Common Cents

This is the time of year we think about buying decorations, fancy food, party clothes, and gifts. So it’s also a good time to think about some financial fundamentals to keep our long-term savings goals on track.

1. Allowance

Treat yo’ self is real, but if it puts us in debt we aren’t doing it right. We can set money aside from every paycheck for splurging. When the mood strikes, we only spend the money we saved for the binge. We can also keep a change jar or piggy bank. Since we pay for most purchases with a card these days this style of saving takes a long time, but delayed gratification is not always a bad thing.

2. Pay with cash

I know this sounds archaic and inconvenient, but that’s kinda the point. If we have to literally pull bills out of our wallets, count them, then hand them over to the cashier at Bath and Body Works, we see and feel how much those buy-three-get-three-free body care items REALLY cost us. There’s just something about handing our hard earned money over to someone else that makes us feel the loss more intensely.

3. Write it down

The point isn’t to change our habits, but to identify them. If we use our debit or credit cards to purchase everything we buy and pay bills online through our banks, we can just look at our queues for a month and see where all our money goes. From this data, we can make decisions regarding what changes we want to make. Too many trips to Starbucks? Maybe it’s time to take coffee from home with us to the office. If Starbucks is a priority, where else could we cut back?  

4. Strategic direct deposit

We can usually assign percentages of our paycheck to different accounts. If we have an interest bearing savings account, we can divert a percentage of our wages to it every pay period. We don’t miss that money if we don’t have easy access to it.

5. Be generous

If we’re generous with our time, talent, and treasure, that generosity comes back to us and usually not in the way we expect. Paying for our friend’s lunch doesn’t mean she will pay the next time. It could be that your daughter buys you the sweater you had your eye on at Target. Now is a good time to ask friends and family if they’d like us to donate to their favorite charity as their present this year. If so, we may want to do a little research to ensure our financial gifts go to the group the organization says they’re helping. (E.g., if we donate to an organization that helps people, will our money go to the people or to administrative fees?)

With a little common sense and a bit of self-control, we can reach our savings goals without feeling deprived.

Do you trick yourself into being frugal? Please share some tips in the comments section below.