September 22, 2014 in Smart Money

Jean Chatzky: Trick yourself into saving

Editor’s note: Jean Chatzky, the financial editor for NBC’s “TODAY” show, is an award-winning personal finance journalist, AARP’s personal finance ambassador and a contributing editor for Fortune magazine. Her eighth and most recent book is “Money Rules: The Simple Path to Lifelong Security.” Jean blogs at www.jeanchatzky.com and tweets @JeanChatzky. You can find her on LinkedIn and Facebook, too.

Saving, once you break it down, is fairly easy: You set aside money on a regular basis, and it grows into a nice healthy stash.

Of course, actually putting that money in the bank once, let alone every month, is harder than it sounds.

The toughest part for most of us? Finding the money.

For more on that, watch my latest video, “Bankrate Bottom Line: Save $5,000 this year,” which lists easy ways to come up with an extra $400-plus per month:







Now, actually getting that money to put in the bank may come down to tricking yourself. Here are some ways to do that:

Make it painless. I always suggest starting with the easy cuts and working your way up to the hard decisions. If you’re lucky, you may come up with extra cash to save without making any drastic lifestyle changes, like in the video.

Another idea: Audit your bank and credit card accounts, which essentially involves going through your statements and redlining anything you can slash from your budget (then making the phone calls to actually do it).

Brian J. O’Connor, the author of “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese,” did that, and found that he was sending $25 per month to an old email service he no longer used. The culprit? Automatic charges he authorized, then promptly forgot when he switched accounts.

I’m willing to bet that you have a few automatic drains on your wallet as well.

Find easy swaps. There are plenty of ways to replace the expensive things in your life with cheaper versions, like eating meals at home rather than restaurants, or generic products instead of brand name.

To gauge your family’s consumption, you could try what Jeff Yeager, the Ultimate Cheapskate and author of “Don’t Throw That Away!,” calls the trash-can autopsy.

“By studying the contents of your trash and recycling bin a couple times a year, the average family can discover new ways to save hundreds — or probably thousands — of dollars a year,” Yeager says. “From too many brand-name products, to small packages on which you’d save money by sizing up, to too many fast food containers, your trash can tell you how you’re wasting both money and the earth’s resources.”

A couple swaps can get you well on your way to savings success.

Purge: Start with your house. Many people could scrape together enough unwanted items to host a pretty successful yard sale, and rake in some extra bucks.

There are also online services these days that will allow you to mail in a bag of your unwanted clothing in exchange for cash, or credit to shop the other used clothing items on the sites. Many of the sites’ operators donate what they don’t accept, so you get it out of your house either way.

Finally, if you have a storage unit, and you haven’t visited it in the last year, you probably don’t need much of what’s in there. What you do need may likely be stored at your home. So clean it out; then get rid of the extra cost.

Visualize your goal. Yes, it sounds a bit hokey. But putting a face to your endgame can help you get there.

Don’t save for retirement; save for a retirement in a beachfront condo in Key West, Florida. Getting specific about your goals can get you excited about them, which will give you the drive you need to get that money in the bank.

After you have the cash, it’s up to you to come up with the willpower to put the money away rather than spend it. Finding that motivation means prioritizing the future over the present. That’s a tough battle, because your brain is wired to take the opposite approach.

Looking for another off-the-wall way to save? Check out Bankrate’s “The craziest thing I did to save money.”