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Military Finances 101: How to Trick Yourself Into Saving Money

Managing Your Finances

Military life is busy. Managing your finances can sometimes be a Bridge Too Far. It hard to save for both military members and civilians. The Federal Reserve’s 2017 Economic Well-Being of American Households report shed some eye opening light on our current state. Approximately 40 percent of Americans would not be able to cover an unexpected $400 expense without either selling something or borrowing money.1 While that number is actually an improvement from 50 percent of adults in 2013, it still shows that saving where we can won’t hurt anything. But the problem is, spending is easier (and often more gratifying in the short term). The best way to save more? Trick yourself using one of these hacks:


Trick #1: Automate Your Savings

One of the best ways to save your money is to forget it’s even there. Take willpower out of the picture by setting up an automatic transfer from your checking account to wherever - savings, TSP or a Roth IRA depending on where you are on your financial plan. If you can, have the transfer done from your pay, before it even hits your bank account. If you can't do that, then set up an automatic transfer from your bank account. After a while, you may completely forget that you’re even saving money, meaning there’s much less temptation to spend it instead.

Trick #2: Name Your Savings Accounts

Don’t underestimate the power of giving your money a name or meaning. Setting up sub-accounts for specific savings goals can be effective, especially if you rename each account to the goal you’re saving for. Think about it, which would be harder to take money out of? Savings or 10 Year Anniversary Trip? Directly connecting your goal with your savings can help deter you and your spouse from wanting to tap into that account.

Trick #3: Find a Personal Budget Software App

You likely don’t have the time (or desire) to sit down and track your spending manually. But with today’s software apps, there are plenty of personal budgeting apps that can sync your accounts, track your spending in real-time and automatically develop a budget to help you save. Giving a visual overview of your spending and saving habits can be a real eye opener, making it easier to understand how much you’re really spending and where you have opportunities to save.

Trick #4: Divert Payments

An important part of building up your savings may include canceling unused memberships or subscriptions, cutting the cable cord or paying off loans like car payments, student debt, etc. But the truth is, if you’re not diverting that now “unclaimed” portion of your paycheck into savings, you’re just as likely to spend it elsewhere. Find out just how much you were previously spending on these payments or subscriptions, and instead set up automatic payments to a savings or retirement account.

Trick #5: Don’t Spend Your Pay Raise

This one can definitely feel hard to do, but it can be another great “out of sight out of mind” trick to use if you’re able to afford it. Say you’re living on what you’re already making, and you get promoted or a two-year time in service increase. Instead of increasing your monthly spending because you can, consider diverting a portion of it into a savings or retirement account. For example, you could incorporate a certain amount, half of the increase, into building up your monthly budget, but automatically roll over the other half into a separate savings account. This allows you to enjoy a modest boost in both your monthly spending and your savings.

Saving money can feel like such an impossible task to do, especially when the temptation to spend has gotten so high. But using these tips and tricks, you and your family can work toward automating your savings, developing healthy money habits and seeing your money grow. 

  1. https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf

If you found this article useful, you might like the following blog posts:

Military Finance 101: 10 Renter's Insurance Questions


Military Finances 101: What is the Time Value of Money (TVM)?


Military Finances 101: Liquidity Risk


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