When it comes to saving, there are the oldies but goodies: Toss pocket change into a jar. Automate monthly savings. But my neighbor Sasha Fine turned me on to a creative way of socking it away. She and her husband have a rule: No $5 bills in your wallet. You get a fiver in your change, it goes into a giant glass jar on a hallway bookshelf. "It becomes a game," she tells me. Their method works: They save between $3,000 and $4,000 each year — a fund designated for vacations. Here are some more creative ways to lock away funds for rainy days:
Make it fun: Stacey Lewis and her Long Beach, Calif., family have a good time with the "To the Letter" game. Since every dollar bill's front left side is inscribed with a letter of the alphabet, they choose one letter each year. All dollar bills except those depicting the chosen letter must be placed in their "savings bucket," while those with the special letter can be spent. "One year, we saved over $500 and had a wonderful time shopping for school clothes and supplies," she says.
Pay for complaints: The anonymous author of the No Debt MBA blog started a vacation fund to remedy this problem in her life: "My significant other and I constantly complain that we don't have enough time with each other, so we've started a new policy: Every time one of us starts feeling like we don't spend enough quality time together, we put $1 or more into our 'beach fund,' which is allocated for long vacations together on the beach or to downshift work. Putting the savings in that context also makes it untouchable for anything but our goal, since taking money out implies you don't want to spend time together. It also cuts down on complaining."
Stick to your old budget: Boston financial counselor Andi Wrenn advises clients to stick to their current budget, even when they get raises or pay off debt. Any extra money coming in from a raise or freelance work is earmarked for savings, as are funds that had previously gone to car payments or student loans.
Round it up: Angil Tarach-Ritchey of Ann Arbor, Mich., rounds up all purchases made with checks to the next dollar. "If the purchase is for $15.25, deduct $16 from the balance. That change adds up quickly," she says. Others use the tactic for interest on savings and investments. If your statement says your money earned you, say, $286 this month, add from your checking account to make it a smooth $300.
Save your savings: Sock away money you save using discounts and budgeting. Marie-Josee Shaar of Philadelphia paid for her $2,100 wedding dress by allocating funds saved by couponing and skipping pedicures and services she would normally outsource, like ironing her fiances shirts as opposed to sending them to the cleaners. Tiffany Victoria Bradshaw of Los Angeles takes the value of any purchased items she returns to the store and plops it in savings. Robin Wallace, of New York City, uses the savings amount printed on her grocery store receipt as the figure she transfers from her online checking to her savings accounts. "In just over a month, I'm into the triple digits in my new virtual change jar," she says.
Save your money from yourself: The trick to savings is, well, you can't spend it. Sasha and her hubby also stow the day's change in the same jar, and cash it into $100 bills they stash in the apartment for emergencies. "We are less inclined to spend ($100 bills) frivolously," she says.
Pay yourself for drudgery: Frugal living expert Judy Woodward Bates, of Dora, Ala., suggests attaching a payment to tasks you hate. She pays herself for all nonwork-related household tasks, including $50 for cleaning house weekly. These payments go in a travel fund, which this year will pay for a three-week trip to Norway for her and her husband, Larry. Similarly, Bates advocates for saving money you would otherwise spend on bad habits. Example: Save any money you might normally spend on sodas while dining out — an expense she estimates adds up to $800 per year for a family of four.