Saving money isn’t fun. It’s not something your brain wants to do.
So if you want to develop good financial habits, you’re going to have to trick it.
Thankfully, I’ve got a lot of experience at tricking myself into making better money decisions — I’m only human, after all! — and I’m here to share some of my best ideas with you.
Here are 15 psychological tricks you can use to save more money.
1. Calm Your Mind
The first step in securing your finances? Securing your finances.
Before doing anything else, give yourself peace of mind by safeguarding your personal and financial information from identity thieves.
To do so, shred documents before discarding them, and check your bills carefully each month.
You can also sign up for a credit-monitoring service. True Identity, for example, is totally free — and if someone tries to apply for credit in your name, it’ll alert you by email, text or phone.
By feeling confident your information is secure, you’ll be able to let your brain focus on the issues that really matter.
2. Imagine Your Future (Richer) Self
Sure, spending that $2 right now doesn’t seem like a big deal. But what if I told you that $2 could turn into more than $60 by the time you retire? You might change your mind, right?
Thanks to the incredible power of compounding, saving just $2 a day could leave you with enough money to retire. So the next time you’re tempted to drop $2 on something frivolous, picture three $20 bills instead.
… And, while you’re at it, picture yourself as a silver-haired socialite playing golf or lying on the beach or doing whatever it is rich old people do.
3. Earn Some Free Money
Most banks suck. They charge you maintenance fees and monthly minimums — and then give you next to no interest in return. If that doesn’t take a toll on your psyche, I don’t know what would.
So make a change and try a different kind of bank. Aspiration, which is only online, has free checking accounts with no minimums and no fees.
More importantly, it offers 1% interest — which is nearly 100 times that of many traditional brick and mortars.
Earning interest (or, as we like to call it, free money) each year is a fabulous psychological incentive. Those little rewards will light up your brain like a Christmas tree — and encourage you to keep saving.
4. Stop, Drop and Wait…
“Let me sleep on it” is one of my favorite phrases. I’ve avoided a lot of sticky situations by waiting to make a decision until the next day. And that wisdom definitely holds up for financial decisions, too.
When you’re swept up in the heat of the moment (or the bargain hunting), every deal can seem like it’s too good to pass up.
So create a mandatory waiting period for new purchases. Some experts advise a timeline of 30 days, while others say you should wait one day for every $100 in price.
By forcing yourself to take a step back, you’ll prevent a lot of impulse purchases.
5. Don’t Trust Yourself
Although I’m all for trusting yourself in most areas of life, it can backfire when it comes to money. Why? Because we’re human, and we want we want — and often that leads to not saving.
For that reason, I suggest taking the control out of your hands. And by that, I mean automating your finances.
Here are three specific strategies that have worked well for me:
- Set up automatic withdrawals from your checking account into your savings or retirement accounts (or, even better, both!)
- Register for automatic increases to your 401(k) each quarter
- Sign up for Digit, an amazing (free!) tool that connects to your bank account and saves money for you automatically
Pay yourself first, and you’ll be sure it gets done.
6. Just Start Small
The science of habits is fascinating. (If you haven’t read it yet, I highly recommend Charles Duhigg’s book The Power of Habit). They’re pretty tough to break — and pretty easy to make.
Use that to your advantage by creating a savings habit now. To make it easier, start out small. Really small.
You could, for example, put your change in a jar at the end of each day. Or add $1 to an envelope each day. Even with those tiny habits, saving money will eventually become part of your routine.
A related idea? If you’re paying off debt, try Dave Ramsay’s popular debt snowball method. It involves paying off your smallest debt first, with the hope that momentum will encourage you to pay off the rest.
7. Avoid Tabs at All Costs
Want to pay cash? Or start a tab?
If you want to save money this year, your answer should ALWAYS be the former.
Why? Because there’s no pain involved in ordering another drink — but there is pain involved in paying for it. So make yourself feel it.
That’s the same reason why a lot of people eschew credit cards; they don’t actually feel like they’re spending money when they use one. It’s like one big tab. If you’re one of those people, you can hide your credit card in a block of ice, or deep within your wallet.
Whether you use credit or not, you should certainly be tracking your spending. It’s really eye-opening to see where your money’s going — and you have no excuses, because tools like Mint and Spendee make it easy.
Trust me: Unless you see it yourself, your brain will keep telling you “out of sight, out of mind.” (Which is definitely not how you want to be with your money!)
8. Think of Prices in Hours
Let’s say a new set of golf clubs costs $300. That doesn’t sounds so bad, does it? After all, there are a lot more expensive things you could buy.
But hold your horses. Before dropping three Benjamins, this post from Making Sense of Cents advises framing it in a different way: How many hours would it take you to earn that $300?
If you earn $10/hour, that’s 30 hours of work — not counting taxes or other factors that reduce the size of your paycheck. (If you earn a salary, this website will calculate the hours for you.)
Are you willing to pay 30 hours of your life for those clubs?
Sometimes, just looking at purchases in a different way is what your brain needs to make the right decision.
9. Get Squirrelly
If you’re on a budget, you might assume you can’t save for retirement. Where, exactly, is that money supposed to come from?
Finding the money to save for retirement is tough, especially when it seems so far away. But time is on your side, and it’s vital you start putting anything — even crumbs — toward your future.
One squirrelly trick to get yourself to save is an app like Acorns.
Once you connect a credit or debit card, it rounds up your purchases to the nearest dollar and puts the change into an investment account.
Your brain won’t even know you’re saving — I can’t think of a better trick than that!
10. Imagine Your Purchase as Cash Instead
Is that cute new sweater speaking to you from the rack? Just whispering that you need to have it?
Well, before listening too hard, check the price. And then use a psychological trick sometimes called the stranger test.
Say the sweater costs $32. Imagine a stranger’s standing in front of you; in one hand, they have the sweater, and in the other, they have $32.
Which would you rather have? In most cases, the cash is probably more appealing — so this quick psychological test should keep you from making purchases that really aren’t necessary.
11. Save While You Spend
In spite of all our best efforts to avoid spending, you do have to buy things sometimes.
And when it comes time to do so, let yourself enjoy it — while also making sure you’re saving as much as possible.
One of my favorite tricks is to use a cash-back website like Ebates. When you buy an item through one of its 1,200 partner retailers, it’ll reward you with cash back — sometimes as much as 25%!
Sneaky, sneaky, indeed.
12. Turn That “No” Into a “Yes”
Saying “no” = no fun. So don’t think of it that way; instead, make your brain view every “no” as a “yes.”
Here’s what I mean: When your friend asks you to a dinner you can’t afford, don’t think of turning her down as saying “no.”
Think of it as saying “YES” to other opportunities: paying off your student loans, going on that dream vacation or finally investing in your retirement.
13. Find a Partner
When you want to exercise more, popular wisdom suggests you find a buddy; someone who will make sure you hit the gym every day.
The same goes for finances: Accountability partners work.
If you want to save more money, recruit a friend with similar goals. Agree that every time you make an unnecessary purchase or go out for drinks, you’ll text each other.
Just the knowledge you have to report your actions will help you stay on track — and hopefully, eventually, turn responsible spending into a habit.
14. Picture Your Goals… Literally
Saving for a house? Cut out inspiring home photos from magazines, then hang them up on your wall.
Saving for a trip to Paris? Make the Eiffel Tower your computer’s wallpaper.
Because they seem so far out of reach, saving for big goals is difficult. Visualizing them is a smart way to stay motivated.
You can even wrap a photo of your goal around your credit card, so that every time you take it out, you’ll think twice about using it. Blogger Trent Hamm, for example, uses photos of his kids to remind him to make better choices.
15. Let Yourself Splurge
That’s right: I said let yourself splurge. It won’t save you money at the moment, but it probably will over the long term.
Developing good financial habits takes time and effort — which means you need to give yourself a little breathing room.
So every quarter, treat yourself to something that’s not practical: a manicure, a bottle of wine, a night at the movies.
It’ll take some of the pressure off — and remind you that a good life is possible when you’re frugal. It just takes a little more work.
Disclosure: Clink! Clink! Clink! That’s the sound of pennies hitting our piggy bank, thanks to the affiliate links in this post. It’s a better savings plan than stopping traffic to pick up loose change — and safer, too!
Your Turn: How do you trick yourself into saving more money?
Susan Shain is a freelance writer and digital nomad. She covers travel, food and personal finance (basically, how to save money so you can travel more and eat more). Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.
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