How to Really Save Money Every Month

by RJ

in Psychology

Where does that $100 you saved by cutting back on that certain expense last month actually go? Unfortunately, it usually vanishes. Even though you might have saved $100 on groceries, for example, doesn’t mean you have $100 more in your bank account every month.

If you really want to learn how to save money every month, you need to take one extra step. You need to physically withdraw that money from your checking account. Not at the end of the month, but today.

For example, you just reviewed your expenses from last month and saw that you spent $125 on eating out. You’re trying to save up for a dream vacation, so you set a goal to not eat out at all for 30 days. You estimate that this will save you $100.

The next step is the most important step of all and the reason why most people don’t ever learn how to save money every month. Right now, as in the beginning of the month or as soon as you set the goal, you need to save that $100. There is no sense of waiting 30 days. You need to withdraw that money and set it aside to into a separate account, today. (Shameless plug for ING Direct, who lets you set up sub-savings accounts to make this process simple)

What Happens If You Choose To Wait

If you choose to wait until the end of the month, that $100 will vanish. Your brain will tell you that you saved $100 by not eating out, so now you a spend $100 on something else. Typically an impulse purchase because your subconscious is telling you that you have an extra $100 to spend this month.

How to Save Money Every Month

Next time you need to save a few dollars, save it today. Don’t wait till the end of the month.

Set your goal now and work towards it for the next 30 days. I promise, you will have the same amount of money in your checking account in 30 days, then you have right now. However, your savings account will grow.

If you enjoyed this article, do you mind taking a second to retweet or share this post on Facebook? Thank you for your help!

Related Posts on Gen Y Wealth


John HunterNo Gravatar July 11, 2010 at 5:20 am

I agree you need to actually save the money. If you just increase some expense and increase another that doesn’t add to your saving (and your debt doesn’t increase). It is true some people need to move the money from checking to savings, or there retirement account or somewhere, but there are lots of people that don’t need to spend every dollar they have in their checking account. And given how many people have large credit card debt there are plenty of people that have no problem spending money they don’t have in their checking account.

RJ WeissNo Gravatar July 12, 2010 at 10:53 am

Thanks John. Loved your last statement.

“And given how many people have large credit card debt there are plenty of people that have no problem spending money they don’t have in their checking account.”

Broke by ChoiceNo Gravatar July 13, 2010 at 1:14 pm

thanks for this. I try to explain this concept to my friends all the time.

Comments on this entry are closed.

Previous post:

Next post: