Saving money isn’t easy – especially when using a debit or credit card to purchase everything. Then, I ran across something called the 5 Dollar Savings Plan on a few other blogs.
The steps are simple:
- Every time there is a $5 bill in your wallet, put it in an envelope or jar at home
- Once per month (or whenever you wish) deposit the money into a savings account
- Keep your deposit receipts to see how much you’ve “saved” at the end of the year
Pretty cool yes? A study from MIT found that subjects paid more when they were instructed to use a credit card rather than cash. In fact, they found that they were willing to spend up to 100% more with plastic. Yikes!
Here’s my new savings plan which adds to the $5 one:
- Allow myself $50 in cash per week for eating out (coffee, Jimmy Johns, etc.)
- Each $5 bill I get from change from those places I HAVE to stow away at home. Realistically, this gives me about $30 in actual spending money for weekly food purchases
- Empty the loose change into my giant coin bank weekly
I started my savings plan Monday and already have $25 in the envelope. Today I ate out for lunch (shhh!) but yesterday I brought a bagged lunch…which is ultimately healthier anyway.
I’m well on my way to saving money! Yay! What do I plan to do with my savings? The coin bank change my fiance and I have been using is to save/spend on our Bachelor/Bachelorette parties in Vegas while the $5 savings plan will be to pay off my CapitalOne credit card. I’ve had nearly the same balance since my sophomore year of college…that’s 8 years. Those jerks and their APR really get you!
I’ll keep you all updated on my progress! In the meantime, what do you do to save money? Have you tried the $5 savings plan?