Hiding Money From Yourself

One thing that I've learned during my journey to debt freedom is that it's very hard not to spend money that you know you have. On the flip side, if you're not aware you have extra money to spend, you can't spend it. I've thought of 3 things that you can do very easily to hide money from yourself. Because we all know that the hardest person to control during the debt free journey is....yourself.

1. Directly deposit money from your paycheck into a savings account that you don't use for regular spending. First off, I strongly urge you to get direct deposit for all of your paychecks (hopefully your employer has this option). This takes "you" out of the paycheck handling process. I've found that once you have money in your hands, it's exponentially harder to not spend it. So, don't even handle your paychecks. Then you'll know for sure that you won't be tempted to cash it or deposit most of it with a little withdrawal for yourself. Nope, if it's directly deposited into your checking account, it made it there safely without your grubby little hands on it. Once you do that, a second step would be to setup an immediate automatic transfer of a portion of the paycheck into a separate account which you don't access regularly. Some employers even have the option to direct deposit different percentages of your paycheck into multiple accounts. Either way, at the end of the day, the funds you see in your checking account should be less than what your total paycheck is worth. Start small just so you get used to it, maybe 2% of your paycheck. Then, once you learn to live with the smaller amount of money, increase the percentage that you stash away. You'll soon realize two things: 1) you will prove to yourself that you don't "need" all that money to live, and 2) you will start building up a nice little slush fund that you can use for rewarding yourself when you reach a milestone or use that savings for a specific event (maybe a mini-vacation).


2. Reduce your budget amount. When I started truly using a budget, the budget amount was pretty big. I did that on purpose because I knew I would be more likely to continue using budgets if I succeeded to stay on budget a few times. But one thing I noticed is that more times than not, I ended up using ALL of my budget...down to the last penny. Maybe you have more self control than me, but I've found that if I decide to give myself $500...I'll find a way to spend $500. So, as my debt journey matured, I started decreasing the amount of money I paid myself for "spending". And, imagine that, I found out how to spend every single penny of the new amount. But the beautiful thing was that I was conditioned to stay on budget. And now that my new budget was $100 less, that was $100 more I could pay towards getting rid of debt. Now, there's a risk of going too low with your budget and potentially getting into scenarios where you go over budget. So, reduce it little by little and really keep track to make sure you don't start going over budget. Because although this is a nice trick to increase the amount of money you use to pay down your debt, it's not worth risking the behaviour associated with consistently going over budget. Find that sweet spot and use that for your ongoing budget amount!


3. Dump all your change into a jar that sits in your closet. When I first starting doing this, I thought it was a little childish. I mean, come on, what am I like 7 years old? But this actually turns out to be a nice little bonus when you least expect it. To really make this a daily deposit, remember to always use cash. You should use cash for many reasons that I've listed in a previous post, but it's specifically relevant in this context because you don't get change back if you don't pay with cash. Anyway, continue to just dump your change everyday into this jar and then immediately forget it's there. If it's in a closet or cabinet it shouldn't be in your face....hopefully the "out of sight, out of mind" theory works for you on this. And then periodically cash out the change for some extra spending money. I let it build up for about a year and just cashed out almost $300. I know in the grand scheme of things that's not that much money, but it was $300 I didn't have the day before. Besides, this should be used as an extra fun bonus. Maybe you get the kids to help you roll up the coins and they get to buy something special for themselves. Maybe you use it for a nice dinner out for the family. Or maybe best yet, you are hardcore and use that to pay down your debt even more!

These tricks are great tools to use during the journey. Not only do they maximize the money you utilize for paying down your debt, but they also act as nice little bonuses along the way. They're like nice little hidden treasures that motivate you to keep pushing through the journey!