While enjoying my President’s Day today I came across an interesting article on Yahoo! Finance that listed ways that you can trick yourself into saving large sums of money (over time of course).Â All things considered, it was a pretty interesting article that had a very non-conventional way for you to build up a nest egg.
Essentially, what the article was advocating was that you do your best to trick yourself into thinking that you’re poor and that you need to save every dollar possible.Â If, heaven forbid, you actually think each purchase through and are able to convince yourself that you can’t afford it (even if you can), you’re more than likely going to walk away from the item and keep more of your money!
To me, this pretty much equates to what I had previously written about regarding practicing some good old self restraint while trying to determine whether your purchase is a need or a want.Â Unfortunately though, it doesn’t appear that this is advice that many people are taking very seriously, especially considering the fact that during 2006 the personal savings rate in America was negative (for the second year in a row) and reached the lowest levels since the Great Depression.
So, all of that being said, how can you reward yourself and put the money you save to work for you?Â Instead of just leaving the money in your checking account, why not try putting the money towards some of these items:
- Increase the amount of money you place in your employer sponsored 401k account
- Start an IRA (preferable a Roth, if you qualify)
- Put more money towards your mortgage’s principal
- Start a side business
- Put the money in your children’s college savings account.
Granted, this is just a small list of places for you to apply your money, but at the very least, it should be a good starting point.Â As I’ve said several times on this site, please consult with a certified financial planner before investing your money, or make sure you put in the necessary due diligence before making any investments on your own.