one person might spend less because when they spend cash they realize what they’re spending is actual money rather than plastic where it just comes out of a deferred account. While the other person might spend more because when they spend cash they don’t track the spending like a credit card automatically does.
For these 2 people it comes down to whether they respond to immediate feedback more, or consistent tracking more. Thus “Get rich by saving money” takes on a different strategy. The revelation isn’t that you need to save, it’s how you go about doing it.
Like investment, it’s easy to scoff at someone who has legitimate advice like “Buy low, sell high” but pithy remarks like “What an amazing concept” do the remarker a disservice, making them seem like completely idiots who jumped the shark. How do you tell what’s low and how do you tell what’s high?
For me, I save by having a monthly withdrawal, and having a budget based on what’s left, not what I start with. But I also had to make the realization that I need to buy the occasional big ticket item (laptop/technology or something) that would ruin me for a month if I didn’t know it was coming. The strategy that works for me is I put $1000/month in ING (or choose your high interest savings of choice) and then I get $150/month that I put away so that on my birthday every year I can buy myself something really nice. I don’t buy lunches, I don’t have latte’s, I occasionally eat out with my wife but that’s another budget item. So about once a year I blow $400-$1500 on a toy. Doing this we’ve got a good enough downpayment ready to go for when the market drops, maybe 2 or 3 years from now. (Vancouver hasn’t hit the drop yet, but I think it’ll be hard and long when it happens) or alternatively maybe move to San Diego….
@Youthier: “…but I no longer use cash or a checkbook.”
Wow, then you are the model consumer for the cashless economy of paper-trail purchase tracking, clandestine surveillance and control where digitized money has absolutely no true value at all and everything you own is on a database. Just like “they” want it to be.
So then if you go to say,.. a war protest, (or whatever) the powers that be can freeze your accounts. I suggest you get an RFID chip embedded in your arm with your ATM info to make it easier for you, and them.
As you can guess, I am your polar opposite and only pay CASH on a daily basis.
Aside from having money direct deposited directly to my savings account, I like to save money another way. Every time I go to the grocery store, I take a look at my receipt to see how much money I saved with sales and coupons. Then I take that amount and transfer it right to my car loan.
Kind of off-topic, but I figure I’ll put this out there since so many people have mentioned ING in their comments… can anyone recommend a good high interest savings account or at least tell me why ING is so much better than the rest?
Since I don’t currently have much of anything saved up, I’m preferably looking for a place to put my money that doesn’t require a minimum balance and won’t charge a lot of fees. Otherwise, online account management and being able to automatically transfer money from my checking account are my two main must-haves. I’ve been looking into this and sadly, it seems like the rates have really gone downhill, though opening an account with ING or HSBC would definitely be better than using the same bank where I have my checking account.
Any advice is appreciated.
ING doesn’t have any service charges – ever. I’ve been with them for going on 5 years, and not a single penny has been taken in service charges. I’m fortunate to live in a country where ING is an actual bank, not just a high-interest savings-account place.
As for saving, usually the change-in-a-spaghetti-sauce-jar does the trick: been doing that since I was 15. The benefits are two-fold. One, I get rid of useless coins (1c, 2c, 5c and 10c), and two, I save!
@atrixe: IMO ING used to be ‘better than the rest’ last year before the Fed dropped rates. Now ING is similar in rates to other banks. You’re describing exactly what ING is in your 2nd paragraph.
For anyone looking for a better rate on savings: I’ve found a bank through bankrate.com called OnBank. It’s a division of M&T Bank, and severely limited when compared to ING Direct (only has 2 accounts: a 60mo CD 5.15% APY, and a MM savings 3.50 APY) but their Money Market is higher than what I’m getting with ING. No fees or anything, check it out: OnBank
@DocShiv: I do that with an old Nantucket Nectars bottle. Every time I add change to the bottle, I write it down by denomination, and when I have enough to roll it up, I do that. Since I pay for almost everything by debit card, I haven’t really saved as much as others, but I’ve got about $91 rolled already, with about $10 more in the bottle, in about nine months.
That’s all earmarked towards savings, along with money I make from eBay, half.com, etc. Already topped $1000 between those, which helped me make the down payment on a car and pay for a trip to Vegas (the tax refund and stimulus check kind of helped more, but still).
I have a few tricks for saving cash. First I limit how much I spend on food. Yeah a $7 meal sounds great…but 2 $1 jumbo jacks with water saves me $5.
Every day I throw my change into a bin and let that add up, a few months or weeks later I count it and bring it to the bank.
I used to keep envelopes in a drawer and separate money into different ones that had a name on each. I was able to purchase the camera I wanted eventually without feeling a hit to my wallet.
My latest tricks, as I am a VERY bad at impulse shopping are these:
#I let myself pick up whatever I think I need or really want. I walk around for a bit with everything…then as I make my second run through the store I re-examine what I want to buy, and put back everything I don’t really need..
#When I see something in a store that I want I take a picture with my camera phone. I tell myself if I really want/need it I can check the price on amazon/ebay. I make myself go through quite a bit of research before making a purchase so I give up half way and say forget it.
@Subliminal0182: No monthly fees, or no fees whatsoever? I was about to go with ING, but now I’m considering HSBC Direct and Onbank
I am currently doing something very similar to imsomeguy. I found that I was spending a lot of money each week going out to lunch. I figured I was spending about $5-$7 everyday. So now I have an envelope set aside, and everytime I bring a lunch from home, I put $5 into that envelope. I’ve been doing it for about 3 months, and I’ve already saved $170, plus I’m eating much healthier, so it’s like killing two birds with one stone.
I think the key for this method to work is to be saving for something you really want because it gives you a lot more incentive (such as a new TV or gas grill versus a car repair or root canal).
I used to save my $1′s but then all hell broke lose and I had to stop.
Losing a job will do that.
Here are my tricks, which mostly involve just spending less. First, I do most of my shopping by Internet, and I put everything on my Discover or Amex cards to get the cash back (I always pay the whole bill each month, so never pay fees). And also, if I want something, I make myself wait until my credit card closes at the end of the month, which gives me time to find the cheapest price and also to make sure I really want it. Like Imsomeguy, half the time, I give up or plain forget about it – saving me tons of money on crap I don’t need.
I’m not exactly sure how this helps in savings w/o actually changing your lifestyle or what you by (maybe someone can explain)
Sure out of sight, out of mind may work and you may be saving up a bunch of $5. But if you always get that Starbucks coffee everyday, instead of paying with a $5 bill, you’d end up paying with a $10 or $20, and you ultimately end up spending the same amount of money.
So where exactly is the extra money coming from? If the extra money has always been around, where was it going before?