Financial Experiment: Finding the Perfect Saving Strategy

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Financial Experiment: Finding the Perfect Saving Strategy

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In this series of Financial Experiments, we've examined our garbage, taken minimalist "vacations", and run "emergency evacuations". In so doing, hopefully you've found new and creative ways to consume less (or differently), and critically evaluate your attachment to stuff (and the associated costs).


Today's experiment isn't about consuming; it's about saving. We'll compare two different saving strategies - you'll try each for one to two months - and you can employ the one that works best for you in the end.

Before You Start

Choose a savings goal (e.g.: saving for something specific), and an amount that you believe you can afford to save each and every month towards that goal.

Also, set up a dedicated savings account for this savings goal. Online savings accounts are good for this.

This doesn't have to be a brand new goal; if you already have a savings plan, you can just tweak it for the duration of this experiment.


Savings Strategy #1: Automate It

For one to two months, set up an automatic savings plan this, the day after payday, transfers the designated amount to your online savings account. It happens automatically and almost invisibly, and you are left with the remainder of your pay to live out the month.

Choose a savings amount that allows you to meet budgetary needs, but without much leeway. (If you run into trouble, you can transfer money back from your savings account to cover expenses).

Savings Strategy #2: Save What is Left Over

Cancel your automatic savings plan above. For one to two months, go about your daily business. Remember your savings goal in everything you do, because at the end of each month, whatever money is left over from your income after expenses goes into your dedicated savings account.

You can commit as much or as little as you wish to this strategy, but the idea is you're motivated enough by your savings goal to save as much as you can. Find a picture that illustrates your goal and save it as your phone wallpaper and/or desktop as a constant reminder and to help you visualize your completed goal.

Ideally, you want to see if you can beat the amount you were saving automatically in Strategy #1, but without unduly affecting your life in ways that aren't sustainable.

Compare the Results

For most people, automatic savings are the easiest - and most effective - ways to achieve savings goals with minimal stress and maximum results.

But you may actually find that if you keep your savings goal top of mind and base all of your financial decisions (including impulse purchases) on the knowledge that spending more money now means extending your goal completion date, you might discover that Savings Strategy #2 is the one for you.

What's Your Preference?

What is the winning savings strategy for you? Let us know in the comments!


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 Nora Dunn, travel and lifestyle expert guest blogger for leading provider of debt relief, CareOne Services, Inc. Nora Dunn

Nora Dunn is The Professional Hobo: a full-time traveler and freelance writer. She is a contributing writer under the CareOne Debt Relief Services A Straight Talk on Debt blog. Having sold her business and belongings to travel, she has been on the road since 2007. She travels in a financially sustainable manner, taking advantage of creative volunteering positions. As a former certified Financial Planner, she is financially responsible for her actions along the way. She believes there is a fine balance between planning for tomorrow, and living for today. Compensated Blogger for CareOne Debt Relief Services.

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  • I'm definitely one for automated savings. I've never been a good saver so for me if I have easy access to the money (i.e. a savings account linked to my checking), I will spend it. But ever since I've automated my savings to an online bank, I've managed to save almost $300 AND gain almost $1.00 in interest from doing it that way, which is  HUGE for me. I'm happy to have found another way to handle my finances.

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