At dinner the other night, T.S. told me about a new trick she's developed to force herself to save money. It used to be that she'd just spend whatever she had in her checkbook. She didn't spend more than that, so she wasn't accumulating debt. But like many people, she wasn't saving either. She spent whatever she had on hand.
Because T.S. wants to save, she's opened an account at ING Direct. She wants to build a balance so that she can earn interest.
But in order to save, she needs to stop spending. Over the past few months, she's developed a system that let's her do that. Here's how it works:
- When T.S. gets her first paycheck every month, she deposits it into her checking account. She uses this money to pay bills and to fund her lifestyle, as normal.
- When she gets her second paycheck, she does the same thing.
- At the end of the month, just before she receives her next paycheck, she sweeps whatever remains in her checkbook into her savings account.
“I make myself feel like I'm living paycheck-to-paycheck,” T.S. told me. “If I move the money over to savings, I almost forget that I have it. I know it's there in the back of my head, but it's not in my checkbook ready to be spent.”
This monthly checkbook sweep might seem too simple to some readers, and it might never work for others. But for T.S., it's one way to meet her goals.
Because each of has different goals and different mindsets, we each have different approaches to money management. We develop our own tricks — or money hacks — to circumvent our personal weaknesses. The important thing is to keep trying new methods until you find a few that work for you.
Checkbook register photo by lemonjenny.