Trying to Save Money? Use This Money Hack

We've all been there; you want to be more mindful about your spending, so you decide to give yourself a set "allowance," and that's all the money you're allowed to spend on purchases other than necessities. Except you haven't made any moves to follow through with this idea, and despite giving yourself a weekly cap, you routinely go over your set amount -- and wind up feeling guilty about it!

Well, you can stop doing that. For one thing, you shouldn't ever feel bad about spending money. And for another, there's a technique you can try to ensure you're only spending the money you've budgeted for, and no more. Here's how.

Lean on cash

This is a very simple technique. Let's say you decide that your spending limit is $100 per week. Rather than relying on your math skills as you make purchases using your debit or credit card, hit up an ATM and withdraw $100 in cash at the beginning of the week. That's it -- that's your spending money. Once it's gone, it's gone, and you'll have to wait until the next week to make fun purchases.

If you want to make a larger purchase, you can save up part or all of your budgeted cash until you have enough to make the purchase. Think of this trick as giving yourself an allowance, as you might've gotten from your parents when you were a kid. And put your credit cards and debit card in a safe place to avoid the temptation to spend beyond your allotment (or withdraw more cash).

Cash is soooo 20th century, though

While cash is great for some situations, and it's a good idea to have at least a little on hand, I recognize its limitations. If you're a fan of online shopping (like I am), spending only cash is definitely going to present some problems. Thankfully, there's a workaround. Rather than turning your spending money into cash, you can opt for a gift card instead.

If Amazon is your weakness, it's very easy to buy an online gift card and apply it to your account. If you prefer to shop around, how about a Visa prepaid card instead? These come with a 16-digit card number, an expiration date, and a security code, so you can use them for online shopping like you would a credit or debit card.

Try these tips to make saving easier

It's not enough to just limit your spending if you're hoping to save more money toward specific goals. Once you've put the above technique into practice, give these ideas a try to ensure more success with saving.

Open the right savings account

There's never been a better time to get a high-yield savings account. As of this writing, the average APY on a savings account is just 0.45% -- but you can find high-yield savings accounts with online banks offering APYs 10 times that, or even higher.

Speaking from experience, the thought that your money can grow just from sitting in an account is very exciting -- I have a recurring calendar entry for when my savings account pays me interest every month, so I can log into the account and see how much I made.

Outline goals for yourself

It's much easier for me to prioritize saving money when I have a goal in mind for it. For example, right now I'm saving to buy a home next year. I know how much to set aside from every paycheck to make this dream a reality.

If you struggle to put your money to work, you might also struggle to save it at all. So think about what you want to happen in the future. Want to take a dream vacation? Have a comfortable retirement? Or even put together a down payment for a new car? Visualize it, and you'll be more likely to follow through.

Automate it

This is the tip I give to others but don't actually follow myself. But that's the nice thing about personal finance -- it's personal. Automating savings contributions is a great way to take the decision out of saving. If you have a transfer set up to send money from your checking account to your savings every time you get paid, you won't have time to accidentally spend what you wanted to save, and you won't even have to remember to make the transfer yourself.

We'd all like to save more money, and if you struggle with overspending, it could be worth trying to give yourself an allowance in the form of cash (or prepaid card). While you're at it, make sure you've got a great high-yield savings account at a reputable bank, so the money you're putting aside has a chance to grow.