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5 Budget Tricks You Won’t Believe Actually Work

Spending is too easy and budgeting is no fun! Use these five budget tricks to save more money.

Budgeting is like New Year’s Resolutions – we all know we need to make changes and follow a plan but how long do those plans usually last? For many people, saving and keeping a budget is so difficult that they deprive themselves of ever reaching the financial happiness they deserve.

When everything else has failed to work, these five budget tricks may be just the thing you need to finally save money and stick to your budget.

Budget Tricks #1: Out of Sight, Out of Mind

I had a teacher in high school that used to say, “Show me an income and I’ll show you how to live above it.” Let’s face it, spending money is just too much fun. If you have extra money in your budget, there’s a good chance you’re going to spend it.

Case in point: Curtis ’50-cent’ Jackson had to tell a bankruptcy judge in August that he couldn’t pay his debts even on monthly income in the millions of dollars. The 40-year old rapper disclosed spending $3,000 a month in clothes and more than $2,000 a month traveling.

budget tricks finding moneyIf you’ve tried everything else and just can’t seem to save money, try hiding it.

We’re not talking about burying your money in the backyard, that’s only going to be helpful to the people that buy your house 20 years from now and find your ‘lost’ treasure.

Instead, check out some of the automated savings programs like Bank of America’s Keep the Change Program. When you use the bank’s debit card, the purchase price is rounded up and the difference is automatically transferred from your checking account to savings. That $3.50 for a triple-choco, Venti coffee takes $4 from your checking and transfers $0.50 to your savings account.

Don’t miss out on a savings account interest rate of 0.95% on a Discover Online account. That’s about five-times the average on savings accounts nationwide and you pay no monthly fees. Take advantage of benefits to taking your banking online – Click here to learn how to earn more on an online savings account.

Another way to trick your budget by hiding money is to lock it up with Certificates of Deposit (CDs). These are short-term notes sold by the bank that pay interest over periods from three months to three years. You cannot use the money until the CD matures or could face a penalty or loss of interest, so it forces you to keep the money saved.

Budget Tricks #2: Spend Money to Save Money

Most people say, “Spend money to make money,” only jokingly but it may actually be true that you have to spend money to be able to save money.

Just out of college and after landing my first real job as a financial analyst, I set out to save every penny. I skimped and worked extra jobs to build my nest egg and reach financial freedom.

I was saving so much and working so hard that I would burn out every few months and end up going on a spending binge. The financial equivalent of yo-yo dieting was constantly setting me back to zero.

Make sure you are spending at least a little of your hard-earned money every month. Budget your fun-money carefully but make sure you’re enjoying life and can keep to your goals.

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budget tricks saving first

Budget Tricks #3: Turn your Budget Upside-Down

Most people start their budget by first taking expenses out of their income. By the time they work through all their expenses, there’s nothing left for saving and investment.

budget tricks that workThey don’t feel particularly motivated to reduce expenses because they are able to pay everything with their current income. The result is little financial discipline and a savings account that never grows.

Turn your budget upside-down with my favorite budget trick. Take out the money for savings and investment first, before your normal living expenses. The general rule is 10% of your income but you might want to try for a little more depending on the time you’ve got left to reach your financial goals.

If you aren’t able to meet your expenses with the money that’s left over, then it’s time to start cutting back.

Not sure how to start investing to reach your goals? Check out this how-to guide for investing and eight stock market basics!

Budget Tricks #4: Invest in Yourself and Make More Money

Who needs budget tricks when you’re able to make more money? Stop spending all your time worrying about how to save money and spend a little time thinking about how to make extra money.

Passive Income Investing Real Estate BloggingIdeas on making extra money range from quick surveys and social media sharing to full-on side hustle projects :

What, you don’t have an extra five hours a week for a side-hustle? The best way to make extra cash is through passive investments like dividend investments, bonds and peer lending. You’ll be able to increase your income without having to take on a second job. Check out The Passive Income Myth for ways to be successful with passive income strategies.

Budget Tricks #5: Separate your Money with Budget Bucketing

We spend money because we have it. That extra $200 sitting in your checking account at the end of the month is just too tempting. If it’s there after your bills are paid, you’re going to spend it.

That’s why I like to create separate savings and checking accounts for different needs. Budget bucketing is about creating a little financial discipline by separating your money according to your goals. You might have one savings account for your emergency fund and one account for other savings.

You might open up one checking account for bare necessities like utilities, groceries and the mortgage while you hold money in another account for the expenses that aren’t quite as important.

Budget bucketing helps you stick to a budget because you’ll only spend what is left in an account. It ‘quarantines’ your money in different places.

The beauty of these five budget tricks is that, after a few months of using them, you might not even need to trick your budget. Do anything for three months or more and you’re going to create a habit, and that works for budgets too! Create great spending habits with these budget tricks and you’ll be surprised how quickly you meet your financial goals.

 

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Joseph Hogue, CFAAbout Joseph Hogue

An investment analyst by profession, I run two blogs (Crowd101 and PeerFinance101) in personal finance, peer lending and crowdfunding. I've been on both sides of the table as a lender and a borrower and am excited to be a part of the peer movement. With the power of the internet, people are helping other people manage debt and raise money in ways never before possible.

A veteran and Iowa-native, I now live in Colombia with my wife and son. Like so many people, I was once trapped into the money myth and what it means to be successful. After taking control of my finances and learning how to make money in a job I love, I found a level of financial freedom that just has to be shared.

Comments

  1. Hmm i didn’t know about those automated saving programs, thanks for the insight! it was very helpful!

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