Sure, technology can be super helpful when it comes to saving money — everything from apps that assist with budgeting to online shopping tools that find you the best deals.
However, sometimes the best way is simply the old-fashioned way. You’ll be happy to know that many old-school money-saving tips are still effective in today's technology-driven world, according to financial experts.
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Let’s take a look at six old-fashioned tips that can still help you save big bucks today.
The Envelope Budgeting System
The premise of this classic money-saving method is simple — after you pay your bills and set aside money for savings and any investments, divide the rest into spending categories such as groceries, eating out, clothing, and entertainment. Get an envelope for each category, write the name on it, then stick inside the amount of cash you want to spend in that area. You can do this for each week or for the entire month.
Once the cash runs out, you can't spend any more money in that particular category. This method forces you to be diligent about pulling cash out and separating it into the right envelopes. The categories that work best are groceries, shopping, and if you're a couple, fun money/allowances for each of you.
Consider Going Cash-Only
Cash is king, which is why some people make a cash withdrawal of a portion of their paycheck to use for personal spending. That way, when the money's all gone, you know you've used up all your fun (non-essential) spending money. Sticking to cash can truly limit impulse spending."
Freeze Your Credit Card
Yes, literally freeze it. Many experts recommend this tip for helping you stop spending money you don't have.
You can freeze half a bowl of water, add the credit card to the bowl then top off the water and freeze. Thus, the card is suspended in the ice, which gives you plenty of time to think before making a big purchase.
Balance Your Checkbook
With online banking, this practice may seem outdated, but it can actually make a significant difference. Erik Gordon, CEO of ErGo Ventures LLC, a private equity and venture capital investment company, advocates for balancing your checkbook on a monthly basis.
Learning how to balance your checkbook is important so that you understand how it works. Unfortunately, many people incur overdrafts after writing checks because they simply don’t understand that the money could still be in their account for days and they end up spending it.
Balancing your checkbook can also help you check for any errors or fraud. You'll also have a better idea of where your money goes.
Separate Your Bank Accounts
Generally speaking, it can be helpful to have a minimum of three separate bank accounts for various types of expenses.
You can have one for fixed monthly expenses, one for annual expenses, and one solely for emergencies. The nice thing about this system is that it gives you a chance to work out how much of your paycheck is already committed before the non-monthly expenses happen. Most online banks and some brick-and-mortar banks will let you open multiple savings account without an additional fee.