Smart ways to save money

coin jar

In January, I started a savings experiment. The experiment was designed to save money for my “emergency cushion” account without feeling the loss from my pocket or budget. I figured I could probably save about $30 to $50 per month — not much, but not peanuts either. In six months, I hoped to save about $250, which would be a smart way to save money.

Last week, a month later than I’d originally intended, I deposited the money into my savings account. Before I did, I counted it up to see how much I’d accumulated. I had $723. Wow! And I’d managed to save all of that without even noticing.

I’ll share how I was able to save more than I’d expected, but first I’ll explain how the strategy works. The rules are pretty simple.

Rules of the Game: No Paying With Change

How did I save $723 in seven months without effort? The rules were simple.

  • Whenever I paid for things in cash, I never used change.
  • When I got home, I tossed any change in my pocket into a change jar.

That’s it. That’s my super-secret strategy. It’s that simple.

I expected to save a dollar or two per day, nothing more. But this savings strategy quickly ballooned because I inadvertently turned spending into a game.

Important note:I live in Canada where there’s no one-dollar bill. If you want to do this and you live in the States, you’ll want to amend the rules so that $1 bills count as change.

The gamification of personal finance is a new hot topic — along with the gamification of pretty much everything else. The theory behind “gamification” is that if you want people to take an action, you need to harness the same mechanics that make games fun and addictive.

Related >> Turning Money Management Into a Game

So how was this game layer built into my savings strategy?

Here are the key elements:

  • Tossing the coins into the jar was like acquiring a handful of points in a video game, complete with the validating “clink” sound-effect to let me know that I’d done a good job.
  • Watching the level of the coins rise over time led to a surprising sense of satisfaction and achievement.
  • There was variability in the progress that I made, but I could influence that variability.

I think it’s that last part that made the biggest difference. The fact that I could change my behavior to “rack up more points” is what made this really feel like a game. I wanted to “level up”!

Leveling Up the Savings Game

Before I go on, I should make a confession: This didn’t actually start as a savings strategy.

I started saving my change because I was annoyed at carrying it around all the time. I dumped pennies, nickels, dimes, and all the rest into a jar just so my money wouldn’t be so annoyingly heavy. But when the coins in the jar started to rise, all of the game mechanics I described above kicked in.

“Hey, I wonder how much money I could save by tossing all of my change in here,” I thought. “I don’t think I’d miss it, so why not give it a chance?”

So I did. Instead of just the smaller change, I put all of my coins in the jar. And I was truly surprised at the feeling of accomplishment and success I gained when I could put a $1 or $2 coin in the jar. It felt like a real “good progress” kind of day!

That’s when I started to change my behavior.

The first thing I noticed was that I was making fewer transactions via debit or credit, and trying to do as much as I could in cash — all so that I’d have more change left over to toss into the jar. I’d actually feel a loss when I made a credit transaction. If the transaction was for, say, $12.97, then I’d feel like “there goes $2.03 that could have gone into the jar!”

I found myself going even further. For instance, I’d adjust my purchase total so that I could get more change. My standing Starbucks order, which cost $4.54, was downgraded a size so that I would have more change for the jar.

At the same time, I’d sometimes find myself adding something small to a purchase so that instead of a total cost of $19.47 ($0.53 change), for example, I’d spend $20.97 ($4.03 change).

It got to the point that whenever I passed by a Laundromat, I’d hop in, slide a $5 bill into the change machine, and have it spit out more coins. Yes, I know it sounds kind of crazy, but it was fun. The result was more and more change into the jar, and more and more satisfaction for me!

Hacking Your Savings and Growth

Okay, what’s this story really all about?

The key takeaway here isn’t that you could adopt my coin jar savings strategy to save $723 in the next seven months without noticing. (Maybe you could, maybe you couldn’t.)

My message is that whatever your goal, you should find a way to turn it into a game, because whereas we do chores because we have to, we play games because we want to. When we want to do something, we often find ourselves doing more and more of it.

This applies to savings and personal finance, but it applies to a lot of other things, too: waking up early, exercising, controlling your diet, and how much television you watch. Heck, if you’re a business owner, it even applies to getting your customers to want to move through your chain of conversion. (Can you tell I’m a marketer?)

Here are the key things to remember when turning your chores into games:

  • There should be frequent opportunities for action, and immediate feedback.
  • You should have some way of “racking up points” over time.
  • You should be able to adjust your behavior and rack up more of those points.

What do you think? Is there an important gamification element that I missed? How do you trick yourself into saving more? And I’m curious: How much have you managed to save with your coin jar?

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