I’m always looking for painless ways to stash money.
The $5 Bill Savings Plan helps me save about $25 a month. I always look on the ground in parking lots for spare change (found two pennies yesterday!) and collect coins in a jar to take to the credit union.
Monthly automated savings helps. An inconvenient savings account lessens temptation.
But the biggest change to our finances came when I started doing one simple little trick: Rounding.
I recall loving the rounding exercises in elementary school math. After weeks of painstakingly doing long subtraction, 11.82 was suddenly 12! 6.94 was now 7! And 12 minus 7 was 5, give or take a few pennies — so simple.
You may recall my interview with Steve and Jan Berger, a couple I admire for their joyful, thoughtful style of managing money
At the heart of their enviable lifestyle is the same deceptively simple money trick: rounding up expenditures, rounding down deposits.
Over the course of a year, these hundreds of transactions begin to add up to real savings
It requires a mental shift, but you may find that rounding will help you build a money cushion that can be invested, used for an emergency savings account, or spent in a significant way that supports your goals.
There’s an App for That
You can easily use the rounding method to manually make adjustments in your checkbook balance. Alternately, you can make it automatic and watch your savings grow.
Acorns is an app that automatically rounds up your expenditures and invests the difference. I started using the app last year and have been impressed. You can open an account with $5 and the fee is just $1 a month for balances under $5,000. I use the rounding feature, and also automatically deposit $10 a month. (Use this link to join and Acorns will deposit a bonus $5 in your account.)
Clink allows you to set up automatic savings triggers. For instance, you can set it to save a certain percentage of every shopping and dining transaction. Clink has no deposit minimums or ongoing fees.
Qapital offers the transaction rounding option, and also lets you set goals tied to certain actions. For instance, you could connect it to your fitness tracker so that every time you walk 5,000 steps it deposits a dollar.
How About You?
What is your best savings strategy? Have you tried rounding your transactions? Are you using a mobile app to automate any of your savings?
We’d love to hear your thoughts and strategies on the Comments section of this page. Or stop by the January Money Diet Facebook Community Group, where we share savings ideas year ’round.
P.S. Grateful thanks to Always Shooting for the use of the quarters image.