Hide money -- from yourself
Got the broke-before-payday blues? This frugal hack can help.
Checking account all but empty a day or two before payday? What a coincidence: Your fridge and your gas tank are empty, too.
Once again you raid the coin jar for enough specie to buy a gallon of gas to get to work, plus some breakfast milk and a loaf of bread for sandwiches.
Want to stop living like this? As soon as your paycheck clears, try this frugal hack:
Buy yourself a couple of $25 gift cards to your favorite supermarket and gas station. Put them somewhere safe -- in other words, not in your wallet. Any day-before-payday shortfalls are now covered.
And after that? Head over to MSN Money’s "Saving & Budgeting" page, where you can pick up useful tips on handling your cash. A lot of folks swear by electronic tracking through sites like Bundle or Mint.com, too, or budget-management software like Quicken. (Post continues after video.)
Untilyou've got your money organized the way you want it, keep doing the gift-card buys. The coin jar will thank you.Even after your budget is up and running, why not tuck away a couple of extra gas cards? They'll help fuel a guilt-free summer road trip.
Speaking of gift cards: Check your dresser, desk and file cabinet for cards you forgot you had. According to The Wall Street Journal, an estimated $41 billion worth of gift cards went unspent between 2005 and 2011.
How could this happen? Three reasons:
- Plastic amnesia. Quick! Name every gift card you got this Christmas and identify its location (if you haven't spent it yet). See what I mean?
- Budget shortfall. That $25 to a specialty shop isn't enough to cover a single purchase, and you can't afford to make up the difference.
- Irreconciliable differences. Grandma meant well when she bought you a steakhouse card -- she just forgot that you're a vegetarian.
And if you do excavate unwanted plastic from your sock drawer? Sell it on the secondary market. (I did this myself, shortly after Christmas.)
The best place to start is the aggregator site Gift Card Granny, which will show you where to get top dollar for that useless-to-you scrip.
Don't spend the cash, though. Let it be the seed money for an emergency fund. After all, the day may come when your car won't start for a reason other than an empty tank.
More on MSN Money:
Mister Manners had this to say:
Horrible, absolutely horrible advice. Let's see: take your money out of the bank and convert it into a form that is subject to theft, destruction, expiration, and fees? And will earn you exactly 0% interest?
So, Freedman is talking about people who run out of money before the month is over--are you drawing the conclusion from this that they would otherwise earn interest? Interest on what--the empty bank account? Further, dollar bills are subject to theft and destruction.
The issue of expiration was covered in this article--one needs to keep track of the cards to make sure they are used before they expire. With both groceries and gas, one is sure to need them--if a card should last long enough to nearly expire, it is still sure to be useful. There is rarely a "fee" with groceries or gas, though of course, one would want to make sure of this.
My advice would be to imitate the old credit card trick--take a couple of $20 bills, put them in a freezer bag, and then freeze them in some water, leaving them in the freezer. If one really, really needs that money, one will thaw it--but it won't be burning a hole in anyone's pocket. This would avoid the problems with expiration and fees (for the most part--cash money is sometimes something that elicits fees), and probably loss and theft also.
For very scatterbrained people who cannot keep track of their funds--this is a good first step. Having conquered the "set aside $40 for the end of the month" trick--perhaps they can then move on to others. It takes time and baby steps to learn budgeting--this is a nice beginning.
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WHAT IS FRUGAL NATION?
Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.
ABOUT DONNA FREEDMAN
Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.
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