Often we encounter payments that are either unexpected or are expected, yet temporary. While these may cause an adjustment to your spending, you can use the momentum from the bill paying to put some extra padding into your savings account.
For example, say each winter your heating bill increases by $75 – 100 a month. It’s expected, yet it causes you to adjust your budget and spending to accommodate for the bill. By the time March or April arrives with warmer weather, you might grumble a bit, but you are easily paying the bill.
The money saving tip is to keep making the additional payment, but now make it to yourself. Put the extra $75 – 100 in your savings account. No, you likely will not do this indefinitely, but if you can keep “making the payment” for one or two more months, you will be adding nicely to your savings funds without feeling nearly the budget strain. Perhaps you can do this for the next month or two until the summer air conditioning bills begin to arrive.
This technique works for many different kinds of bills. You can keep making the payments on a loan after it is paid off. You can keep making the co-payment for medical visits after the doctor has given you a clean bill of health. You can keep making the “prescription payment” after you no longer need a long-term prescription. You could keep “paying the car insurance” after you sell the extra car. (Of course, all these payments are going right into your savings account.) The possibilities are endless and it’s your emergency savings fund or your investment portfolio that benefits.
The idea is that you have already mentally adjusted to not having that extra money. You’ve already shown that you have the discipline to make the payment. Use that combination of mental adjustment and discipline and you will have many opportunities to add to your savings account without really missing the money.
Saving money easily – now that’s The Fat Dollar way.