Find it difficult to save money each month? Have you tried ‘taxing’ yourself?
NOTE: if you’re a good saver ignore this post but if you’re one of those people still with the mandatory £1 in your savings account this is probably for you.
Whenever you buy anything on an impulse, you impose a 100% ‘tax’ on it, for example lets say you see a £15 bargain DVD box set on Amazon but you have to have £30 to buy it. £15 goes to Amazon and the other £15 goes into your savings account.
Obviously, you’re not going to start doing this for things like rent, electricity, food spending etc but for things that are non-essential it’s a great technique!
- Buying a £10 T-Shirt, you have to have £20 to buy. £10 for the t-shirt, £10 into your savings.
- Spending £20 on a bottle of alcohol, you need £40 to buy. £20 for the alcohol & £20 into savings. The rest of your essential groceries have 0% ‘tax’.
- Buying a £40 meal out, you have to have £80 to buy. £40 for the meal and £40 for your savings.
Why is this technique good?
- It makes you think twice about impulse buys
- It’s free
- It makes you accountable for your actions
- Seeing small amounts leave your current account feels better than one off lump sums
- It forces you to do something you can’t do on your own
- There is no excuse not to try it (remember it doesn’t apply to non essential items)
How to make this technique better:
- Use mobile banking to quickly move cash into savings
- Keep it to non essential purchases only
- If you can get a savings account that isn’t linked or shown when you log in to your usual online banking, you ‘forget’ how much you have managed to save!
- Force yourself to try it for 1 month and see how you feel
- Keep to 100% tax for the first month at the very least
- You might think this is stupid but give it a go, you’ve got nothing to lose
- at the end of the year the ‘tax’ is yours to spend/continue to save.
What do we think? Load of rubbish or worth a go?
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Thanks to our friends over at Lifehacker for the idea.