Anyone who can pull the wool over his own eyes should be good at saving money. The ability to kid yourself is a powerful ally in the struggle to hang on to cash.
Most of us live on whatever money we find in our checkbooks, plus a little bit more. If you can keep money out of your checkbook, or fool yourself into thinking there is less money there than is actually the case, your ability to save could improve tremendously: Here are some of the gimmicks I've used over the years to fight my natural inclination to spend every cent I get:
Payroll Deduction Plans. If you or your spouse works for a company offering payroll saving, don't fail to take advantage of it. This is a marvelous effective way to save. Money builds up every month without even realizing it.
Simply ask the company to detect a certain sum from every paycheck and deposit it directly into savings - a credit union, bank account, or U.S. Savings Bond. The remainder is your take-home pay.
Bank Deduction Plans. You can ask your bank to move a certain amount of money from checking to savings every month. You have to remember to enter the deduction in the check stub so you won't overdraw the account, but that's no big hurdle. Just make it a habit to deduct the savings at the same timw as you enter the pay-check.
Income Tax Withholding. Some people deliberately have more money than necessary withheld from their paychecks. At tax time, they can then count on a bit refund check, to put directly into savings. A disadvantage to this approach is that you're not earning interest on your savings during the time it's held by the government. But better to do without interest for a few months than not save at all.
Excess tax withholding has the same painless features as payroll savings, and in fact is a good subsititute at companies that don't have such plans. Call the payroll office and ask how to increase tax withholding. It's done by claiming fewer dependents than you actually have.
Homemade Gimmicks. He all have them. One is to take your check stubs, by substracting larger amounts than you've actually spent. At the end of the year, when you make an honest accounting, you may find several hundred dollars that you managed to overlook. It's like setting the clock ahead to help you get places on time - you know what you've done, but somehow the magic always works.
A disadvantage is that you can't fully balance your checkbook and bank statement every month. But as long as you go over the amount of each check and deposit, to see that everything is entered correctly, you'll probably catch any errors.
Christmas Clubs. The main future of these clubs, offered by banks, savings and loans and some credit unions, is the coupon booklet. Every month, tear out the coupon and make the savings deposit the coupon calls for. It's a kind of financial placebo. You could just as well save $25, $50 or $100 a month on your own. But in some mysterious fashion, the booklet often seems to help.
Some institutions pay no interest on Christmas Clubs, some pay only if the club is completed; some pay interest just as they do on ordinary savings accounts. If your bank of S&L limits the interest payment in any way, try making your own coupon booklet, and turning your savings account into a permanent Christmas Club.