How To Really, Truly Save A Dime

Save Your Savings Discount doesn’t count The beauty of buying a handbag, digital camera or sofa on sale for “50% OFF!” is that you feel, deep in your wallet, that you are saving 50% of the price. But you’re not, notes Peter Tufano, professor of consumer finance at Harvard Business School, who has studied this illusion.

“You aren’t saving money-for a goal or for your future-when you consume more at lower prices.”

Luckily, there’s an easy fix: Learn to save your savings.

Make it real
If you “save”, say, $25 on a new pair of shoes-try to save some or all of that money. (You probably can’t save it all, or you would have bought the darn shoes two months ago, at full price.)

Likewise, whenever you commit some courageous act of frugality-by hosting a potluck, mending your kids’ jeans-don’t pat yourself on the back for being economical.

Translate money-smart moves into tangible rewards, by throwing a few extra bucks into your savings account.

See Also

Financial Tip: Know What You Spend

Bottom line
Saving is a series of habits and reflexes. Strengthen that anterior latissimus savingus allofit muscle right now, even if you saved just $5 by bringing lunch to work today. G’wan, save it. Then…

Your Move
Struggling to save? Revisit the Save-to-Spend Budget and consider a revamp.

Via our beloved money saving sisters at DailyWorth.com; DailyWorth is a free daily personal finance email for women. They deliver practical tips, empowering ideas and the occasional kick in the pants.