(This post was originally published 12 September 2015, and has been updated.)
A great way to save more money is to make it harder to spend it. Here are seven ways to do just that.
Jim over at Wallet Hacks some time ago posted on five money-saving hacks backed by science.
Each of the five hacks is only a few words, and each is actionable immediately, especially the first one:
“Set one savings goal, leave roadblocks.”
Jim Wang, WalletHacks.com
That little bit of extra time to think
Changing habits isn't easy. (I'm living proof of that!)
It takes consistent effort over many weeks to break a habit or form a new one.
For particularly insidious habits — ones that have been with us for a long time, or that involve some kind of addiction — we can use all the help we can get.
That's where the roadblocks come in.
A roadblock doesn't make it impossible to get where you want to go, but it does make it more difficult. It's a barrier that has to be navigated around, either by taking a detour or by waiting for the road to clear.
By rigging roadblocks to spending, we give ourselves a little bit of extra time to think about the purchase we're about to make and to remember our big savings goals (which was the other part of the hack).
We give ourselves a little extra help in breaking a spending habit.
Seven spending roadblocks to help you spend less
I'll now give you seven roadblocks that can help you to save money. Pick the ones that work for you!
1. Carry only cash
If you tend to whip out your credit card or debit card at the speed of ka-ching, then leave them home.
Cash looks, feels, and smells a lot more like money, because … well … it is money! This alone might help you put your wallet back in your pocket or purse because you can see and feel the money leaving.
2. Carry only large bills
It might seem counterintuitive that carrying more money helps you to spend less. This helps me spend less every day.
My building has vending machines. They take $1 bills but they don't take $10 or $20 bills. If I keep the $1 bills out of my wallet when I'm at work, I won't feed them to the vending machines.
3. Put the money in an online savings account
Get a chunk of money out of your primary checking account, and don't link any debit cards to the savings account.
Most online banks will take a few days to transfer the money back. If everything stays in primary checking, it's as good as spent. I've seen it happen too many times with our own finances.
Fairly recently we've set up an automatic transfer of funds to our Ally Online Savings account. The interest rate is better and is still fairly accessible, but not immediately accessible.
4. Transfer some of that money to certificates of deposit
Every so often I'll open a certificate of deposit to get even more interest. The money is locked up for 12 or 18 months and can't be withdrawn without penalty, so it makes us think twice if we want to tap into it.
5. Physically lock your money away
Put it in a safe. Freeze it in a block of ice. Put it in a jar and wrap it with an entire roll of duct tape. Use your imagination. The key is inaccessibility.
6. Make app purchases password-protected, or block at the source
Entering a password to buy a $0.99 app is a pain, but that's exactly the point.
Those $0.99 apps add up, as well as in-app purchases.
A harder-core approach is to block charges at the cellular service level.
7. Use OpenDNS.com and block shopping sites
Are you a shopaholic? Then you can set up OpenDNS.com on your home network, and set the content filtering to block “ECommerce/Shopping” websites. Whether you give someone else the passwords to unblock them is up to you. I haven't monitored my internet speed closely, but some of my friends have, and they claim it's faster than going through our local service. Win-win!
Thanks for reading!
I love helping people achieve financial peace of mind by offering ways to spend less money and make more money, both online and offline!
header photo by Tim Collins
The first advice is to me the major tip to save money. Some people just can’t stop spending money, they’re compulsive buyers, and carrying a credit card is worse…
Fantastic tips! It clearly all adds up, I think especially locking your money away is the best tip. What I’ve started doing recently is shoving about £1 a day into my drawer and it soon builds into a nice mini savings account 🙂 thanks for posting!
I’m thrilled you like the article John, these are great ways to throw up roadblocks. OpenDNS is a clever trick 🙂
I like most everything I read of yours, Jim!