Money mind tricks: ways to save money and control spending
We’ve all read articles about ways to save money, or tips in controlling spending. But sometimes we get used to the obvious and common ways and they become routine. As humans, who often make mistakes and sometimes lack discipline, we need new ideas to shock our system.
The same holds true in weight training. The weight lifter will gain strength through a routine, but at some point it’s likely a plateau will be reached. To get out of the plateau, the weight lifter must come up with new ways, or exercises to shock the muscles to strengthen more.
I think you can do the same thing as it relates to managing money or performing financial stewardship. There are some subtle little tricks you can do that can add up into some significant savings over time (if you can shock your system). They can get help get you out of a plateau. I call them money mind tricks. Here are a just a few that you can try:
Consider extra money as just another check
Your bonus or tax refund is just another paycheck. Before you have a chance to decide what you’re going to do with the money, fund your retirement, savings, giving and debt goals just like you would if you were receiving your typical monthly paycheck. Often we see this new found money as freedom to go and spend. Some spending is fine. However, don’t get overly excited and view it as extra money.
Why does this work? If you pretend like you need the money versus seeing it as extra money you will manage it more wisely and be able to contribute to your goals.
Pretend you have less than you do
Another good mind trick is pretending you have less money than you do. This can be done by forgetting about $100 in your account, or forgetting you have money in a budget category such as entertainment. Of course, you really know it’s there, however, you can decide to block spending on that money just like you lost it or forgot it. A good way to lose or forget the $100 is to create a transaction in your register for $100. Call it “money mind trick” and take it out of an area in which you want to create more margin.
Why does this work?
You’re accustomed to having the money available to you. And as long as the money is there, you’ll probably spend it. However, if you can interrupt that behavior you may find you really didn’t need the money after all and you can grow accustomed to spending less in an area such as entertainment.
Round up budget categories
When I plan my budget each month I like to round up budget categories. For example, let’s pretend your car payment is $300. What if you budgeted $310? And maybe you over budgeted in a few other areas for the month as well. Do you think you could over budget $50 and save that extra money? At the end of the month the extra money in each category can be used to fund other needs based spending or transferred directly to your savings account.
Why does it work?
Even if you didn’t send it over to your savings account immediately you will be creating more margin in your checking account each month to protect against the unexpected. Before long you just forget this extra money is there and it can grow into hundreds of extra dollars. You can then sweep through your categories and collect the extra money for savings, giving, etc.
Budget using net spendable income versus net income
Net spendable income (NSI), as defined by Crown Financial Ministries, is money available for spending after tithe and taxes. All of the sudden, you no longer have to find money to tithe. The money has already been purposed for this use. It’s now up to you to figure out your spending plan with what is remaining, or the net spendable income. Guess what? This includes using money for your 401(K) and other savings too. It should be taken from NSI.
Why does this work?
Most importantly, it sets your priorities in order. You’re tithing first and trusting God with this money is probably the most liberating thing you could ever do. By taking out the money first you no longer have to search for where to find the money to give each month. As an aside, the next payment you should make is to yourself (savings).
What do you think about these money mind tricks? Can you think of others?
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