September 26, 2018
Updated 26th September 2018
It can’t be denied that cash is king, and let’s all agree that cash on hand is the fastest way to spend it. But with these few tricks, you can save instead! Follow these 7 cash tips to help you build your stash of dough!
Find out how much you need to spend in a week, calculate your necessary expenses for transport, food, and anything else you might need. Then, at the beginning of every week, withdraw only the amount you NEED for that week. The cash you withdraw should last you throughout the week and you shouldn’t have to visit the ATM again.
Most of us usually make an ATM run when we run out of cash and need more, but that habit can make it harder to keep track of your money. This is why setting a specific day to withdraw cash from the ATM can help you be financially discipline. As you spend your cash in hand, you will have less cash, and that visual of less cash on hand will keep your spending in check. When you have less cash in your wallet, you’ll then adjust your spending accordingly.
“You should take care of small, loose bills as large bills take care of themselves” – Mexican folk saying
According to a study published in the Journal of Consumer Research, shoppers are less likely to spend their money if they are carrying the cash in large denominations. It’s known as the denomination effect, a type of cognitive bias that make people less inclined to spend with larger bills compared to the equivalent value in the form of smaller bills.
In visual terms: Say you have a single RM100 note versus a mix of RM10 and RM20 that add up to RM100. You will be more inclined to spend the RM10 and RM20 bills as you don’t need to break the single RM100 bill. Try carrying around larger denominations, it might help you to slow down your spending next time.
If you are contemplating a large purchase, such as an apartment or a new car, the first step is to save the amount of money you will need to pay for the monthly installment every month in cash. This is to see how it will feel when you have to service the loan.
For example, if getting a car means you will have to pay an installment of RM600 every month, set aside that same amount every month for a period of time. This way, you can truly put into perspective as to how the purchase will affect your finances. It’s a good way to assess if you can maintain your current spending levels or if sacrifices need to be made and you have to cut corners. Plus, this won’t cost you money; it’ll save instead!
Tell that to yourself, not the cashier! At the end of the day, make it a habit to gather all your loose coins and put it into a designated place like a coin jar. You’re bound to get change from your daily spending. For example, after you pay for your RM7 nasi campur with a RM10 note, make a mental note that the RM3 change will go into your coin jar at the end of the day.
Don’t underestimate how much money you can save up this way, especially if you are consistent about it. If you don’t set aside your loose change, it’s highly likely that you will make unnecessary purchases because you want to get rid of the coins anyway.
You may have noticed that you tend to come across RM5 notes much less than the other denominations, like RM1, RM10 and RM20. You can make saving cash fun, almost scavenger-like, by setting aside all the RM5 notes you do come across.
Of course, as RM5 is not exactly a negligible amount as it may limit your spending. If putting aside all RM5 notes is a struggle, you can opt to only set aside the RM5 notes you get as change every other week or when you make certain purchases. This way, you will have some flexibility and won’t need to limit your spending too much.
This is a saving tip that should ideally be done during the first week at the beginning of the year. This is because you can end up with RM1,378 in savings, or even more depending on your creativity! You don’t have to wait until next year, you can start now!
The way it works is by saving RM1 in the first week of the year, then gradually increasing the savings by RM1 every week throughout the year. So, you will need to set aside:
At the last week of the year, you will need to put aside approximately RM52. Don’t limit yourself, however, you can always start with a higher amount too! The more you set aside, the more cash you’ll have at the end of the year!
It may be convenient, but sometimes too much convenience can actually backfire. This is especially true when it comes to storing your payment information at online shops. Anything that creates more friction or obstacles will provide you with time that can make you second guess a purchase.
Reduce impulse purchases by removing the auto-fill forms and saved credit card details on all of your favourite online stores. This way, it makes it less convenient because you will have to manually fill in your payment details. It basically acts as a deterrent.
We carry our smartphones all the time anyway, why not use it to track your spending too? This will make it a very invaluable tool for you! Check out our list of budgeting apps you should use: 5 Budgeting Apps You Can’t Live Without
Having an overview at the end of the week or the month of your finances all laid out on an app is useful, especially if you’re wondering where all your money has disappeared to.
Tags: money matters