Currency exchange is a thrifty tool in my home. To save money, my 11-year-old daughter has swapped five single dollars for a five-dollar-bill and has traded up for even larger denominations. She uses the larger bills to preserve capital.
“When I see smaller bills, I think I have more money to spend,” my daughter said, adding that it’s tempting to buy treats with single dollars. “I’m not going to buy a chocolate bar with a $20 bill.”
It’s a numbers game that we all play with our budgets and wallets. In fact, banks, financial planners and marketing gurus have launched a variety of programs built on different savings techniques. Here are a few of my favorite money-saving tricks.
•Loose change: Bank of America has a “Keep the Change Program,” in which purchases made with a debit card are rounded up to the nearest dollar and the difference is transferred from the customer’s checking account into a savings account. My do-it-yourself version of that program is simple. Just toss your loose change into a jar every day and watch the coins accumulate. It’s a painless way to create additional savings.
•Dollar matching: While saving for a home, my brother created an unusual program. For every dollar he spent, he placed 20 percent of the purchase amount into a savings account. That system helped to create a nest egg for his first home. Other savers recover from frivolous purchases with a dollar-for-dollar transfer into a savings account. This dollar-matching strategy discourages careless expenditures and forces you to cut fat from the budget in order to fund the matching transfer.
•Pause button: Whether shopping for clothes or cars, cooling-off periods can eliminate impulse purchases. Some families hit a 24-hour pause button when considering merchandise over a certain dollar amount. I’ve also met shoppers who use the checkout line to debate the necessity of smaller items in their cart.
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photo credit: Sharon Harvey Rosenberg