Good money management is a mental exercise in self-regulation and focusing on the long-term goal, even when you're sure you just can't go on another day without buying that Kindle or MacBook. Even the most uber-organised and priority-minded people can stumble when it comes to money—how to save more of it, how to stop spending it, and how to keep doing both over and over again. While every person's financial needs are different, anyone can set up simple systems to help themselves stop buying what they don't need and almost automatically save money they'll need later. Let's take a look at 10 ways you can cut costs and do right by your money without much effort, after the jump. Photo by Darren Hester.
10. Save for big buys with "Reverse Credit."
Similar to the classic "envelope" method, but designed for modern conveniences. Got your eye on a shiny new MacBook? Buy yourself Apple store gift cards as you manage to put aside money, ensuring you don't spend the money frivolously and that you've really got the money to spend. You'll want to make sure your cards don't expire before you hit the savings mark, but it's a pretty solid way to ensure you honestly earn your big purchases. But, as our commenters noted when we first posted this, a sub-account through your bank, or a rechargeable gift-style debit card, might be better options for earning interest or avoiding vendor lock-in. Photo by Tomeppy. (Original post).
9. Sleeve your credit card with what you really want.
Personal finance blogger and crusader against needless debt Trent taped pictures of his son around his primary credit card to make him think before making a purchase, and it worked. Create your own sleeve out of two card-sized pictures, and modify the motivation—whether it's a positive (something you're saving for) or negative (reminder of the debt you're paying off)—and you'll likely curb some auto-pilot spending. (Original post).
8. Set up a waiting rule for flashy purchases.
Nearly everyone knows what next-day regret feels like—at least when it comes to big purchases. To sift the real needs from the impulse buys, get into the habit of using a system like the Get Rich Slowly blog's 30-day rule, where you write down each thing you want to buy and you don't look at it again till 30 days later, or the $100 rule, in which you enforce a one day wait for every $100 you plan on spending on some non-essential gear (scaling that increment when necessary). You wouldn't use these for homes, cars, or appliances, but they'll prove that sometimes just living your life for awhile helps you remember how unnecessary most must-haves truly are to it.
7. Round up purchases, bank the change.
Spare change jars have been a passive saving technique since change was first offered, but fewer and fewer transactions these days use real cash. If you're one of those responsible types who balances a checkbook, you can try writing every purchase to the next dollar to create an invisible buffer in your account. More likely, though, you do your banking online and can't trick yourself that easily. Got your own round-up saving method? Share it in the comments below.
6. Freeze your credit card for serious spending stoppage.
If you had to wait for a block of ice to melt every time you wanted to treat yourself to the next season of your favourite show on DVD, would you re-consider watching it online, or just waiting for reruns? That's the idea. As Consumerist points out, you'd ruin your credit card if you tried to defrost it in the microwave, so you really will have to sit alone with your second-thoughts. Recommended for serious shopping addicts who still need a credit card around for vital purchases.
5. Always bank your savings and discounts.
It feels like free money when you hit an unexpected sale, discover a little-known rebate, or simply use a valuable coupon. Why not turn that free money into even more free money? As the Digerati Life blog points out, it's money that's easy to set aside, since you didn't expect to have it, and it doesn't require any budget reviews. It also protects that little boost from disappearing into another full-price purchase while you're out shopping (Original post).
4. Use a high-interest online account to motivate yourself.
To paraphrase Gordon Gekko, greed, for lack of a better word, is a great motivator to get things done. If you're putting money away into a higher-interest, online-only savings account, find out where it tells you how much interest you've earned for the year and keep it in front of your eyes. Doing so is a great motivation to stash more cash in there—think of it as a kind of progress bar until your next financial Level Up.
3. Let Firefox find your deals for you.
If you've got money to spend, you can stretch it pretty far by knowing (or just stumbling across) some great online deals. Like most savings tools, however, you have to go out of your way to take the time and remember to grab those deals. Luckily, the Firefox browser and a few extensions make it hard not to find coupons, rebates, and killer deals. RetailMeNot automatically pops in to let you know when a site you're at has freebies and discounts available, while PriceDrop adds buttons to Amazon.com's item pages to help you get notifications when prices go down.
2. Defer dumb purchases with a "Crap I Just Don't Need" list.
This isn't so much self-trickery as self-realisation, but it's a great way to see how fleeting and utterly unnecessary most of our Must. Have. Now. urges are. Every time you feel the need to buy something that's not a real necessity, write it down on a list (pocket notebook, PDA, wiki, or wherever). Eventually, you'll start noticing how long the list is, and how well you've gotten along without any of it. Bonus: Making a pseudo-wi sh list of your consumerist desires can help you get them out of your system. This aversion therapy hack comes from Merlin Mann, who notes that it doesn't cost a thing to try out. Photo by .Gladius.
1. Set up an Automatic Savings Plan for set-it-and-forget-it saving.
As shown above, you can play all kinds of mental games with yourself to keep your worst impulses away from your money, but the real meta-hack is to have the right amount of money earned moved auto-magically into a savings account, or a "buffer" account for unexpected costs, or investments—anywhere but your walking-around stash. Gina's walked us through automating your finances in thorough fashion, and The Simple Dollar has also posted a front-to-back demonstration using ING Direct. If you're not using a bank that offers easy tools for automation, you might want to rethink where you keep your money.
Everyone's mind works a little differently, of course, so our crafty commenters will probably have a few mental overrides of their own to cut useless spending and shuttle away more savings. Let's hear about them—how do you keep your money away from your irresponsible alter-ego? What tech or real-world tools do you use to keep your money in its place? Let's hear about it all in the comments.