The following is a guest post from No Debt MBA, who has saved and is working to get an MBA from a top business school debt-free.
I going to brag a little here. I’m pretty good at saving money and living frugally. I may not be a poster child for Squirreling Gone Wild, but each year I tuck away a tidy sum, I’m debt free and I’m on track to pay for my MBA in cash. Okay, bragging aside, I have a few tricks to help you pad your savings with less pain. Remember, your savings won’t benefit from these tips unless you actually follow through with them and do it. So here are some strategies to put more money away:
- Do it automatically – Everyone’s been talking about it for years. You know why you should be doing it, but are you actually following through?
- Do it in lump sums – Let’s be honest, it takes a lot of $25 automatic monthly transfers to add up to anything like $5000. (Think more than 16 years) It pays to bring out the big guns and tuck away lump sums.
- Do it before you see it – That pre-tax 401k, FSA, or HSA your employer offers? It can be savings godsend, allowing you to squirrel away thousands or even tens of thousands of dollars before it even hits your accounts. Start this immediately and keep ramping it up – you’ll hardly even notice it.
- Do it with change – Our very large coin jar recently got cashed in. After the hefty labor of carrying it to the bank we found we’d saved $250. The change became bills which will be put in the bottom of the jar and we’ll begin filling it with coins again. When it’s filled with bills…. that’ll be a nice day.
- Do it with found money – Yard sales, change found on the ground, bonuses and more – unexpected money should help you beef up your savings a little or a lot at once. Since it’s not in your budget there’s no reason not to save it, right?
- Do it with purpose – By giving your money a cause it’s a lot harder to cheat – you’d be robbing the cause you selected for more discretionary money. Our coin jar has a cause – spending more time together through vacations or downshifting. Any time I take quarters out for laundry I pay the jar back with dollars. Otherwise I’d be saying that a convenient source of quarters was more important than spending time with my SO. Named, separate savings accounts are another way to do this. It’s a lot harder to take money out of the bank when it’s labeled little Janey’s college fund or Christmas gift money.
- Do it with leftovers – If you already have a budget challenge yourself to slash one area of it for a month and put the rest towards a savings goal. If you don’t have a budget, try one for a month and save the difference over what you normally spend in a month. I’m channeling all the savings from our $25 a week grocery budget towards next year’s tuition for my MBA.
My Questions for You:
What are your best strategies for saving a little extra money?
Which of your goals could use some extra cash?