Money Tricks That Can Help You Increase Savings by 20%
In today’s economy with the tight pockets and the unending temptation to spend on the ever-present sales and discount offers, gives us little or no chance of saving more than we should. Whether you have an air miles credit card or a credit card for shopping, there are plenty of ways to reduce expenditure and save money when you use plastic to pay.
However, we haven’t yet reached an era where every single money transaction can be swiped or tapped for reward points or discounts. A significant portion of our daily spending needs to be transacted in cash.
Don’t despair yet, using cash doesn’t mean you can’t squeeze in that extra saving. Here are 4 monetary tricks that can save you money.
1. Carry Large Bills With You.
Let’s start off with a peculiar method. To spend less, try to carry more money with you in your wallet, weird right? I agree It doesn’t seem to make much sense, but hold on your horses. This only works if only you’re carrying notes of a high value. This provokes a cognitive bias called the Denominational Effect, which brings the sense of when using large bills we are spending a lot hence we restrain ourselves.
Studies by researchers on this phenomenon have shown that participants tend to spend the money more if it was handed to them in smaller denominations. But, if the entire amount was given in large denominational notes, they were less willing to spend the money because they felt it was too much to spend.
Interestingly enough, those who chose to break up their large bills were noted to spend much more in overall in comparison to who were given notes of smaller value
The denominational effect shows that we tend to undervalue smaller denominational notes.This effect shows that we tend to overvalue large bills and undervalue smaller ones, which could explain the results of the study
So if you’ve been struggling to control your spending, leave those S$5 and S$10 and start carrying with you S$100 notes and see if you’ll increase your savings.
2. Loose Change
Amazing how you can save up to 15% of your daily expenditure without even flinching. Interesting huh? You ask how? Easy, This is by collecting and saving up the loose change you have at the end of the day. I recommend a piggy bank for this. Quick and easy to slot in those coins but a nightmare to retrieve them.
Let’s say you bought lunch of S$8.50 with a S$10 note. Your balance is S$1.50 in coins. What will you do with it? I bet you’ll spend it on something quite unnecessary so as to get rid of this noise making coins in your pocket.
It’s not much I agree but it’s 15% of the S$10 that you spent earlier for lunch, Let’s say that you are able to save it for 6 days, it will sum up to S$9, this is lunch for you on the seventh day. How about you save it for say six months, that’s more than S$200.
Don’t just limit yourself to lunch, even after grocery shopping and such. How much you can save on this is in amazing figures.
The point here is not to be stingy rather, trying to adopt a culture of saving the little coins you remain with at the end of the day.
This is not much of a saving daily and having less in the wallet will definitely make you adjust on your spending.
3. Stop Spending A particular denomination
Ever noticed that there is that one note that is always in your wallet say a S$5 note. It frequents your wallet more than any other note. You can use this new found love by the note to your advantage and restrict yourself from using it and just throw it in that piggy bank of yours.
But then again the S$5 is not exactly a negligible amount that you can have the luxury of not using it, and then again if it’s always in your wallet means that it’s in your budget, right? It might leave you broke and facing it tough.
You can try to make it work for you by resolving to save all S$5 notes that you have on a certain day. You can decide that every other Tuesday or Monday, whichever day is convenient that you’ll be putting them aside
With such a system in place, you have the freedom and flexibility to choose whether to spend the S$5 note or put them in the piggy bank and bank them later.
4. Lump sum withdrawal
Do you have your ATM card with you now? 90% of you do and probably have used it today or are thinking of using it. Like most people, you probably withdraw from the ATM as and when you run out of cash. This habit that most of us have can cause you to lose control of your budget even more if you don’t keep track of your spending.
How about you limit your visits to the ATM to around one or two a week for starters and see how it goes? First, know how much you spend in a week, then get to know when you need more money probably during the weekend or at the beginning of the week. Having those variables in place pick a day that will be your ‘draw days’. This will help you build up your financial discipline.
You’ll get to even save the ‘little’ withdrawal fees that are charged. Once you’ve managed that for a while go for a bigger challenge and try withdrawing for a whole month, with this you can literally see how much of your budget you have left over. With this you’ll have to start avoiding carrying your ATM card and find a place to stash it, this will help you in practicing and restraining your visits to the Teller machine. It’s quite an effective method, though you’ll have to find a secure place to keep your money if it’s for the whole month. This are just a few of the non-told tips on how to help you save some more cash, and also help you in your financial discipline and management.
Savings is not an easy chore as it requires a lot of self discipline. But it is essential in your life as money is really important especially in times of emergency, contact Licensed Moneylender for financial assistance.