Save money using the “day before pay day” challenge!
“Get excited and enthusiastic about your own dream!” ~ Denis Waitley
I’m passionate about getting people excited about their money. When I say this at networking events it usually results in a few raised eyebrows because people aren’t used to hearing the words “money” and “excited” in the same sentence. I’ve written in earlier posts about how our negative beliefs and perceptions about money and wealth can hold us back from achieving financial success and if you follow that logic through then seeing money and wealth as exciting and empowering must also be key in helping us reach our full financial potential. I’ve tried a variety of strategies to help myself get excited about how to save money and one of my current favourites is the “Day Before Pay Day” challenge.
“Day before payday” challenge
In the past, I’ve found that I tend to spend more on payday than I do on other days. I think that this is partly because my bank balance makes me feel as though treating myself to a latte or a new item of clothing isn’t really a splurge because there’s still plenty of money left and partly because I tend to rein in my spending in the week before payday to make sure that my money lasts the whole month. Not having had a “treat” in a few days makes it easy for me to justify extra spending once my paycheque is in my bank account. Now that’s not to say that treats are bad, it’s important to allocate a percentage of your income as “fun money” and to spend it on treats without feeling guilty, but it’s also important to make sure that your fun doesn’t start undermining your savings goals. That’s why I started the challenge.
Related article: A disciplined spending plan
The basic idea behind the “Day Before Pay Day” challenge is simple: Try to save as much money as possible in your bank account on the day before payday and then take a percentage (5 or 10% works well) and treat yourself to something special. (Note: You still have to make all your regular payments and you can’t ‘cheat’ by waiting until payday to pick up groceries or get gas if you would usually do that in the week before!) The more you manage not to spend, the more you can splurge.
The impact of this is threefold: One. It increases the amount of money you can commit to savings goals or eliminating debt. Two, it encourages you to get really creative in finding ways to spend less money. For example, I’ve found that I tend to cook at home more and find it easier to resist the temptation to grab something at the drive-thru when I’m working late. One client cut back her morning coffee to two days a week instead of five and stopped spontaneously adding a bagel or muffin to her order. Another friend drops all her loose change into a jar at the end of the day (including loonies and toonies) and then banks it once a month; she usually manages to collect at least $60. Thirdly, not only do you gain better control of your spending (and get excited about your money!) but treating yourself to something special on the day before payday means that you tend not to have the drive to splurge on payday.
Related article: What’s your latte factor?
It’s a simple concept but it has worked really well for me over the past few months. It’s also been a positive experience for a number of clients and friends so why not try it yourself this month and see if it works for you too? If you have fun strategies of your own that you use to help you save money, I’d love to hear them!