Sunday, February 15, 2009

What do I do with found or saved money?

One of the easiest things to do with money that you've found or saved by shaving costs is to pretend it doesn't exist. Put it in your wallet to spend rather than going to the ATM, buy dessert at dinner, or toss it in a change jar.

Let me suggest something that you might not have tried. Stash the cash in a savings account. Even smaller amounts. Pool your deposits if you don't want to bother making transactions for amounts under $25.

One of the things that detracts from the pleasure of saving money is not appreciating what that money can do for you. If you pocket the money from reducing subscription costs, quitting smoking or the fiver you found floating in the parking lot you don't know what you spent it on.

If you put the money aside and allow it to accumulate it can be used for something you really want or need. Something that you'll appreciate and that will provide positive reinforcement for good practices.

An example from my own experience:

I took money that I was able to save from reducing subscription costs, selling stuff at a garage sale, money received from mail-in rebates, fantasy football league winnings, you name it. I began adding this money to an ING Direct account. After several months I was able to pay the airfare for a family vacation to Disney. Next purchase with saved cash? A new PC. I'm almost there!

Don't assume that $5 here and $15 there is immaterial. It does add up.

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