Budgeting is too often misunderstood. The problem: Many people look over their expenses after the money is gone. Then they get startled or—even less productively—embarrassed at how much money was spent on things like eating out or buying new clothing, and vow to cut back next month. It's an endless cycle that does little to change your spending habits.
Real budgeting, and the agency it gives you to do what you want to do with your money (no matter how much of it you have or don't have), involves looking forward and deliberately allocating specific amounts of money for a particular purpose.
In this last month before the holidays—when we enter the reckless, blind territory of spending with abandon—there's a painless way to sock away an extra $100 that you can earmark for gifts or travel or anything else. It's a perfect example of accumulating cash simply by purposefully deciding where it will go, in this case with the guidance of a simple checklist outlining a method developed by Rutgers professor Dr. Barbara O'Neill.
Download the PDF:
30-Day $100 Savings Challenge
Why the 30-Day Savings Challenge Works:
By "spending" no more than a few dollars on savings each day in November, you'll have a sizable chunk of change at the end of the month.
"Savings challenges provide structure and a target goal," Dr. O'Neill told Apartment Therapy. And in the case of this plan specifically, you don't have to sacrifice flexibility to hit your money mark. "For example, some people prefer making the larger deposits first in the 30-Day $100 Savings Challenge because they have more money at the beginning of a month than at the end."
How to Use this Money Saving Checklist:
Print off the checklist (you can download it in a PDF version) and stick it to the fridge or tuck it into your daily planner.
The plan works like this: Start off by saving just a dollar every day for five days. For the next five, save two dollars. Increase the amount every five days by a dollar until you reach the point where you're saving five dollars per day, which you'll do for the last ten days of the month.
Although, like Dr. O'Neill said, you can remix the checklist as you see fit. If you have a particularly frugal day (or find $5 in a coat pocket), you can put $5 away on the second day of the month, or the 10th day of the month—just check off one of the "put away $5" boxes near at the end of the checklist instead.
What to Do With Your Savings:
If you use cash to pay for things, setting aside these few dollars per day is a straightforward matter of putting the cash in a designated spot at home. Something as simple as a jar will do just fine.
Alternately, you can make a transfer between your checking and savings accounts online. Just make sure you aren't going over any transfer limits.
In contrast to watching your money get away from you, this kind of budgeting involves telling your money where to go. And it's revolutionary. The extra hundred you'll have at the end of the month will feel like it came from nowhere.
What will you do with it?
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