Tricking Yourself Into Saving

While trying to find an article in the Twin Cities Pioneer Press archive, I found a letter from one of their readers who had a unique way of tricking herself into saving money. Whenever she writes a check, she rounds it up in the check register. When she deposits a check, she rounds it down. At the end of the year she finds she has a cache of "ghost money" that she uses to buy new shoes, go to the movies, make donations and do home improvement projects. Depending on how you look at it, this is either the dumbest savings method ever, or an incredibly smart one.

The columnist this person wrote weighed in heavily on the side of the former. She guessed that the reader never balanced their checkbook and if the bank ever made an error, the reader would have no way of knowing if they were out money. " Instead of using this complicated system, why don't you determine a set amount you will have transferred automatically to your savings account each month," wrote the reporter. "Then, keep an accurate record of each withdrawal and deposit in your checking account. I'm afraid your game of hide-and-seek, though entertaining, is costing more money than you know."

Good point. That gives you a lot more control over your money and lets you know exactly how much you have at all times. You know how much you're going to save each month. If you were to choose methods, I would say go with this one.

But even though it lives in spreadsheets and computers and numbers, money is very emotional. You have to put in hours of your life to get it and confront your needs, desires and dreams when it comes to spending it. Some people can make a cool calculation and just flip the necessary switches on their online bank account and within their lives. Not everyone can do that, though.

At the end of the day, what matters most is that she has found a way to do what many Americans find themselves incapable of: saving money. If this is the only way for her to get there, then more power to her.

from the Consumerist