Employing the "wait one more day" savings plan

[VirginiaBob]

I have used a method to gradually move my family into a frugal lifestyle.  Hoping this method could help others.  Sometimes it is hard to go home one day and say, "We are now going to live a Mustachian lifestyle starting tomorrow.  Turn in your cell phones and credit cards immediately so that I can mircomange your lives.", and it might be better to use a less noticeable gradual approach.

What I do is "wait one more day".  For example, previously I put gas in the car every 7 days.   Next, I changed to every 8 days and let the family adjust to that, and adjusted the amount of driving accordingly, after that 9 days, 10 days, 11 days, and now 12 days.  So instead of needing gasoline 4.3 times a month, now I only need gas 2.5 times a month.  At $0.50/mile (back of the napkin calculation), about $2,100 savings per year.  For groceries, same thing, used to shop every 7 days, and a lot of food went to waste, went to 8 days, 9 days, now we are at 10 days, and adjusted the grocery budget accordingly, a savings of $1,700 per year.   Weekly dinner out with the family?  Change that to 8 days, then up from there.

The idea is to adjust by a day without anyone even realizing it (nobody notices 8 days vs. 7 days), wait a few months and adjust again.  Basically a way to establish an unnoticable habit.  I believe by doing this, anyone can easily cut an additional 10% of thier family budget which can be socked away. 

Anyone do something similar?   Or ways to improve upon this technique?

[golden1]

I did this with my automatic savings plan.  First I deposited $50 a month, then upped it by $25-$50 every few months.  Now I am up to $800 a month. 

[sheepstache]

I definitely do this. It helps with the fact that while some people get joy from new purchases, that pleasure fades as it becomes less new. If you're buying a new gizmo every week, it would be terrible to be told you have to cut down on the new gizmos you can have. But being told to wait 8 days between them isn't so bad and doesn't in any way diminish your excitement. This method addresses the problem that some people seem to have an internal clock about how often they should spend money. Once they buy something, no matter how much they like it, the clock has started ticking on the next purchase. Also, if you get the waiting period up long enough sometimes they realize they don't need it at all or that they'd rather skip it all together and go right to the next purchase.

[skunkfunk]

I tried that with my mortgage, but the bank was not happy after it got to 100 days or so.

/it'sajoke

[MrFancypants]

For a while my problem was untracked spending using credit/debit cards.  I wasn't disciplined enough to keep track of receipts and at the time online banking wasn't really all that sophisticated.  So I couldn't exactly just log into Mint to get an accurate picture of where the money was going.

What worked for me was to take out a cash allowance every month.  I would sit down, pay all of my bills at once, go to an ATM and get my allowance, and then shovel the rest off into savings.

The allowance was meant to cover groceries, gas, entertainment, etc.  If I ever had to use a card for anything, like an online purchase, cash would come out of the wallet and go into a bucket, which would then deposited at the end of the month.

Writing this all out it seems somewhat convoluted, but it worked great for me.  The process gave me an awareness of money flow that I otherwise struggled to develop.

[VirginiaBob]

I tried that with my mortgage, but the bank was not happy after it got to 100 days or so.

/it'sajoke

Lol!  I'd recommend the reverse though with your mortgage, pay a day early, then 2 days, then 3 days, etc.

[retired?]

I tried that with my mortgage, but the bank was not happy after it got to 100 days or so.

/it'sajoke

Lol!  I'd recommend the reverse though with your mortgage, pay a day early, then 2 days, then 3 days, etc.

Beware tho, since the default setting on how to treat early payments vary by lender.  Wells Fargo would credit any <1month early payments as of the next payment date, e.g. paying Mar 30, Mar 20 or even Mar 5th for a payment due Apr 1 would be treated as though it took place on Apr 1.  They will change the setting if you call, but it is not automatically treated on a daily basis.

[Allen]

I think my wife did this to me with sex frequency.

[teen persuasion]

I did this with my automatic savings plan.  First I deposited $50 a month, then upped it by $25-$50 every few months.  Now I am up to $800 a month.

This is how I got DH to increase his 401k contributions.  He started at 5%, I tweaked his withholdings to eliminate unnecessary amounts and convinced him to double it to 10%  with little change in takehome pay.  Paid off the mortgage, had him double it again. I got a part time job, doubled it again.  Once I broke down his initial reluctance to make changes and shrink his takehome check, I kept tweaking it higher until we got to maxing it out at around 52%.  It would be so much easier if I could make the changes myself, instead of having to nudge DH to do it, but I'm working with what I've got - no benefits for me at work.

[Patrick A]

I think my wife did this to me with sex frequency.

Did you notice?  Did it work?

[rjbf65]

For a while my problem was untracked spending using credit/debit cards.  I wasn't disciplined enough to keep track of receipts and at the time online banking wasn't really all that sophisticated.  So I couldn't exactly just log into Mint to get an accurate picture of where the money was going.

What worked for me was to take out a cash allowance every month.  I would sit down, pay all of my bills at once, go to an ATM and get my allowance, and then shovel the rest off into savings.

The allowance was meant to cover groceries, gas, entertainment, etc.  If I ever had to use a card for anything, like an online purchase, cash would come out of the wallet and go into a bucket, which would then deposited at the end of the month.

Writing this all out it seems somewhat convoluted, but it worked great for me.  The process gave me an awareness of money flow that I otherwise struggled to develop.

I really like that idea.  When I was single, I would use the cash money envelope method and I think it did curb my spending some.  Married now, and October was not a good frugality month for us.  The credit cards are awful easy to spend.  I really like the idea of putting the online purchase money in jar so you aren't going over the budget and sticking to the plan. 

[MrFancypants]

For a while my problem was untracked spending using credit/debit cards.  I wasn't disciplined enough to keep track of receipts and at the time online banking wasn't really all that sophisticated.  So I couldn't exactly just log into Mint to get an accurate picture of where the money was going.

What worked for me was to take out a cash allowance every month.  I would sit down, pay all of my bills at once, go to an ATM and get my allowance, and then shovel the rest off into savings.

The allowance was meant to cover groceries, gas, entertainment, etc.  If I ever had to use a card for anything, like an online purchase, cash would come out of the wallet and go into a bucket, which would then deposited at the end of the month.

Writing this all out it seems somewhat convoluted, but it worked great for me.  The process gave me an awareness of money flow that I otherwise struggled to develop.

I really like that idea.  When I was single, I would use the cash money envelope method and I think it did curb my spending some.  Married now, and October was not a good frugality month for us.  The credit cards are awful easy to spend.  I really like the idea of putting the online purchase money in jar so you aren't going over the budget and sticking to the plan.

That system worked great when I was single, but not so well after I got married.  Thankfully my wife and I share similar financial values, so it's pretty easy for us to handle our money and keep on track.

The way we get around the online purchase problem is to only use cards tied to our Mint account.  That way the spending gets applied directly to our overall budget.  We have all the normal stuff on our budget like mortgage, utilities, groceries, etc, but we also use Mint's "Everything Else" budget feature, where we've put a number value on "Everything Else" that catches items we haven't specifically budgeted for.  So that makes it easy to catch any random small expense and wrap it into our overall budget, to include odd online purchases.

Something else we do to help with that is me and the wife each have individual accounts where we transfer a small amount of money that we're allowed to spend on anything either of us wants, no questions asked.  So I find that most of the random small online purchases at Amazon or whatever gets wrapped up in that and isn't really tracked, because we budgeted for that money to basically just disappear every month.

So basically, we've built in a couple of inefficiencies so we don't have to feel like we're sacrificing much even though our savings rate is quite good.

[frompa]

I think my wife did this to me with sex frequency.


This was fucking hilarious.  Heh heh.

[RetiredAt63]

I know we are slowly sliding OT here, but - I treat my CC like a debit card.  I pay it off with online banking every few days.  The heart of the system, though, is that I have two active bank accounts, one is for major bills (Hydro,mortgage, etc.) and one is for daily living, basically food and gas, and it gets a set amount every month (usually I don't spend it all and it just gets topped up).  When I look at the CC charges, any for gas and food get paid from that account, the major ones get paid from the first account.  This way I get my CC rewards but never build up a big balance, my usual balance is zero,and my daily living expenses are closely monitored.

It is the electronic equivalent of the envelopes  ;-)

I really like that idea.  When I was single, I would use the cash money envelope method and I think it did curb my spending some.  Married now, and October was not a good frugality month for us.  The credit cards are awful easy to spend.  I really like the idea of putting the online purchase money in jar so you aren't going over the budget and sticking to the plan.

[rjbf65]

I know we are slowly sliding OT here, but - I treat my CC like a debit card.  I pay it off with online banking every few days.  The heart of the system, though, is that I have two active bank accounts, one is for major bills (Hydro,mortgage, etc.) and one is for daily living, basically food and gas, and it gets a set amount every month (usually I don't spend it all and it just gets topped up).  When I look at the CC charges, any for gas and food get paid from that account, the major ones get paid from the first account.  This way I get my CC rewards but never build up a big balance, my usual balance is zero,and my daily living expenses are closely monitored.

It is the electronic equivalent of the envelopes  ;-)

I really like that idea.  When I was single, I would use the cash money envelope method and I think it did curb my spending some.  Married now, and October was not a good frugality month for us.  The credit cards are awful easy to spend.  I really like the idea of putting the online purchase money in jar so you aren't going over the budget and sticking to the plan.

I'm actually similar in the way I handle my credit card.  Get's paid off after every use.  Morning routine is to log in to my online banking and then pay off the card to zero.  Use mint to categorize it all.  Make a budget but the wife isn't too interested in looking at it.  However, she isn't too spendy.  I have things I could improve on as well so I'm in no position to complain.

[firedup]

I tried that with my mortgage, but the bank was not happy after it got to 100 days or so.

/it'sajoke

ROFLOL

[MikeBear]

My wife had access to a 401k plan at work and never told me for 10 years. Who would have thought a grocery store has a 401k plan for their cashiers? They even have 6% matching. She doesn't make much money because they screw their workers by refusing to schedule them more than 30 hours a week. I immediately set it up for her, and set it for 10% withholding under her protesting "that's too high". I have upped it 1% every month now for 7 months, so it's at 17%. She still thinks it's 10%, so doesn't complain about the loss of immediate money in her check.

She'll thank me one day.

[sheepstache]

This reminds me of something my parents did when I wanted something as a kid. If I wanted something in the store, assuming it was a reasonable, affordable thing, my parents would say that I could think about it and if I really still wanted it tomorrow, we could come back and get it. Little kids tend to want stuff on impulse and need it right at that moment. This approach has several benefits. It cuts off the whining/wheedling routine because you haven't said 'no.' Sometimes you end up not having to buy the thing at all because they forget about it. And it instills a habit of being thoughtful about purchases, deciding whether they want something rather than focusing on whether you can get it.

Of course, you have to stick to your word if they want it. Otherwise they decide the whining, screaming "I have to wear them down and get it right now" is the only way to get things.

I think my wife did this to me with sex frequency.

Did you notice?  Did it work?

Ha!