Delayed Spending: Savings in Disguise

October 25, 2012
Andia Dinesen, AFC ®

Why do you save money?  Does the image of stacks of money in a bank vault excite you?  For most, this probably isn’t true.

Saving is delayed spending.  Unless you are Ebenezer Scrooge (and you can see how well that worked out for him), you are planning to spend the money you are stashing.

Here are some tips for making that delayed spending, disguised as saving, more appealing.

Print out a picture of what you are saving for and pin it up somewhere you can see it every day.  On your mirror in the bathroom, your computer screen, your Facebook page, on Pinterest. 

Use SMART goals.
Help yourself save more effectively by using these tips when setting your goal.
·    Specific
·    Measureable
·    Active
·    Realistic
·    Timed

An example: Visualize and SMART goals.
Paige prints out a picture of a new couch and puts it on her dashboard in her car.  Paige is also quite active on Facebook, so she puts the picture her wall to share her goal setting abilities with her virtual friends.  Paige then uses the (specific) price of the $500 couch.  She decides to set up a transfer from her checking into savings automatically (active) on the 1st and 15th (measurable) of each of the next 5 pay periods (timed).  Paige has decided that she will have to cut back a little on her spending to reach this goal (realistic), but she has decided that it is worth the cutting back to have her new couch in just 2 ½ months.

Now, that doesn’t sound too difficult.  But we all know things (life) can get in the way.  Sometimes it is good to think about some of the negative effects from impulse spending to help keep your goal on track. 

Impulse Spending: The Negative Impact
Paige decided instead to buy the couch on the furniture store credit line so she could go home with the couch that day, she just couldn’t wait.  Paige knew she would incur some other costs, but the finance charges of 25% didn’t seem so bad, it was only a $500 couch after all, and she had a year  to pay for it.  There was also a fee of $2 per month for the 12 months; still a seemingly reasonable  fee..  But then she missed a payment. The late fee was $35 which was added  to the total financed price.  Paige started to realize that the $500 couch ended up costing much more.

Not only did the couch end up costing more, but if Paige doesn’t get back on track with the payments, then she could quickly see some negative impacts on her credit score.

Know Your Score: Save Money

Thinking about the positive effects of setting a SMART goal and the negative effects of impulse spending may help you reach your goal in a timely manner without costing you more money.

How have you used these tips in your life?  Share with us at This email address is being protected from spambots. You need JavaScript enabled to view it. or on our Facebook page at  We would love to share your tips with others!

For more information:
Delaying Gratification
Find Your Balance
The Basics of Saving

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