Develop a Daily Savings Habit With The Help Of Technology.
For those in need of credit card debt help, this simple little exercise will serve two purposes:
1 instill into you an achievable savings habit.
2 put a surprising amount of money away each month.
How do we achieve this?
Really very simply! Switch making the majority of your purchases from using a credit card to a debit card, then make it a habit to round up your daily purchases to the nearest dollar, then save the difference.
You can do this either manually, e.g. each time you make a purchase with cash, deposit the change (to the next dollar) into a “piggy bank”. This is effective, but oh, so tedious.
A much better way.
Many banks nowadays offer a service where when you pay with a debit card, they will automatically submit the difference between your purchase amount and the next highest dollar, to a savings account. This can make it extremely painless to achieve a considerable savings without even noticing what is happening.
What this will do for you.
In order to evaluate how effective this plan will be, just sit down and make a list of your daily purchasing habits. You will be amazed at the amount of times you make separate transactions and quite often for rather small amounts e.g. a cappuccino, bus fare, parking, lunch, the movie. You get the picture!
Now calculate how much you would put away each day if every one of these purchases produced change in the amount of one cent to one dollar! Now, multiply that daily savings by the number of days in the month, and look at the amount of savings that will just magically appear. The beauty of this method is you really don’t notice it happening, and though the amount put away with each transaction appears inconsequential, with multiple daily purchases it really adds up.
Although this is an extremely effective method of managing your money, if you plan on using the manual method [piggy bank], then be aware that it does take a great amount of discipline. Having the piggy bank available and in view becomes a temptation to dip into it and thus negating the savings effect. A much better method is to embrace today’s technology and simply pay with a debit card and let your bank to the rest.
Perhaps the biggest benefit to this plan is how it subtly instills into you a system of daily savings that is very achievable and quite painless to execute. The resulting savings may even be of a secondary benefit in the long term! However, used wisely this savings amount will be of a huge significance in the short term.
Just imagine…
If you make just three purchases a day, that each had about a dollar in “change”, then just in the first month you would have about $100 squirrelled away, and you will never have missed any of it.
Now imagine having your bank transfer that to pay down the principal on your credit card, and think how significant that credit card debt help will be over the long term. Couple that with having a change in mindset about your savings habits, and you will find this simple little method will have a tremendous impact on both your financial status and your peace of mind.