Sometimes the best way to save money is to remove yourself from temptation’s grasp. The desire to spend money can come in all kinds of forms. From psychological, to physiological, our minds, bodies, and environments can create all sorts of scenarios in which we want to do things that cost us money.
I’ve found that when it comes to certain spending temptations, they’re best left out of sight and out of mind to reduce the chance they’ll cost us money.
Savings bonds and safe deposit boxes
I know that government savings bonds might be the investments of grandparents, but they can be a great way to put your money out of sight and out of mind. These investments can continue to accumulate interest for up to 30 years. The I bond version’s rate is based partially upon inflation, which can help your dollars maintain their value over time, and once the investment is made, there is little maintenance to go along with the purchase.
And while savings bonds can now be purchased electronically, if you’re like me and have the “old school” paper bonds, a great place to stash them — along with other valuables — might be in a safe deposit box. In this way they are in a secure location, but maybe just as importantly, they’re out of sight and out of mind for when you’re itching to spend and need some spare cash.
Having to find your safe deposit box key, head over to the local bank branch, ask for a representative to take you to the vault, sign in, get your bond (or whatever), close up the box, and head back home can be a deterrent to spending. Therefore, putting things that might be a temptation to spend or convert to cash in a safe deposit box could be a great way to keep them out of harm’s way in more ways than one.
Cash vs. credit
The credit card may be one of the greatest dangers to the “out of sight, out of mind” saving strategy. I liken credit cards to chips in a casino — they make it so much easier for the consumer to spend money without thinking too much about it.
This is one of the reasons I tend to carry cash rather than credit cards much of the time. Knowing that there is a credit card there and ready at my disposal and that it can be easily swiped for a quick purchase makes doing so super simple. Having to pull out paper bills, count them, and watch them disappear may make a spender think a little more about a purchase — plus, once those bills are gone, they’re gone, and another process — hitting the ATM or local bank branch — must be undertaken. Such efforts can make the process of spending more difficult and the process of saving just a little simpler with that little piece of plastic “out of sight and out of mind”.
Junk food and other vices
Don’t get me wrong, I’m not a junk food junkie or anything like that, but I find it’s a lot easier to get on a binge if the stuff is around. And I’ve realized that this goes for many such products or vices. From video games, junk food, and ice cream, to chips, alcohol, and more, proximity often leads to overindulgence.
Therefore, we often tend to avoid buying such products altogether, unless it’s for a special treat, or if we do buy them, we do so in lesser amounts. And you know what? We tend to consume less of them in the process and the desire to “be bad” tends to go away a little bit. In this way we manage to keep our monthly food budget for our family of four to only about $250.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.