23 October 2013

The Swear Savings Jar System



This is an article from the July 2013 Cheapskates Journal that I thought I'd share with you. I've been reading a lot about the downside of saving coins this week, so I thought I'd share a "positive" with you.

Cheapskates Club members can login to read the entire Journal, and any back issues.

The Swear Savings Jar System


It's the start of a new financial year so I thought it time to come up with a fun, simple and effective way to save.

There's no need to completely adjust your lifestyle in order to save for either a short or long-term savings goal. You can slowly, but steadily add to your savings by using the swear saving jar system to add to your savings each and every day of the week.

Remember the "swear jar"? You may have had one at home or at the office. It was the jar you dropped your fine into if you swore or cursed.

Well the savings jar is a modified version of the swear jar.

Instead of dropping money into the jar each time you curse, you drop money into the jar each time you mention (or have recurring thoughts of) your savings goal. As long as your savings goal is important to you, you're going to express quite a bit of verbal lust, and then enjoy the game as you focus on your savings!

If your goal is less than $500, you may be able to use an average sized jar or cereal canister. However, for a more sizeable goal, many people prefer to use an oversized flowerpot or a large tin can (a recycled 500g or even 1 kilo coffee tin is good) to stash their savings.

How to Implement the System

First and foremost, it's important to understand that simply dropping coins into a jar will take you ages to achieve your savings goals. You may want to up the ante and start placing notes into your jar.

Generally, $5 notes are small enough that you may be able to comfortably drop one into the jar once or more each day without feeling a financial pinch. But if finances are tough, you can start by placing $1 into your jar each time you mention your goal.

Three simple rules will see your savings jar grow each day:

1. Choose your denomination. Choose your denomination between $1, $2, $5, $10, $20, $50 and $100 and stick to it.

    • If you need to drop $10 into your jar and only find that you have smaller notes or coins, place as many notes and coins as necessary into the jar until you reach $10. It is okay to place different notes into the jar as long as you're putting in the amount you planned.

2. Set a minimum. If your goal is something you wouldn't talk about on a daily basis (such as a new verandah), set a minimum deposit for each day.

    • For example, if your denomination is $20, vow to drop a minimum of $20 into your jar at the end of each day, regardless of whether or not you mention your goal. At the end of just the first month, you'll have saved a minimum of $600 into your jar. Emptying the coins from your purse or wallet each evening will help you reach your daily limit quickly.

3. No cheating. Make it a strict rule that you must make a deposit into your jar each time you mention your goal. If you let yourself off the hook once, you're more likely to do it next time and thereafter.

    • If you routinely talk about your goal throughout the day and feel that a $5 or $10 donation to the jar is a bit steep, it's best to stick with a $1 denomination. If you talk about your goal five times per day, you'll still have $5 at the end of the day and up to $150 at the end of the month.

The saving jar system works because it's user friendly and risk free. Yes, you may be placing a considerable amount of money into the jar, but it will motivate you to ramp up your efforts as you see your savings mounting every single day.

Unlike financing the purchase you're saving for, if for any reason you were to encounter a financial emergency you'll be able to dig into your savings jar and continue your efforts once you're on a positive financial footing.

And best of all, again unlike financing the purchase, you'll actually own it when you get it!

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