Now or Later? – 5 Money Saving Tricks That Really Work!

Do any of you remember a Now and Later craze? I think I was in middle school, and having these candies was a form of social capital. We’d all measure our self worth by how many we had. I was very valuable. Apparently, they got their name because as you kept them in your mouth, they would be faintly sweet in the now and then release a blast of sweetness later? I don’t remember that. I just remember that they came through in a wave, and just as quickly, they were gone (isn’t that always the way?). Today I bring them back from a bygone age! We’ll use them as a way to think about some money saving tricks that really work.

I’m even going to create my own competitive spinoff of it and get filthy rich in the process! Mwah ha ha ha!

And back to Earth… Really though, after reading, I hope it helps us form a mindset to resist impulse purchases. I also hope it illuminates the massively positive ramifications of saving our money. Finally, I’ll lay out some money saving tricks I’ve used that really work. Then, we can all start saving together!

Now or Later? A Sweet Saving Mindset

Okay, as promised, my spinoff candy! I call it the Now Or Later?

Not impressed?

Me neither. But just work with me here. If I were to make a candy to help people save money that is what I would call it. The Now Or Later?

The question it prompts us to ask is, do you want a little sweetness now (dopamine hit from impulse buy), or a blast of sweetness later (many times that amount of money later in life)?

Rather than delaying many minutes for the flavor burst, my particular candy would take many years. Something tells me that wouldn’t sell very well in today’s market…

Nevertheless, the blast of sweetness would be so profound that you wouldn’t for a moment regret your decision to wait and save.

If in this post, Teacher’s Pet – Compounding Interest, I shared a reaction from a colleague who was nearing retirement. In it, she was given an opportunity to have a hypothetical conversation with her 18 year old self. More specifically, she witnessed her 18 year old self reaching for the “$10,000 now” envelope instead of the “$250,000 later” envelope and she absolutely lost it. It’s worth a read and also helps us to understand why compounding interest makes our savings get so big over time.

In the last post, Harness Buyer’s Remorse and $ave, we discussed the concept of buyer’s remorse and how prevalent it has become when making purchases.

So, the way I see it is this: If 1. There is a high probability that you will regret your purchase. And 2. There is a very high probability that the money you save (by not spending) will be worth many times more later, then quickly it becomes a non-starter to buy a given item.

Over time, after rejecting many purchases, the savings accumulate and the good habits crystalize.

So, every time you are on the verge of making a questionable purchase, pop a Now Or Later? in your mouth. You’ll be so glad you did!

Before we get to our 5 Money Saving Tricks let’s briefly look at the numbers so we can see how powerful this really can be.

Seeing the Power in the Numbers!

Sometimes it’s helpful to put concrete numbers out there, to get a firmer grasp on how potent this can be for your long term financial goals.

Let’s say the average American is staring at a purchase of $100. They know they can easily cover that in savings so, most likely, they don’t even flinch. But what if I told them, in 40 years I’d give them $2,000 for that $100? They would at least flinch right?

The flinch is good! It’s a place to start. Now, I have their ear.

Then, I tell them, if they can cut $100 in impulse spending per month, for those 40 years, they can have over $300,000. Chances are, by now, I have their attention.

“But why stop there?” I ask them. “It turns out, you are spending closer to $500 per month unnecessarily (I actually estimate it’s closer to $1,000). So, if you trim back on that, after 40 years your number could be over $1.5 million.”

“But go ahead,” I would encourage. “Click away and buy that VR headset that’s on sale. I’m sure it will still be current in a few years and you’ll be using it a lot.”

What do you think, do they make that purchase? Probably! But, I at least got them to flinch. Really it doesn’t even matter if they make the purchase or not. The important thing is whether YOU AND I can change our habits and prevent that purchase.

We know if we curb our frivolous spending, we’ll develop good habits that will amount to massive savings over time.

So, after looking at the numbers, try on one of these Money Saving Tricks for size. If it fits, use it and reap the rewards.

5 Money Saving Tricks that Work!

It’s so easy to buy things these days. I believe it is imperative to have strategies in place to prevent impulse purchases. Sometimes, I feel like I am protecting my future self from my present self. But whatever works right?

Try some of these money saving tricks. I have personally tried and can vouch for each one of them. Try a few and see which one works for you! If you have success with one, or like one I didn’t list, let me know about it in the comments.

#1 on our List of Money Saving Tricks – Use the 20/40 Rule of Thumb

In the last section, we showed the math of what happens when you think long term. Rather than buying an item now, you can project how much you will have down the road if you don’t spend the money at that moment.

This is a trick I use often. It is the only one I made up on my own so maybe I’m a smidge biased. And as always when investing, I assume an 8% return on investment.

Here’s how it works: Basically you see how much something will cost you now, and you multiply that amount by 20. This will tell you how much you’ll have in 40 years (if you invest it at the 8% return that the market has averaged since its conception.)

So, in the case of a $100 item, I ask would I rather spend $100 now or have $2,000 (100 x 20) later?

The 20/40 rule of thumb works particularly well for larger sums of money.

If buying a new car, and deciding whether I want the sunroof package (which we all do) for an extra $1,500 apply the 20/40 rule and see if $30,000 (1,500 x 20) down the line seems more enticing!

Or better yet! Rather than buying a new car at all, how about a used car for $10,000 less. Applying the 20/40 rule you ask yourself do I want to spend the extra $10,000 now or have $200,000 (20 x 10,000) later on? Now we are talking life-altering figures! And guess what, that new car is going to lose its battle with father time just like the rest of them.

Try the 20/40 rule of thumb and see if it helps deter any impulse buys.

#2 on our List of Money Saving Tricks – Set A Fixed Savings Amount

This is similar to having a budget, but essentially you set a non-negotiable saving amount.

For example: This month, no matter what, I will save $500.00. That way, if an item strikes your fancy, you only have to ask yourself whether it cuts into your $500 savings allotment. If your answer is yes, then hold yourself accountable and don’t buy it.

If it doesn’t cut into your savings allotment, then you can feel free to go ahead with the purchase. This works for people that like hard lines to help guide them. It also let’s you buy a fancy coffee without feeling guilty.

With this strategy, you have to keep track of your spending and make sure you don’t go over accidentally. I liked checking in once a week to see how I was doing, but if that’s not your style you can also automate your savings.

Have your designated savings amount be automatically transferred each month from your checking account (for example) to your savings account.

In a way it was kind of like having an allowance. If I wanted something, but didn’t have enough allotted for that month, I made sure to set aside that amount for next month. This ties in well to the next on our list of money saving tricks.

#3 on the List of Money Saving Tricks – Make a 3-Day Wait List

This is designed to curb the capricious impulse spending that we all fall victim to.

It’s very simple and surprisingly effective.

Here’s how it works: Anything, and I do mean anything, that you get an urge to buy has to be written down on a list. Then, after 3 full days have passed, if you decide you still want/need it, you can go ahead and purchase it.

Now obviously, things like common groceries or gas for your car, are an exception to this rule. But almost everything else goes on the list.

I’ve tried this and had many “What the eff was I thinking?” moments.

Just for laughs try putting very small items, like a pack of gum you see in the checkout line, on the list. Obviously, after 3 days that pack of gum is not going to get you back in the store, but might be good for a chuckle. Oh the hilarity!

I found this strategy really helped me curb that impulse spending and helped me drastically reduce those urges to spend. In other words, not spending became a habit that I’m pretty good at keeping to these days.

#4 on our List of Money Saving Tricks – Always Pay in Cash

I did not like this one, but it was HIGHLY EFFECTIVE. There is something very different about handing over physical cash versus theoretical credit card cash. Sometimes the clerk had to wrestle it out of my hands.

In the few months that I did this, I essentially didn’t buy anything. The steel-cut oatmeal in the food pantry got eaten, the old polenta grains, and all the food I had sitting around just so I didn’t have to go grocery shopping and hand over cash.

So in that sense, if you feel like your pantry needs a good cleaning, this may be a nice secondary benefit.

The primary benefit was that I didn’t spend much of anything.

In the end though, the inconvenience of getting cash (which is partly why this works so well) and the loss of credit card points (which I easily overcame by not spending any money), were too much for me.

It’s definitely worth trying for a month to see what you think.

#5 on our List ofMoney Saving Tricks – Avoid Temptation!

Sometimes when I watch a program I feel like I am watching thinly veiled infomercials. If you stop watching the show and just look for things like product placements it can become glaringly obvious to the point of being painful.

I’m going to date myself here, but I was the perfect age to watch Wayne’s World. In it, there is a scene that perfectly spoofs this very concept (and also features very youthful versions of Mike Myers, Dana Carvey and Rob Lowe).

Go ahead and watch it! You deserve a break too!

But, ridiculousness aside, these things work. Remember, advertising is a $300,000,000 industry! They know what they are doing.

So, start to keep track of times you make purchases. Figure out situations that give you an impulse and see what you can do to counteract those impulses.

Do you have trouble driving by a specific store without going in (I know I do)? If so, take a different route (when reasonable) or just power past!

Are their certain shows you watch that stimulate you to spend? Take a break from the show or tell yourself you can only watch it if you promise not to make a purchase during or after.

Whether it’s commercials, infomercials, grocery shopping, tool reviews, clothing stores, new gadget blogs or anything else, make it a point to be self aware and formulate a plan to help you avoid those impulses.

Like everything else, after you are successful for a spell, it starts to become a habit. Pretty soon, you might realize you just drove by that store without even thinking about it!

Summary

As teachers, we work very hard for our money. When we come home from a long day at the job, there is a likelihood that we are a little drained, and if we don’t have correcting, reports, emails, etc. on our lists, it seems perfectly reasonable that we just want to unwind a bit.

But when we’re tired, we’re probably also a little vulnerable to make impulse purchases. By understanding the forces working against us (like advertising), realizing when we are most vulnerable, and using strategies to counteract our impulses, we can start saving more and more of our hard-earned cash.

Over time it will become a habit and our savings will start to accumulate. Our investments will grow as our need to spend dwindles. And the one thing we can’t buy, happiness, will not take a hit at all. In fact, it will probably grow.

In the end, we’ll be happier, healthier teachers with more options and less stress related to our finances. This will probably make us more effective in the classroom and allow us more precious time for pursuits that renew us.

Whether it’s one of the money saving tricks highlighted above, or any other that you’ve found effective, I think we can all benefit from building habits around saving our money so that we can have more time and more options later on down the line.

As always, thank you for reading. I’d love to hear about any money saving tricks that you’ve tried that have worked for you. Please feel free to comment below or reach out and contact me with anything else that’s on your mind!